Rationalization Model for Market Economy Improvement in Indonesia

Abstract

The market economy works on the basis of the price mechanism, the balance point between the demand and the supply curve named equilibrium, any changes of demand and supply sides will automatically be corrected itself. Some of the key issues in economic improvement are: what and how much to produce, how the organization produces and the total output generated. The graph analyses study is made to analyses how to improve market economy in Indonesia. By developing the theory of Zairi, this article proposes effective bureaucracy support model, integrated economic model, and market economy improvement model. With effective bureaucracy support model, to eliminate deadweight loss which is not enjoyed by government, consumers, and producers, this study suggest that government should: 1) imposed tax on the basis of profit or income generated (direct taxes) and not on the commodity of goods traded (indirect taxes); 2) not enacts ceiling prices for goods and services. With integrated economic model, government should support international trading to enlarge economy size and to increase gross national product (GNP). With market economy improvement model, government should improve technology to used natural resources which can use resources efficiently and effectively.