Private Market Economy Research Articles

Topicality of K. Marx Economic Doctrine in Today’s Conditions Illustrated by Collective Management Functioning

The article analyzes the role of collective management enterprises as an example of practical application of Marxist economic theory in today’s market economy. The goal of the research is to search for suggestions appropriate for solving the problem of fair distribution of labour product illustrated by functioning of enterprises with collective forms of property in present day economy. This problem was elaborated in works by theoreticians of Marxist and neo-Marxist economic schools and in current conditions of private market economy. A positive aspect of the Marxist theory was identified in the sphere of fair distribution of labour product and aspiration for production democracy. Topicality of these problems in current social and economic conditions was demonstrated. Arising of the concept of public enterprises and its realization within the frames of different economic models was analyzed illustrated by such countries as the US, Great Britain, Italy and some others. Economic results of such enterprises were studied and their higher economic efficiency in comparison with enterprises of other forms of property was shown. The demand for justice in social and economic sphere of production in market economy was highlighted. Special attention was paid to the role of enterprises with collective forms of management in economic systems of Russia and China, the efficiency of collective enterprises was analyzed and legal aspects of their functioning were studied. As a result of the research certain drawbacks in collective enterprise work were revealed, for instance, undeveloped interaction with the banking environment, insufficient legal base of their functioning and poor information of the population. The article proved the importance of enterprises with collective form of management as a factor of labour productivity rising and underlined significance of the social aspect of their work. Topicality of the issue of social justice in labour product distribution was shown in the context of positive heritage of the Marxist theory. On the basis of the research key practical suggestions aimed at developing the system of enterprises with collective form of property were formulated.

Gendering Macroeconomic Analysis and Development Policy: A Theoretical Model

The aim of this study is to develop a feminist Post-Keynesian/Post-Kaleckian model to theoretically analyze the effects of labor market and fiscal policies on growth and employment. The study develops a three-sector gendered macroeconomic model with physical and social sectors (health, social care, education, childcare) in the public and private market economy, and an unpaid reproductive sector providing domestic care. It provides a theoretical analysis of the effects on GDP, productivity, and employment of men and women in both the short and long run, as a consequence of (1) fiscal policies, in particular public spending on social infrastructure, and (2) decreasing gender wage gaps, particularly within the social sector dominated by women. This theoretical analysis provides a basis to further analyze the impacts of an upward convergence in wages, other types of fiscal spending, and taxes. HIGHLIGHTS The study develops a feminist Post-Keynesian model to aid policy analysis and gender-responsive budgeting. Public social expenditure decreases gender inequality by reducing women’s unpaid work burden. Social spending creates more employment for women than physical infrastructure and closes gender gaps in employment. Social spending can increase productivity, partially moderating the employment impact of spending. If the economy is wage-led, more progressive taxes increase output.

On possible transformation of everyday life in North Korea via referencing other East Asian socialist nations in transition

ABSTRACT Without direct fieldwork access, one can nevertheless imagine what possible changes can happen in the everyday life of North Koreans, by references with conditions elsewhere in East Asia which resonates with current conditions in North Korea. First, the division between North and South Korea can be referenced with the other instances of nations divided by a communist and a capitalist regime; namely, the present China and Taiwan and the previous North and South Vietnam. In contrast to these references to possible routes to reunification, it also can be referenced to instances of peaceful separations, such as the case of Malaysia and Singapore. Second, now that a nascent private market economy has been introduced, the experiences of Vietnam and China in marketizing their respective centrally planned economy can serve as references to imagine the possible economic transformation of North Korea. Third, the penetration of imported media/popular cultures into North Korean media consumption may stimulate new aspirations of local population for a different material future, as it has done in other parts of East Asia. Drawing on the experiences of other East Asian nations as reference points, potential and possible changes in the everyday life in North Korea can be imagined.

Features of the Formation of the Soviet Credit System in Irkutsk Province During the Period of New Economic Policy

The article examines the formation of the Soviet credit system in the territory of the Irkutsk province in the early years of the New Economic Policy. The study focuses on the nationalization of the financial sector, primarily the financial management bodies and private banks. We examine the creation of the financial system of a new government, as well as complex issues of interaction between the region and the central bodies of Siberia and Russia. The opening of the Irkutsk branch of the State Bank of the RSFSR played a major role in the economic recovery of the region. We examined new documents on its interaction with private and joint-stock financial institutions. We studied for the first time the attempt of the Far Eastern Joint-Stock Bank to be included into the credit system of the region. The article provides information about the history of the creation of Dalbank and its operations in the Far East and China. In the late 1920s, at the time of transition to building socialism, there was gradual shutting down of private enterprise and market economy. Under these conditions, the idea of a “united bank” as the leading body for the implementation of credit policy in the country was introduced. The beginning of the reorganization of the Soviet credit system was the Resolution of the CEC and the Council of People’s Commissars of the USSR of June 15, 1927 “On the principles of building a credit system”, which led to the monopoly of the State Bank in the management of all credit institutions in the country.

Chinese engagement in Africa and Latin America: does it matter for state capacity?

ABSTRACTChina is now a major actor in global development and wields considerable influence in large parts of the world. The success of the Chinese development model has not only challenged the notion that democracy is necessary for development but also questioned the hegemony of the neo-liberal state encouraging and laying the foundations for a thriving private market economy. The Chinese model of aid, loans, and investments highlights the principles of ‘win-win’, ‘mutual respect’, and ‘non-interference’, based on the needs of a country as articulated by the recipient government. Yet, although Chinese aid does not explicitly aim to affect domestic policies and institutions in recipient countries, it does affect them. In this article, we explore the impact of Chinese aid practices – including grants, loans, and investment policies – on state legitimacy and the capacity of state institutions in sub-Saharan Africa and Latin America. We argue that while Chinese development interventions have highly diverse impacts in various geographical contexts, they tend to strengthen the elites that are in power – whether in government, or those supporting it from the outside. The extent to which Chinese policies contribute to strengthening state capacity depends on the incentives and visions that local elites possess.

Economic Freedom and Economic Growth in South Africa

The economic growth and economic freedom nexus is studied in this article and applied to South Africa in an empirical study. Economic freedom is founded on the free or private market economy, based on competition, where voluntary exchange occurs and a legislative framework ensures the safety of market agents and private property. As part of the literature study, the Index of Economic Freedom, the Economic Freedom of the World Index and the Freedom in the World Index were studied and applied to South Africa. An empirical analysis was conducted, cross-correlation functions were estimated, and Granger causality functions, regression analysis and finally a vector auto-regression model (VAR) were constructed and estimated. The research findings from South Africa support the literature, suggesting that there are indeed some indications that greater levels of economic freedom support higher rates of economic growth in a country.

Do Coalition Governments Bring Economic Stability?1

Coalition Politics and Economic Development: Credibility and the Strength of Weak Governments. By Irfan Nooruddin. New York: Cambridge University Press, 2011. 266 pp., $93.00 hardcover (ISBN-13: 978-0-521-19140-1). In Coalition Politics and Economic Development, Irfan Nooruddin speaks to the seminal puzzle that Barry Weingast posed: “The fundamental political dilemma forces us to ask what form of political system is required so that a viable, private market economy is a stable policy choice of that political system” (Weingast 1995, p. 2, emphasis mine). In the Weingast thesis, “market preserving federalism,” an apparently depoliticized form of government, was proposed as a solution to the credible commitment dilemma. Nooruddin roots for “more democracy” instead and argues that “countries in which policymaking authority is diffused across political institutions controlled by actors responsive to different societal constituencies are better able to make credible commitments to long-term policy stability” (p. 3). The causal mechanism works as follows: minority or coalition governments entail diffusion of policymaking authority among multiple parties representing “diverse societal preferences” (p. 4), which, in turn, prevents governments from making arbitrary policy choices, bolsters investor confidence, ensures longevity of investments, and attenuates growth rate volatility (p. 55). The evidence and analyses that the author presents build upon a number of empirical innovations. For instance, growth rate volatility is usually calculated as the standard deviation of economic growth in a given period of time. Considering this unsatisfactory, Nooruddin devises a new measure (using the residuals from the autoregressive process of growth in GDP per capita ), which accounts for baseline economic growth, temporal differences in average economic growth, and for the nature and extent of fluctuations over time. Moreover, the author measures growth rate volatility in three different time panels—the entire period (1964–2000) for which data are available, in increments of 10 years over the same period, and in increments of 5 years over the same period. Each of the explanatory variables is also measured in corresponding time panels. Based on the political …

Reform and competitive selection in China: An analysis of firm exits

This paper considers aspects of the competitive selection process in China – firm entry, survival, and exit – in an important sector of manufacturing, looking in particular for changes resulting from the process of reform. Using industry census data from a province in North-East China, we find substantial differences in the process between ownership types. By conducting decompositions of aggregate growth and exploring the determinants of firm's exit using a hazard rate model, we observe a substantial rate of churning of enterprises in the sector, finding that the competitive selection processes operate, for small and collectively owned enterprises (COEs), in a manner consistent with what is known about a private market economy. While the hazard for state owned enterprises (SOEs) is lower than for COEs, we find that the reforms introduced in 1992 were important in closing the gap for similarly situated firms.

Rethinking path dependence in public policy research

Path dependence arguments are highly relevant for analysing and explaining the resilience and persistence of public policies in the face of intentional reform. However, path dependence arguments were originally developed in order to explain the predominance of suboptimal solutions in the private market economy. Furthermore, there are several unresolved problems when applying path dependence arguments in the study of politics. Therefore, this article aims to rethink the path dependence arguments in order to customize them to the study of public policy reforms. This is done by revisiting the classical argument about self-reinforcing technological paths advanced by P.A. David and W.B. Arthur. After a critical review of the rationalistic critique of the classical argument and a reiteration of the call for a renewed focus on path dependence in political science, the article identifies a series of analytical challenges to the classical path dependence argument that must be addressed in order to make it relevant to public policy studies. The article concludes with a preliminary sketch of the theoretical responses to the analytical challenges and an empirical illustration of the main arguments based on the empirical case studies presented in this special issue.

Die Zeit der grossen Pioniere? – Dienstleistungen der westdeutschen Medizin im Journal «Der Spiegel» 1947–1955

After 1945, Western medicine was influenced mostly by investigations from Britain and the USA. This paper deals with the presentation of German medicine in the German weekly "Der Spiegel" between 1947 and 1955, when German society changed from a post-war community focussed on survival to a modern western society. The paper will particularly focus on medicine as a service, dealing not with diagnostic and therapeutic innovations, but with troublesome every-day problems of body and soul at the border of health and disease. The paper argues that "service medicine" was an important tool for German medicine to achieve social acceptance and to integrate itself into the new German democratic society with its private market economy.

Revisiting the welfare state system in the Republic of Korea

Abstract The Republic of Korea's welfare system has undergone radical institutional expansion since the 1990s, largely as a consequence of the financial crisis of 1997. In spite of these changes, public social expenditure remains extremely low — particularly with regard to all other OECD countries — with the result that the overall social insurance system and social welfare service sector remain underdeveloped. Thus, the current welfare system can best be characterized as a residual model, in that state intervention as a provider of welfare remains highly limited and the family and the private market economy play the central roles in offering a social safety net. This situation is largely the legacy of the so‐called ‘growth‐first’ ideology, which has remained the dominant approach favoured by the majority of the country's political and economic decision‐makers since the period of authoritarian rule (1961‐1993). The adoption of Western European‐style neo‐liberal restructuring, implemented following the 1997 financial crisis, has also played a role.

Revisiting the Welfare State Regime in Korea

Korea's welfare system has undergone radical institutional expansion since the 1990s, largely as a consequence of the financial crisis of 1997. In spite of these changes, however, public social expenditure remains extremely low. As a result, the overall social insurance system and social welfare service sector remain underdeveloped. Thus, the current welfare system in Korea can best be characterized as a residual model, in that state intervention as for provision of welfare remains highly limited and the family and the private market economy play central roles in offering a social safety net.

Some Fundamental Inadequacies of the Washington Consensus: Misunderstanding the Poor by the Brightest

The Washington Consensus suffers from fundamental inadequacies, and that a more comprehensive framework of the economic process is needed to guide the formulation of country-specific development strategies. The following five propositions summarise the set of interrelated arguments made in this paper: 1. The Washington Consensus was based on a wrong reading of the East Asian growth experience. This explains why some observers have called the trade regimes of Korea and Taiwan in the 1965-1980 period “free trade regimes” even though they featured extensive import tariffs and export subsidies. 2. There have been two phases to the Washington Consensus doctrine. The mantra of the first phase (Washington Consensus Mark 1) is “get your prices right”, and the falsification of this first mantra led to the emergence of the second phase of the Washington Consensus doctrine. The new mantra from the Washington Consensus Mark 2 is “get the institutions right.” The danger is that an elastic definition of the term “institutions” will render the current mantra intellectually vacuous. 3. While central planning went overboard in suppressing the private market economy, the Washington Consensus runs the danger of denying the state its rightful role in providing an important range of public goods. The Washington Consensus also runs the danger of denying the limitations of self-help in the case of sub-Saharan Africa by overlooking the possibility of poverty traps. 4. The Washington Consensus does not understand that the ultimate engine of growth in a predominantly private market economy is technological innovations, and that the state can play a role in facilitating technological innovations. The Washington Consensus is too hooked upon trade-led growth to acknowledge that science-led growth is becoming even more important. 5. The Washington Consensus does not recognize the constraints that geography and ecology could set on the growth potential of a country. For example, the trade-led growth strategy of East Asia cannot work with the same efficiency for a landlocked country. Foreign direct investment is also less likely to go to places that are malariainfested.

The Travails of Current Macroeconomic and Exchange Rate Management in China: The Complications of Switching to a New Growth Engine

Just when China's leaders receive conflicting signals of overheating and below-potential they encounter tremendous external pressure to revalue the Renminbi (RMB) substantially. Our conclusion is that the major macroeconomic challenges have their roots in China's inadequate marketization and continued discrimination against the domestic private sector. The monopoly state banks intermediate the large volume of savings not only inefficiently but also inadequately. The latter results in aggregate demand expanding slower than supply-side growth, imparting a deflationary tendency to the economy. The present remedy of increased public-directed investments can be a satisfactory solution in the short run, but they are a disaster in the long run because they would follow an increasingly rent-seeking path that is wasteful as in Japan (e.g. wasteful projects that benefit politically-connected companies), and the increased state enterprise investments would convert themselves into nonperforming loans. In partially-reformed China, public-directed investments via the state enterprises tend to veer out of control frequently and overheat the economy. China's persistent trade surplus is fundamentally linked to the deflation phenomenon because a chronic trade surplus means that national savings is larger than domestic investments, the result of inadequate financial intermediation. China should now expand its investment program to incorporate large import-intensive infrastructure projects as the alternative to the appreciation the RMB, or as an important complement to limited RMB appreciation. The additional construction would create jobs, relieve production bottlenecks, and preserve employment in China's export-oriented sectors. The long-run solution to eradicating the deflation bias and the tendency toward current account surplus lies in establishing an efficient financial intermediation mechanism. Frequent bank recapitalization is the biggest threat to China's fiscal solvency and macroeconomic stability. Our calculations conclude that the forthcoming second recapitalization since 1997 is the last one that China can afford. Even then, fiscal solvency and macroeconomic management requires that the state continues keeping interest rates artificially low in order to avoid reducing the present fiscal stimulus to accommodate the servicing of the bonds issued for the bank bailout. In short, China faces a difficult tradeoff between the maintenance of fiscal stimulus to keep growth on track and the promotion of financial market development via recapitalizing the state banks, splitting them up and privatising some of them, liberalising the establishment of private financial institutions, improving prudential monitoring and enforcement, and deregulating interest rates. The entry of Western banks into China's financial markets is not the same thing as the opening of the capital account. China would not be well served by a rapid opening of the capital account because foreign banks could suddenly become conduits for large-scale capital flight, or for rapid swings in short-term lending and repayments, or facilitators of bank runs (in which depositors do not merely switch banks, or switch from domestic banks to domestic currency, but actually switch from domestic deposits to foreign assets). Just as in financial market liberalization, capital account opening should also proceed in stages, because it must be accompanied by sophisticated financial market regulation, something that is clearly not in place at this time. The state-owned sector and state-controlled companies are still a serious threat to sustained high growth, banking sector solvency, and price stability. Worse, yet, the corruption within state enterprises undermine social stability. The transformation to a private market economy should be accelerated by faster privatization of state enterprises, and the reduction in legal discrimination against private sector activities.

Reflections on private market economy and social market economy

Although markets prevail throughout the world, there are significant differences in the economic, social, political as well as legal institutions in which these markets function. Many of these variations can be attributed in part to differences in levels of economic development and in part to the differing consensus about the role of corporations and of governments in the various countries. The paper compares the models of private market economy and social market economy. An understanding of the rules underlying private market economy and those governing social market economy is important in the context of of the evoloving new global economic architecture.

Performance of Agriculture in Eastern Europe: A Comparative Analysis of Pre and Post-Transition Period

Ever since the collapse of central planning first in Central and Eastern Europe and then in the former Union of Soviet Socialist Republics in late eighties, the Eastern European economies are in the process of transition from the centrally planned command economy to the market based economy. In recent years Eastern Europe and the Soviet Union have undergone fundamental economic and political transformation. Far reaching changes going far beyond the earlier years characterise the agrarian economy. A new agricultural structure based on private ownership, true cooperatives and market economy has emerged and has become operationally functional.

Women in cuba and the move to a private market economy

The question remains over what a private market, even one that is well-regulated and modified, ultimately means for the future of Cuban society. This article examines the impact of the recent economic changes in Cuba on women, and explores whether the status of women in Cuba can be sustained or improved with the introduction of a modified private market economy. Based on field visits to Cuba and on secondary sources, the authors discuss the status of Cuban women since the Revolution, and document the changes and challenges that these women currently face. The authors conclude that the unique gains of women following the Revolution may be threatened by the imperatives of a market-driven economy, but that Cuban women appear to be bracing themselves for the struggles that this may entail. Cuban women have retained their commitment to gender equality and are actively working toward improving their status in society.

The Optimal Speed of Transition: A General Equilibrium Analysis

We present a benchmark model for the optimal speed of transition from a state‐owned to a private market economy, based on the consumption‐savings decision in a closed economy. We abstract from frictions to focus on the macroeconomic conditions for accumulation of private capital and closure or restructuring of state‐owned enterprises. It is shown that hard budget constraints compensate for too slow speed of enterprise closure but that an excess speed of closure may slow down transition because of output contraction effects. This will especially be the case if such a deviation occurs at early stages of transition.

Skurdo, nedarbo ir nusikalstamumo ryšys

Straipsnyje analizuojama, kaip ir kodėl rinka bei jos nulemti ekonominiai santykiai daro įtaką nusikalstamumo lygiui pereinamuoju laikotarpiu. Nagrinėjamos nusikalstamumo tendencijos, ekonominės priežastys, skurdo, nedarbo ir nusikalstamumo sąsajos. Nedarbui mažinti siūloma valstybės lėšomis statyti gamybinius objektus ir juos nemokamai ar su didelėmis lengvatomis perduoti verslininkams, įsipareigojusiems pagamintą produkciją realizuoti užsienyje. Naudojamasi istoriniu loginiu ir statistinės analizės metodais.

Forming a colonial economy, Australia 1810-1850

List of tables List of figures Acknowledgements Part I. Forming an Economy: Introduction Part II. The Colonial Peopling of Australia: 1788-1850: 1. Introduction 2. Gross additions to the Australian population 3. The colonial population stock 4. Human capital in convicts Part III. Public Funding of Colonial Development: 1788-1850: 5. Introduction 6. British fiscal characteristics 7. The imperial fisc in New South Wales and Van Diemen's Land 8. Broad relations between British and Australian fiscs to 1821 9. The beginning of local budgeting: real and subterranean budgets 10. The conventional legal fisc in NSW: 1822-1950 Part IV. The Colonial Australian Economy 1810-40: A Historical, Statistical and Analytical Account: 11. Summary and questions 12. Towards a private market economy in Australia 1810-40 13. Structural adjustment and development 1810-40 14. Growth performance 15. Instability with special reference to the Depression of the 1840s and recovery Bibliography Appendices Index.