The main economic task at all historical stages is the choice of the most effective option for the distribution of production factors in order to solve the problem of limited resources and unlimited human needs. A reflection of this problem is the formulation of three main questions of economics (Figure 12).

Rice. 12.

Let's look at each question in more detail.

The first fundamental question - which goods to produce - can be demonstrated by the example of an organization producing two main goods - good A and good B. The factors of production used to produce the first good (A) cannot be simultaneously used to produce the second good (B). Thus, we can say that the production of goods A leads to the loss of the opportunity to produce goods B and, in turn, has an opportunity cost.

The opportunity cost of a good or service is the best cost foregone by choosing a particular alternative that requires the same time or resources.

Cash cost and opportunity cost are overlapping concepts. Some opportunity costs, such as medical fees, are in the form of monetary costs, while others, such as the cost of leisure time, are not measured in monetary terms.

In this case, tuition fees represent an opportunity cost, because in fact, it can be spent on satisfying other needs. At the same time, such monetary costs, such as the purchase of clothing, food, etc., always exist and therefore are not included in the opportunity cost.

The second basic economic choice is how to produce.

This question is caused by the existence of several ways to produce a product or service.

A key factor in deciding how to produce is allocative efficiency, or Pareto efficiency. Figure 13 shows the consumption opportunity curve MN.

Figure 13. Pareto efficiency

Any point on the curve (for example, A or B) is Pareto efficient. Movement along the curve means an improvement in the situation (resources, expenses) of one consumer while the situation of others worsens.

When efficiency is achieved, more of a good can be produced at the cost of losing the ability to produce something else if the factors of production and knowledge are constant.

However, production efficiency can be increased by improving the social division of labor. Its important characteristics are specialization and cooperation, which allow for comparative advantages in the production of goods to be taken into account.

The principle of comparative advantage is quite actively used not only for organizing production at an enterprise, but also in connection with the division of labor between firms or government agencies, as well as between countries.

The third key question of economics is who to produce for; it lies in the distribution of the produced product among members of society.

This issue can be considered both from the point of view of efficiency and from the point of view of equity (Figure 14).

Rice. 14.

The questions of what, how and for whom to produce are basic and common to all types of farms, but different economic systems solve them in their own way.

Traditional economics.

In a traditional economy, the main economic problems are resolved mainly on the basis of traditional patriarchal, tribal, hierarchical ties between people.

The list of goods, production technology and distribution are based on the customs of a given country. The economic roles of members of society are determined by heredity and caste.

The products produced are mainly those needed for own consumption and not for sale.

As for production technology, in a traditional economy the same products are produced from generation to generation, while production methods remain the same as they were hundreds of years ago. Technical progress and increased production efficiency are impossible because every manufacturer copies the work methods of their teachers. Every detail in the production process is enshrined in special rules. Thus, labor productivity remains at the same level for centuries.

For whom to produce or distribute the product among consumers - this issue is also decided on the basis of traditions passed down from generation to generation.

Along with equal distribution taking into account gender and age, there are elements of unequal distribution depending on the place occupied in the social hierarchy and depending on the results of labor.

For example, if Brazil grew mainly coffee last year, then this year it will grow coffee, using the same technological methods, and for the same importing consumers.

Also, examples of a traditional economic system can serve as remote villages in central Africa, in the jungles of Asia, in the desert corners of Australia, in the tropical forests of Latin America. Here people live according to ancient customs, do everything as their ancestors did, for example, they hunt and fish, grow wheat, rice, and coffee. They conduct subsistence farming, that is, they provide themselves with everything necessary for a minimum standard of living.

Market economy.

Characterized by private ownership of resources and the use of price to coordinate and control economic activity. Thus, what, how and for whom to produce is determined by the market, prices, profits and losses of business entities.

The manufacturer strives to produce products that satisfy the needs of the buyer and bring him the greatest profit. The needs of society are expressed in the demand for a particular product, and the scale of demand is determined by how much people can pay for various goods. Those products will be purchased whose price and quality satisfy consumers.

Quantity and price are inversely related: when the price falls, demand increases, when the price rises, demand decreases. This relationship is called the law of demand. In economic theory, this relationship is depicted using a demand curve (Figure 15).

Rice. 15.

On the other hand, the volume of goods produced and their range are expressed in the supply of goods. Manufacturers will produce those goods whose price reimburses them for their costs and makes a profit. In other words, they will strive to sell more goods at a higher price. This relationship is called the law of supply. This relationship is depicted using a supply curve (Figure 16).

Rice. 16.

Prices for goods are determined based on the interaction of supply and demand. Consumer demand plays a critical role in determining what and how much to produce. Consumers “vote with their rubles.” If enough votes are cast in favor of a given product to ensure a profit for enterprises, then they will produce it.

When consumer demand increases, profits increase, which serves as a signal to expand production. Conversely, if consumer demand decreases, then profits decrease and production begins to decline.

How to produce? In a market economy, production is carried out by those enterprises that use the most effective, that is, the most profitable, technology. Effective technology involves choosing resources whose prices are relatively low, because The business executive responds with the desire to produce products at lower costs than his competitor, in order to sell more and at a lower price.

The technology and organization of production, the use of technical progress, and various management methods are aimed at solving this problem. Prices for resources, in this case the cost of equipment and the level of wages, provide the basis for solving the problem of how to produce.

If there is a lack of capital in a country to buy expensive equipment, but at the same time there is cheap labor, then labor-intensive technology is chosen.

For whom to produce? That is, how should the products produced be distributed among members of society?

In principle, products are distributed among consumers in accordance with the consumers' ability to pay the market price for it. These opportunities, in turn, are determined by consumer income. The amount of income directly depends on the prices of resources.

What a consumer will buy depends on the prices of goods and services, in other words, the price of a product plays a key role in determining the range of goods and services that the consumer will receive.

Thus, the role of price in a market economy is very significant (Figure 17).

Rice. 17.

Command economy.

A command economy is the opposite of a market economy. It is based on state ownership of all material resources. All decisions on major economic problems are made by the authorities.

For each enterprise, the main points are provided for in the production plan (Figure 18).

Rice. 18.

economic economic price economics

There are countries in which all resources, including consumer goods and services, are allocated by directive. This is, for example, how economic life is organized in the DPRK. Currently, command economies operate in Cuba, North Korea, and some countries in Southeast and Central Asia.

A mixed economy occupies an intermediate position between a purely market economy and a command economy. Most countries in the world live in this economy. It all depends on the extent to which the government is involved in the economy.

Table 5. Solving the main issues in a mixed economy

Thus, in the conditions of economic activity, all participants in economic processes are in one way or another in a state of choice: they choose which resource to use now and which to use later, which goods to produce, etc. Accordingly, three fundamental questions arise in economics: “what to produce?”, “how to produce?” and “for whom to produce?” The answer to these three questions depends on the type of economic system used, which in turn differ in the way economic life is organized, the attitude towards property, the degree of government regulation, etc. It is these distinctive features that underlie the solution to the issues raised.

Let us analyze the economic efficiency of the types of economic systems described above for a number of countries using different economies, based on data contained in United Nations (UN) Reports.

To analyze the effectiveness of the applied economic system and the levels of development of different countries, economists most often use the following indicators:

· gross domestic product (GDP) per capita;

· gross national product (GNP) per capita;

· indicator of economic competitiveness;

· human development index (HDI).

We focus on the analysis of such countries as Russia and China - they represent a mixed economy, the USA is a market economy, as an example of a traditional type of economic system, countries are indicated that are in last place on the list, which means that these countries have an undeveloped economy, and such an economy is assessed as traditional. At the end, an analysis of the USSR as a country representing a planned economy will be carried out.

GDP per capita determines the level of economic development of a state. GDP per capita cannot be considered an accurate characteristic, since the sectoral structure of production, the quality of manufactured goods, the efficiency of materials and energy consumption per unit of production, etc. are of considerable importance. For comparability, all indicators are expressed in a single currency - the US dollar. Conversions from national currencies to dollars are carried out at market exchange rates.

Tables 6 and 7 show annual GDP per capita in the world's richest and poorest countries, in nominal (absolute) terms, expressed in current US dollars (not adjusted for inflation). Data are presented as of 2014 (published in July 2015, updated in December 2015).

Table 6. Countries with the highest GDP per capita in 2015

	GDP, million dollars		GDP million dollars
	Luxembourg			Isle Of Man
	Liechtenstein
	Singapore

Table 7. Countries with the lowest GDP per capita in 2015

Thus, according to the rating tables, we can conclude that the United States, with its market economy, is significantly ahead of Russia and China, which are very far from the leading positions; as for countries with traditional economies, they are located at the very end of the list, which indicates minimal values GDP per capita speaks of the backwardness and underdevelopment of their economic systems. Russia ranks 79th (from 47th in 2007) in the world in terms of GDP per capita (23,700), China 112th (14,300), USA 19th (56,300).

Gross national income per capita gives an idea of ​​the amount of goods and services produced on average per resident of the state, or, in other words, how much each resident of the country would receive if the entire annual national income were distributed among everyone citizens of the country equally. GNI per capita is also called "per capita income" or "per capita income".

Tables 8 and 9 show annual GNP per capita in the world's richest and poorest countries in nominal (absolute) terms, expressed in US dollars at current prices (not adjusted for inflation). Data are presented as of 2014 (published in July 2015, updated in December 2015).

Table 8. Countries with the highest GNP per capita in 2015

Table 9. Countries with the lowest GNP per capita in 2015

The first places are occupied by economically developed countries, including the USA - 10th place (55200), which closes the top ten, Russia ranks 57th in the world in terms of GDP per capita (13220), China 80th place (7400), which closes the country's ranking with a traditional economy, for comparison, Niger - $410 million.

In recent years, the indicator of economic competitiveness has been used as a criterion for the effectiveness of the economic system.

For comparison, China and India occupy 40th and 50th place in this ranking, respectively. Economically developed countries retain first place.

The competitiveness indicator cannot fully characterize the economic efficiency of a country, but it fairly reliably assesses one of all sides. The category of competitiveness is one of the key ones, since it expresses the economic, scientific, technical, production and other capabilities of the country’s economy.

Tables 10 and 11 show the values ​​of the competitiveness index in the richest and poorest countries in the world. Data are presented as of 2014 (published in July 2015, updated in December 2015).

Table 10. Countries with the highest competitiveness index in 2015

Table 11. Countries with the lowest competitiveness index in 2015

The 2014-2015 Global Competitiveness Ranking is topped by Switzerland, which has been ranked first for the sixth year in a row. Second place, like last year, is occupied by Singapore. The United States improved its ranking from 5th to 3rd place and continues to be the world leader in providing innovative products and services. Finland takes fourth place, Germany takes fifth place. Further in the top ten rankings are: Japan (6th place), Hong Kong (7th), the Netherlands (8th), Great Britain (9th) and Sweden (10th).

In 2015, Russia rose in the ranking from 53rd place to 45th (4.44). Compared to the previous year, Russia's position has improved largely due to macroeconomic factors, in particular due to the low level of public debt and the continuing budget surplus.

An important indicator of the effectiveness of the economic system is the standard of living of the population. The Human Development Report, published by a specialized international recording body - the United Nations Development Program (UNDP), provides human development indices (HDI).

Tables 12 and 13 show the HDI values ​​in the richest and poorest countries in the world. Data are presented as of 2014 (published in July 2015, updated in December 2015).

Table 12. Countries with the highest HDI in 2015

Table 13. Countries with the lowest HDI in 2015

The leading position is occupied by Norway, second place in the ranking belongs to Australia, and the USA is in 8th place. Niger has the lowest HDI score. Russia, according to UNDP data, ranks 50th in the list in 2015 (0.798). According to this indicator, our country is ahead of Panama, Belarus, Mexico, and Uruguay. China ranks 90th (0.727). In 1988, the USSR was in 26th place according to a UN report.

Let's consider the key performance indicators of a planned economy using the example of the USSR with the end. 20s - early 30s XX century until 1992

Until the end of the existence of the USSR, the Soviet economy and industry ranked second in the world in terms of gross indicators, second only to the United States (approximately 50% of the US economy). The USSR's share in world industrial output was 20%. Only at the turn of the 1980s and 1990s. The USSR's GDP, without taking into account price parity, turned out to be slightly less than that of Japan.

In 1988, the USSR was in 26th place in terms of living standards (HDI) according to the UN report (Table 14).

USSR-Russia

During the period from 1950 to 1981, the USSR's GNP, according to the CIA, grew by an average of 4.6% per year, while the growth of US GNP over the same period averaged 3.4% per year.

From the data of GDP, GNP and the list of places according to the HDI it follows that the USSR was catching up with the developed countries of Western Europe.

Thus, based on the analysis of the main indicators of economic efficiency of countries representing various types of economies, certain conclusions can be drawn.

Definitely, the traditional economy cannot be called the most effective, since the countries in which it is used occupy the last places in the rating tables for all indicators.

The mixed economy does not have a clear interpretation. There are several interpretations, but they all do not contradict each other. A mixed economy is a simultaneous combination of the private and public sectors of the economy, market and government regulation, capitalist trends and socialization of life, economic and non-economic principles. If we rely on the data of the study, we can say that countries that are representatives of mixed economies, and such are Russia and China, are far from leading positions and are inferior to developed countries with market economies in all key indicators: in terms of GDP, GNP and etc.

The most controversial issue at the present stage is the choice between a planned and market economy.

At the same time, based on the analyzed data, we can say that countries with market economies have the best indicators and are the leaders of the rating under consideration.

I think it is more acceptable to consider a planned economy using the example of the USSR before 1990.

A planned economy and a market economy are just ways to achieve a certain goal (plan). In one case this is a method of directive-addressed management, in the other it is structureless management.

So, which method is better?! Each area of ​​production has its own better management method. For example, for the production of consumer goods, the market method is better, since there can be a great many plants and factories and it is impossible to keep track of them all, especially since in this case the private owner is much more efficient than when the owner is the state. Heavy industry may or may not be profitable. Or it may become profitable after a significant amount of time. But, nevertheless, it is an integral element of the economy. Defense factories, ferrous metallurgy, oil industry. Here, of course, “public administration” is most appropriate.

In the USSR it was a structural method of management, directive-addressed, i.e. on command from above, everyone did what was required. Those. the plan is the goals of the state, and the market is the way to achieve the plan in a structureless way. Therefore, when a planned economy is contrasted with a market economy, it is the same as comparing a city with the road along which you walk to it.

Thus, at the present stage, the question of the effectiveness of one or another type of economic system is open and problematic. It all depends on the goals pursued by the state and what plan it adheres to.

1. Main economic issues

Each society, faced with the problem of limited available resources with an unlimited growth of needs, makes its own choice and answers the three main questions of economics in its own way.

What to produce? How to determine priorities in meeting needs, which goods and in what quantity should be produced?

How to produce? How to use available resources most effectively, what resources to attract, how to organize production?

For whom to produce? How to distribute produced goods, who will receive them and on the basis of what principles?

Depending on how society answers the main questions of the economy, certain types of economic systems emerge: traditional, market, centralized.

An economic system is a way of organizing the joint activities of people in society. The concept of an economic system includes such decision-making mechanisms as the legal system, forms of ownership, moral norms, habits, customs accepted in a given society.

2. Types of economic systems

In a traditional economic system, the three main questions of economics (what to produce? how to produce? for whom to produce?) are resolved in accordance with established traditions. Examples of observed traditions in the economy are: customary farming methods, norms of consumption of certain products, religious prohibitions on the production and consumption of specific goods, etc. Sales and purchase relations are poorly developed, agriculture predominates.

Most of the history of human development took place within the framework of the traditional economic system.

O Remember from the course of general history what forms of social

development corresponds to the traditional economic system.

The main incentive for economic activity under the traditional system is the desire to survive. The advantages of this system are predictability and stability. Serious disadvantages include a low standard of living, lack of progress and economic growth.

A centralized system, which is also called a planned, administrative, command system, is characterized by the fact that state ownership is the main form of ownership. Three main issues are decided by central government agencies. These decisions are reflected in state plans and take the form of directives (orders), which are binding on all enterprises. Centralized regulation is carried out not only in the sphere of production of goods, but also in the sphere of their distribution. Such an economic system was implemented in the Soviet Union and, partly, in the countries of the socialist community. The centralized solution of the main economic issues in the USSR made it possible to achieve success in the natural sciences, space exploration, ensure the country's defense capability, create powerful social protection systems, etc.

However, the command-administrative economic system of the USSR turned out to be unable to ensure the development of personal initiative. One of the principles of a command economy is the principle of equal distribution. If an enterprise managed to make a large profit, then almost all of it was confiscated and transferred to the state budget.

Workers received almost the same wages; incentives for highly qualified, creative work were insignificant and had not so much a material as a moral basis. All this gave rise to the enterprise’s disinterest in improving production technology, increasing productivity, and the lack of personal interest of people in the results of their work. Gradually, the USSR began to lag behind the leading powers of the world community in the most important socio-economic indicators. The suppression of economic independence of economic entities led to a deterioration in the quality of economic growth and its slowdown. There was a need for radical reform of the economic system.

Market system. In a market system, the role of government is limited. The main subjects of market relations are economically independent participants in economic activity: citizens and firms. Their interaction takes place on the market. A market is any form of contact between sellers and buyers on the basis of which purchase and sale transactions are made. There are many types of markets; they are classified according to the economic purpose of the objects, by geographical location, and by industry.

Markets are in constant interaction, forming a single complex system.

The basis of the market mechanism is individual freedom in making and implementing economic decisions. Freedom of choice in a market economy is enjoyed by entrepreneurs, resource owners and consumers.

Enterprises have the right to purchase factors of production at their own discretion, produce those goods and services that they consider necessary, and choose the method of their production; In this case, decisions are made at your own expense, at your own risk.

Resource owners can use resources at their own discretion. This also applies to the owners of labor resources; they can engage in any type of work that they are capable of.

Consumers can buy the goods and services they want within the limits of their income. In a market economy, the consumer occupies a special position; it is he who decides what the economy should produce; If the consumer does not want to buy goods and services, then the firms will go bankrupt.

The main form of ownership of factors of production is private. Private property assigns to a person the rights to own, use and dispose of economic goods or resources.

Remember from your social studies course what property is.

The main issues of the economy in a competitive environment are resolved on the basis of a system of free prices under the influence of market information.

The question “what to produce?” decided by firms taking into account consumer demand.

The question “how to produce?” is decided by firms taking into account the profitability motive, i.e. firms choose the most efficient method of production.

The question “for whom to produce?” is decided in accordance with the solvency of buyers.

The main incentive for enterprises to operate in a market system is profit. The advantages of a market economy are more efficient use of resources, system mobility, its ability to adapt to changes, and the introduction of new technologies. But the market system has a number of shortcomings, so-called market “failures,” which we will consider below.

All types of economic systems can be represented in the form of a diagram.

In real life, all countries have a mixed economic system, which combines the features of other systems: traditional, centralized and market. Depending on their predominance, a mixed economy of traditional, centralized or market type is distinguished.

3. Mixed economic system

In a market economy, problems arise that the market system cannot solve. Such cases of market failure are: inflation, unemployment, the emergence of monopolies, cyclical economic development, uneven distribution of income of citizens.

In a market system, the need to produce public goods also arises. Public goods are economic benefits, the use of which by some members of society does not exclude the possibility of their simultaneous use by other members of society. These include, for example, national defense, fire protection, emergency response (earthquakes, floods), state television and radio broadcasting, etc. Public goods differ from private goods, which have a private seller and a private buyer, in such properties as non-competitiveness, non-excludability and non-profitability. Non-competitiveness means that goods and services can be

used by many people at the same time; at the same time, the amount of goods available to others does not decrease (for example: lighthouse, fireworks). Non-excludability is the impossibility of excluding those who do not pay for them from using these services, the so-called “rabbit effect”, for example national defense or street lighting. Hence the non-profitability of public goods, the unattractiveness of their production for commercial firms (for example: firefighters, emergency rescue services.

Moreover, the market is unable to solve the problem of externalities. Externalities are positive or negative impacts on those who do not participate in the production or consumption of a given good.

Examples of a positive external effect: a free bus to the supermarket - for local residents, a good road to a rich mansion - for everyone who will use this section of the road.

Examples of a negative external effect: environmental pollution by an enterprise, smoking in public places, etc.

Both positive and negative external influences reduce the efficiency of resource use, since in both cases the price of the product is underestimated. At the same time, the quantity of goods sold is artificially low in the case of a positive external effect and unjustifiably inflated in the case of a negative external effect. In the topic of market equilibrium, we will return to this issue and analyze specific situations with externalities.

The presence of market failures necessitates government intervention and the formation of a mixed economic system. In mixed

system, private and public organizations jointly exercise economic control.

Currently, Russia has a mixed market economy.

Three main questions of economics:

What to produce?

How to produce?

For whom to produce?

Depending on how society answers the main questions, a certain type of economic system is formed: traditional, command or market.

The presence of market failures necessitates government intervention and the formation of a mixed system.

Basic Concepts

Economic system Main issues of economics Traditional system Centralized system Market system Market

Private property Mixed system Market failures.

Public goods

External effects

Questions and tasks

1. What is an economic system?

2. Name the three main issues of economics. Why does every society have to deal with these issues?

3. How are the main issues resolved in the traditional system?

4. Which form of ownership is the main one in a centralized system, and which is the main one in a market system?

5. What forces firms to produce quality goods in a market economy? Explain why.

6. Give examples of market failures.

7. What characterizes the modern economy in Russia as an economy of a mixed market type?

8. What are public goods and services? Why don't companies produce them?

9. “Either power or the ruble - there has not been and is no other choice in the economy since the ages, from Adam to the present day.” How do you understand this statement by N. Shmelev?

The main economic task is to choose the most effective option for allocating factors of production in order to solve the problem of limited resources and limitless human desires. A reflection of this problem is the formulation of three main questions of economics.

1. What should be produced - i.e. what goods and in what quantity;

2. How the goods will be produced, i.e. by whom, with what resources and what technology should they be reproduced;

3. For whom the goods are intended, i.e. who should consume goods and benefit from them.

Let's look at the content of each question. The first most important choice- which goods to produce can be easily illustrated by the example of a society producing only two goods A and B. Factors of production used in one place cannot at the same time be used in another production. This means that producing good A entails the loss of the ability to produce good B and has an opportunity cost.

The opportunity cost of a good or service is the cost measured in terms of the lost opportunity to engage in the best available alternative activity requiring the same time or resources.

Cash cost and opportunity cost are overlapping concepts. Some opportunity costs, such as tuition, take the form of monetary expenses, while others, such as the cost of leisure time, do not appear in monetary form. Some monetary expenses, such as tuition, represent opportunity costs because... could have been spent on other needs. Other monetary costs, such as clothing, food, etc., always exist and are therefore not included in opportunity cost.

Second Basic Economic Choice- how to produce. It refers to the existence of multiple ways to produce a good or service. Cars can be made, for example, in highly automated factories with huge amounts of capital equipment and relatively little labor, but they can also be made in small factories that use more labor. A key consideration when deciding how to produce is allocative efficiency, or Pareto efficiency.

Pareto efficiency is a level of economic organization at which society extracts maximum utility from available resources and technologies, and it is no longer possible to increase one's share of the result without reducing another.

When efficiency is achieved, more of a good can be produced at the cost of losing the ability to produce something else if the factors of production and knowledge are constant. However, production efficiency can be increased by improving the social division of labor. Its important characteristics are specialization and cooperation, which allow for comparative advantages in the production of goods to be taken into account.

Comparative advantage is the ability to produce a good or service at a relatively lower opportunity cost.

Let us illustrate the principle of comparative advantage with an example. Let's assume that two students work part-time in an office. Sergey can type a letter in 5 minutes, write and seal an envelope in 1 minute. Andrey needs to spend 10 minutes on the letter and 5 minutes on the envelope. Working independently of each other they can produce 14 letters per hour. Using the principle of comparative advantage, it is more efficient to organize work so that Andrey, who has a lower opportunity cost in typing letters, does only that. Then Sergey sealed and labeled the letters prepared by Andrei, spending 6 minutes on this, and in the remaining time he prepared another 9 on his own. In this case, the total result of the work will be maximum and amount to 15 letters.

The principle of comparative advantage has a fairly wide application. It can be used not only to organize production within an enterprise, but also in connection with the division of labor between firms or government agencies, as well as between countries.

The third key question of economics- This is the distribution of the produced product among members of society. It can be viewed in terms of both efficiency and fairness.

Efficiency in distribution is a situation in which it is impossible, by redistributing the existing amount of goods, to satisfy the desire of one person more fully, without thereby harming the satisfaction of the desires of another person.

Distributive justice has been interpreted in different ways. Let us highlight two extreme concepts. The first is that all income and wealth should be distributed equally. An alternative position is that justice does not depend on “equalization”, but on the operation of a distribution mechanism based on the right of private property and the absence of discrimination. At the same time, equality of opportunity is more important than equality of income. In a market economy, any product is distributed among consumers based on their willingness and ability to pay the prevailing price for it. Discussions about allocative efficiency are seen as part of positive economics, and those about fairness as part of normative economics.

The questions of what, how and for whom to produce are basic and common to all types of farms, but different economic systems solve them in their own way.

Major economic systems:

Traditional economics is an economic system in which the main economic problems of society - what, how and for whom to produce - are solved mainly on the basis of traditional patriarchal, tribal, semi-feudal hierarchical ties between people.

Market economy- this is an economic system in which the main economic problems of society are solved, first of all, through a competitive price formation mechanism.

Centrally planned or command economy- an economic system in which the main economic problems of society are solved mainly through the mechanism of directive centralized economic management.

Mixed economy is considered as a type of market economy, as an economic system in which, along with the developed private sector, the public sector of the economy also operates.

Transition economy is a modern economic system that exists in countries where the transformation of a centrally planned economy into a market economy is underway.

An economic system is a form of organization of the economic life of society.

Elements of the economic system:

Socio-economic relations. They are based on the forms of ownership of economic resources that have developed in each economic system.

Organizational forms of economic activity (subsistence farming, commercial farming, etc.).

An economic mechanism is a way of regulating economic activity at the macroeconomic level, as well as a system of incentives and motivations that guide participants in economic life.

Specific economic ties between enterprises and organizations.

In any economic system, economics solves 3 main issues:

What to produce?(That is, what goods and services, in what quantities, by when).

How to produce?(What resources to use, at what enterprises, with the help, what technology, etc.).

For whom to produce?(That is, the target group of consumers).

Question 4. Main types of economic systems and their characteristic features.

Economic systems differ in:

A method for solving major economic issues.

By type of ownership of the most important types of resources.

From the point of view of these criteria, the following types of economic systems are distinguished:

Traditional system.

These economic systems existed mainly in the initial periods of human history. Major economic issues were decided on the basis of instinct. Now these systems are much less common (in the most remote areas of the world, in economically underdeveloped countries).

Traditions, customs, heredity, class, rituals determine what, how and for whom to produce. Consequently, this economic system is based on backward technology and widespread manual labor. Small-scale production is of great importance. It is based on private ownership of productive resources and the personal labor of their owner. Small-scale production is represented by numerous peasant and craft farms that dominate the economy. The role of the state is active - providing social support to the poorest segments of the population. The natural communal form of farming predominates.

Administrative command system.

In this system the main role is played by the state. It is it that decides the questions of what, how and for whom to produce with the help of centralized planning and management.

Character traits:

Public ownership of all economic resources, monopolization of the economy.

Coordination of economic activities is carried out on the basis of hierarchy, that is, the administrative method of subordination to a higher authority.

Management of the economy is carried out from a single center using orders and direct commands.

The center gives instructions: what, how and for whom to produce, where to deliver products, in what quantity, at what price. Consequently, the center must know and determine in advance all needs, all resources. On this basis, a directive plan for economic development for a certain period of time is drawn up. Each employee is given specific tasks, and their implementation is strictly controlled.

Giant monopolies do not care about introducing new equipment and technology.

A significant portion of resources is allocated to the development of the military-industrial complex.

Examples of countries: USSR, countries of Eastern Europe.

Practice has shown that such a system can be effective in extreme conditions, in emergency circumstances (war). However, in the long term, in a normal socio-political and economic environment, it cannot be effective. Consequences: loss of moral and material incentives to work, loss of a person’s sense of ownership, equalization of pay, and, consequently, a decline in production. The economy becomes inefficient.

Market system.

The market is a mechanism for interaction between sellers and producers, a balance of supply and demand.

Question “what to produce?” The consumer decides.

Question “how to produce?” decided by the manufacturer. Under pressure from competition, manufacturers are trying to innovate so as not to go bankrupt, in order to reduce their costs.

Question “For whom to produce?”- in a market system, for those who have money.

Thus, in a market system, the main means of coordinating economic activity is commodity-money relations and competition. Private property is predominant. This is a very tough system. You have to pay for mistakes in rubles, since miscalculations lead to losses, ruin, and bankruptcies. This system is based on the principle of economic feasibility, that is, on the desire to achieve maximum results at minimum costs. In a competitive environment, every entrepreneur tries to produce a better quality product, which means he strives to introduce new equipment and technologies. All this contributes to scientific and technological progress.

However, this is not a perfect system and has many shortcomings. As a result of competition, some are ruined and others are enriched, therefore, the property stratification of society is growing. Social guarantees are minimal, since the state plays a small role, being only an arbiter who monitors the implementation of laws. Thus, high efficiency is combined with a violation of the principles of equality and social justice.

Mixed system.

It should be borne in mind that in real life there is no market economy in its pure form. It exists only in theory. In real life, the modern economic systems of most developed countries are mixed.

The main feature of a mixed economy: both the state and the private sector play an important role in answering the questions: What? How? For whom to produce?

Planning methods are becoming quite widespread in it: development plans for individual firms based on marketing research, specific government intervention. Plans at different economic levels influence the structure and quantity of products produced, ensuring their greater compliance with social needs.

The problem of using resources is solved within large companies also on the basis of an analysis of promising industries.

Thus, the state in a mixed economy acts in many directions (including financing of new, low-profit industries, retraining of personnel, development of medicine, social protection), exerting an influence on the economy, which increases sharply during periods of crisis.

However, the market mechanism continues to play the main role in answering the classic three questions.

Models of economic organization:

American model is a liberal market-capitalist model, which assumes the priority role of private property, a market-competitive mechanism, as well as a high level of social differentiation.

German model– a model of a social market economy, which links the expansion of competitive principles with the creation of a special social infrastructure that mitigates the shortcomings of the market and capital.

Swedish model is a social model characterized by a high level of social guarantees based on broad redistribution of income.

Japanese model– a model of regulated corporate capitalism, in which favorable opportunities for capital accumulation are combined with the active role of state regulation in the areas of programming economic development, investment and foreign economic policy and with the special social significance of the intra-company principle.

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Lecture:

Main economic issues

Economic science, guided by the principle of rational use of limited resources to satisfy the unlimited needs of people, seeks answers to the questions: what, how and for whom to produce?

What to produce? This means deciding what, in what quantity and of what quality economic goods (goods and services) need to be created.

How to produce? This means deciding what resources and technologies will be used in the production of certain economic goods.

For whom to produce? This means determining for which categories of people (market segment) the goods produced will be intended, for example, toys for children, cosmetics for women.

The answers to these questions depend on the economic system operating in a particular society.

Economic system is a set of principles and rules of economic relations that arise in the process of production, distribution, exchange and consumption of goods.

Scientists distinguish traditional, planned (command), market and mixed economic systems. Let's consider their characteristic features.

Traditional economic system

The oldest type is the traditional economic system. It is characteristic of primitive society, but also exists in modern countries of South America, Asia and Africa, where resources are very limited.

Signs:

• resolving issues of what, how and for whom to produce is based on traditions (continuity);
• the basis of the economy is agriculture;
• communal form of ownership;
• universal manual labor and primitive production technologies that hinder the growth of labor productivity;
• subsistence farming, production aimed at satisfying one’s own needs and not for sale;
• low trade turnover, correspondingly low level of commodity-money relations;
• closed society, the existence of caste or class divisions that do not allow people to move from one social group to another, as a result of which socio-economic progress is hampered.

The traditional economic system has its advantages and disadvantages. The advantages are continuity, ease of organization of production, and minor environmental pollution. The disadvantages are low incomes, shortages of consumer goods, and limited economic growth.

Planned economic system

A planned (command) economic system is one of the signs of a totalitarian political regime. This type dominated during the Soviet era, but also functions in modern states, for example, North Korea and Cuba.

Signs:

• the decision of the main economic issues belongs to a centralized state body, which carries out directive planning of production;
• the basis of the economy is agriculture and foreign trade;
• the means of production are owned by the state, and only property intended for running a household can be privately owned;
• the emergence of a social division of labor;
• administrative regulation of prices;
• market monopolization.

The advantages of a planned economy are full employment, lack of inflation, free healthcare and education, and less social stratification between the poor and the rich. Disadvantages include a shortage of goods and services, an equal wage system, due to the lack of competition, producers (state monopolists) have no incentive to effectively use resources and introduce new technologies into production, and a race to fulfill the plan on time.

Market economic system

A market economy presupposes freedom of entrepreneurial activity, which is guaranteed by the state. The basis of the relationship between producers and consumers is individual interest and personal benefit.

Signs:

• the decision on what, how and for whom to produce belongs to the owner, producer, consumer;
• the basis of the economy is the service sector;
• a variety of forms of ownership is recognized, but private ownership predominates;
• deepening the social division of labor;
• trade relations are developing widely;
• pricing is free and regulated by market laws;
• competition;
• Scientific and technological progress achievements are being widely introduced into production.

The main advantage of a market economy is competition, which is necessary for producers to strive to create quality products and for consumers to have a wide choice of a particular product or service (assortment). Another advantage is the interest of producers in using resources efficiently and meeting the maximum needs of people at minimum costs. This system also has disadvantages. This is income inequality, a significant social gap between the poor and the rich, unemployment, and periodic economic crises. The problem of negative external (side) effects is acute. For example, the operation of a pulp and paper mill causes water pollution (release of waste into water); Increased use of cars by people leads to air pollution. The state is forced to intervene in solving such problems, eliminating market imperfections.

Mixed economic system

This type of economic system combines the features of command and market systems with the predominance of the latter. Therefore, one of the important features of a mixed economy is multi-sector, when the role of both the state and private individuals is significant in production. But this system may also contain features of a traditional economy. For example, perfume production in France is traditional. The role of the state in a mixed economy is great and consists in:

• preventing a monopoly on the production of economic goods (with the exception of strategically important goods, for example, military equipment and weapons, space equipment);
• preventing shortages of goods and services;
• price stabilization;
• ensuring employment of the able-bodied population and providing assistance to disabled citizens (for example, disabled people, pensioners);
• the production of public goods (for example, health care and education);
• protection from unscrupulous market participants;
• in the fight against negative externalities of production.

Along with the above advantages, there are also disadvantages of a mixed market economy. Unlike a command system, a mixed system cannot completely overcome unemployment, inflation and the significant gap between rich and poor. This type of economic system is typical for Russia, China, the USA, Japan and other developed countries.