Real life is always difficult to fit into the rigid framework of the scheme. Classification is a complex matter of science. Life often “confuses” it, making its own adjustments. Given this, scientific thought is not limited to the development of types, but is also engaged in the study of subtypes (species), which actually represent each of the types of the system. Let’s consider the main ones.
The market type of economic system has its historically formed types. Their distinguishing criteria in modern literature are called:
the ratio of different forms of ownership; the ability (or impossibility) of an individual firm to influence the market price of a commodity; the possibility (or impossibility) of the firm’s entry into the industry producing this product; the ratio of mechanisms of market and state regulation; the nature of the relations between the owners of the main factors of production – capital and hired labor (the level of “democratization” of the economy).
Taking into account these criteria, there are two main types. First, the perfect type or market economy of free competition. The main features of this type of economy are private property, complete freedom of competition, a purely market mechanism of coordination.
Another type of economy is significantly different from this economy – an imperfect or market economy of imperfect competition. Its main features are the presence of large private property, corporate-private, joint-stock and state property, developed economic monopoly (Table. 2.1.).
Another type of market type of economy is now called a social market economy. If we summarize its various characteristics, we can conclude that a social market economy is a type of economic system in which market economic relations and a coordination mechanism are combined with the active solution of social problems.
The socially oriented type of economy of the market type is a stable combination of market economic relations with the active solution of social partnership tasks. |
Transitions from one economic system to another are special periods and states of the economy.
Each of the types of economic system, being implemented in specific conditions, acquires its own characteristics. This is how modern models of economic systems are formed and distinguished.
The concept of “economic model” appeared relatively recently, approximately in the 70s of the XX century. Behind the “models” began to see the lack of complete unity in the same type of economic system, its variants in real life manifestations.
What is the reason for the emergence of models? Most likely, different “soil” – the historical and geographical environment on which the model of the economy grows and develops. Factors in the formation of model differences include the following:
the different speed of the country’s previous historical development and the prerequisites created by it; the existing statehood with its attributes; national and ethnic characteristics;
differences in economic entities – their level of development, interests, inclinations, etc.
Table 2.1.
Comparative characteristics of the two main types of market type of economy
Perfect (free) market economy | Main comparative features | Imperfect Market Economy |
Sole proprietorship | Dominant forms of ownership | Significant share of large monopoly, corporate, joint-stock ownership |
Within individual enterprises | Scale of production | Within the framework of large firms and monopolistic associations, up to transnational |
Free Market | Coordinating mechanism | Active government regulation combined with market regulation |
Economic activity of sole proprietors on the basis of their own solutions | Economic mechanism | Marketing methods of management at the level of firms and forecast-program – at the macro level |
Missing | Level of “democratization of the economy” | Growing in different national forms |
Insecurity of citizens from unemployment, disease, poverty | Social guarantees | Public and private social insurance funds |
All this cannot but affect the specific manifestations of a particular type of system in certain national-state conditions, i.e. on the formation of one or another model for the implementation of this type of system. In other words, models in the economy are a manifestation of different options for the economic development of this type of system.
What can be singled out as criteria for distinguishing models? The doctrine of models is only taking shape, so it is too early to talk about the unity of opinions here. However, now the following can be called as criteria for distinguishing models:
the level of development of the national economy, its productive forces; the degree and nature of state regulation of the economy; selection of national economic priorities; features of the motivation system; features of social protection; subject-ethnic features of the country.
Of the modern main market models, the following stand out.
The American Model of the Economy. It is based on free private enterprise, strong economic potential, as well as on a developed desire for personal gain and wealth. It is characterized by high labor productivity and individual economic self-responsibility. Partial benefits and allowances are addressed to low-income segments of the population.
Japanese model. It is characterized by such main features as reliance on national priorities, the primacy of national interests over personal ones, a high level of discipline, and active state programming. In accordance with this, some lag in the level of earnings from labor productivity is considered acceptable there and contributes, along with high quality, to the expansion of the range of competitive Japanese goods.
The East Asian model is supported by the state’s assistance in the financial and credit sphere to those subjects of the market economy that can win in domestic and international competition and thereby bring the country to an advanced competitive position.