Signs, traits and types of the market. Market signs and functions
The modern economy is a constant movement of mass goods, money and income moving towards each other. Goods are produced and delivered to the most remote points, where people are able to oppose them with either other goods, or monetary income, receiving from the sale of their goods. These streams move towards each other for the purpose of mutual exchange. If their quantitative and qualitative parameters coincide and correspond to the needs of people, their exchange will take place. Some participants in the exchange process will receive the goods they need, while others will receive the monetary equivalent of these goods.
The following conditions for the emergence of the market can be distinguished: 1) division of labor, which leads to specialization and exchange; 2) the independence of economic agents, or, as economists often say, the isolation of economic entities; 3) freedom of entrepreneurship.
The market as a system of economy is opposed, on the one hand, to a subsistence economy (traditional economy), on the other hand, to a planned economy (command economy).
The main features of a market economy are:
- · Economic freedom of participants in the production process (each of them makes economic decisions independently, without anyone's orders);
- · Competition (competition) of many sellers and buyers;
- · Maximization of private benefits as the goal of the economic activity of all participants in the economic system;
- · Regulation of production, exchange and consumption through the mechanism of market prices.
The economic theory explains the division of labor between commodity producers, their specialization by rationalism in the economic behavior of people. If various workers do not produce absolutely all the consumer goods they need (as in a completely natural economy), and specialize in the production of only a few of them, then their overall productivity will increase markedly. Therefore, instead of producing everything on their own, people begin to specialize in the manufacture of a few products, exchanging their surplus for other products that they are less successful in making. As a result, everyone wins. But in order for everyone to have a full set of all the necessary benefits, it is necessary to organize between them a constant exchange of various benefits.
The market is often viewed as a self-regulating economic system that best meets the needs of society, without conscious regulation. Pursuing his own benefit, a person "by the invisible hand of the market", as the founder of economic science, Adam Smith, met the needs of other members of society: "I have not heard that those people who exchange the products of their labor only for the sake of public benefit are very successful" Cit. according to: Economic theory: textbook for universities / ed. V.D. Kamaeva. - M.: Vlados, 2007 .-- S. 47 / Smiht Adam. The Wealth of Nations. New York. Modern Library, Inc. P. 423.
Initially, A. Smith's work "A Study on the Nature and Causes of the Wealth of Nations" was published in 1776. In the text of the Russian translation, many chapters have been translated with abbreviations and the exact translation of the "invisible hand" principle in the market process is not fully presented. interests, people often more effectively serve the interests of society than when they consciously seek to serve them.
The objects of the market are goods and money. The main category of a market economy is a commodity - a product of labor, produced not for own consumption, but for exchange for other goods, for sale. The goods are not only material goods ready for final consumption, but also factors of production (land, labor, capital) and intangible goods (services). For the convenience of commodity exchange in developed market relations, money is used, which is the equivalent of any goods.
The market can be viewed as a form of commodity economic relations. The exchange of products of labor, things by means of money becomes the rule of the economic life of society. The market and the market form of relations arose objectively, thanks to the development of the division of labor and the exchange of products.
Market - it exchange mechanism.
Market- it mechanism that brings sellers and buyers of goods together .
Market- this is a certain form of organization of the economic life of society, this is the unity of commodity and money circulation, through which there is an impact on social production and the entire reproduction process.
Subjects and objects of the market:
Market entities - sellers and buyers (can be individuals and legal entities). An individual of market relations is any person who sells or buys goods on the market. Legal entity of market relations - enterprises and organizations that buy or sell goods and are endowed with special rights to act as plaintiffs or defendants in court in case of conflict situations. The state is also a legal entity.
Market objects - this is all about which the relationship of purchase and sale arises. market objects - goods, material goods and services, as well as factors of production - factories, factories, land, minerals, financial and labor resources.
Reasons for the emergence of the market:
ü Economic isolation of commodity producers(the owner himself decides what, how and in what volume to produce; decides how to distribute the goods produced, determines the form of organization of production and labor, the form and amount of remuneration, etc.)
ü Economic and legal freedom of an economic entity(the owner has material and monetary funds at his disposal, with which he can acquire resources and establish the production process; the owner gets the opportunity to engage in the type of activity that interests him and brings income)
ü Limited resources(the limited resources predetermines the limitedness of the created goods and services, as a result of which the satisfaction of people's needs is carried out through the exchange of labor results through the market).
ü International division of labor and international specialization of production(different countries have different natural resources, minerals, climatic conditions, etc. - this situation predetermines the development of the international market).
Market signs:
ü Freedom of business and consumer choice (freedom of buyers and sellers)- producers decide for themselves what goods, when and in what quantity to produce, to whom and at what prices to sell them; the buyer must have a wide choice of sellers of the goods of the same name and the availability of funds with a stable purchasing power.
ü Unlimited number of market participants- only in this case the laws of competition come into force, prompting the manufacturer (seller) to introduce new equipment, technologies, improve quality, and reduce prices. Entrepreneurship should be available to anyone.
ü Full awareness of market participants about its state.
ü Unimpeded mobility of material, financial and labor resources (ability to move quickly, to act)- no one and nothing should restrain the flow of resources from less efficient spheres of production to more efficient ones.
ü Personal interest.
Market functions:
ü Regulatory - the ratio of supply and demand is established on the market, which makes it possible to determine which goods and in what volume are needed by the buyer. Thus, production is adjusted in relation to the needs and demands of consumers of material goods and services.
ü Stimulating - through prices, the market encourages producers to use new equipment and technology, reduce production costs, improve the quality of products, expand the range of goods and services.
ü Pricing - as a result of the collision of commodity supply and demand, as well as due to competition, the market sets prices for goods and services.
ü Information - the market is a source of information necessary for all its subjects, which provides data on the required quantity, range and quality of those goods and services that are supplied to the market, on the price level.
ü Competitive - competition is the engine of scientific and technological progress, it forces manufacturers to business activity, to search for new opportunities for economic growth.
ü Sanitizing - the market cleans the national economy of economically weak, non-viable entities, and vice versa, actively encourages the development of efficient industries.
ü Educational - the market system forms and educates an "economic person" who is characterized by prudence and enterprise, initiative and ability to be creative, willingness to take risks, and take personal responsibility for their actions.
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Signs of a perfectly competitive market:
1) Lots of buyers and sellers.
2) Free entry to the market for manufacturers and free flow of capital from the industry and into the industry.
3) Produced products are homogeneous (homogeneous products are products that can be measured in kilograms, tons, liters, cubic meters).
4) Free prices, which are formed under the influence of supply and demand.
An ideal market is a competitive perfect and free market that has:
Unlimited number of market participants;
free entry to and exit from the market;
free prices;
a significant number of sellers and buyers;
lack of pressure and coercion from the participants in relation to each other;
homogeneity of the products of the same name on the market.
Ideal market model - perfect competition
Perfect competition is a type of market in which many sellers offer buyers the same product, while having free entry into the industry, using general information about the price.
There should be a significant number of buyers and sellers of the given product on the market, who, under this condition, alone will not be able to influence the market equilibrium. None of them will have the appropriate authority. All subjects are fully subordinate to the market element.
Standard and identical products are sold. An example of such a product is flour of the same class, cereals, sugar, etc. If these conditions are met, buyers will not give preference to the products of a particular company, since the quality will be the same everywhere.
One seller with an ideal market model cannot influence the market price, because there is a sufficiently large number of firms that produce the same product. In perfect competition, every seller will have to agree to the price dictated by the market.
In an ideal market, there is no competition, since the quality of the product is absolutely uniform.
Consumers have access to pricing information. If any manufacturer decides to single-handedly increase the cost of his products, then he will simply lose his customers.
Sellers do not have the opportunity to come to an agreement and raise the price, because there are a lot of them in this market. The ideal market model assumes that absolutely every seller has the opportunity at any time both to enter a certain sector of the market, and to leave it, since there are no obstacles. The new company is created and closed without any problems.
Perfect competition is a model of an ideal market, in which individual sellers cannot influence the market price by changing the volume of production, because against the general background of the market, their share participation is practically equal to zero. If the seller decides to reduce their production and sales volumes, this will change the overall market supply negligibly.
The seller is forced to sell his products at the already established cost, which is the same for the entire market. The demand for his product changes quite elastic: if the seller sets the price of the product higher than the market price, then demand will drop to zero. If the cost is set below the market value, then the demand will grow indefinitely.
Perfect competition is an ideal market model based on a theory that does not exist in real life. Products differ from one manufacturer to another, and there are clearly barriers to entry and exit from the industry. Perfect competition is roughly represented in some agricultural markets among small market sellers, retail stalls, as well as construction crews, photo studios, etc. All of them are united by the approximate similarity of the proposal, a large number of competitors, the negligible small scale of the business, the need to work at the prevailing cost - i.e. there are many of the above conditions for a perfect market. Their example can be used to study the organization, functioning and logic of the work of small firms using a simplified and generalized analysis. In Russia, very often there are situations in small business that are close to perfect competition.
The concept of an ideal (perfect) capital market
Quite often, finance theories are based on the concept of the so-called ideal or perfect capital market.
An ideal market is one where there are no difficulties, so that the exchange of money and securities can be carried out easily and without any costs.
The ideal market has the following characteristics:
There are no transaction costs (associated with finding a partner, concluding a deal);
no taxes;
the presence of a large number of buyers and sellers, none of which affects the prices circulating on the securities market;
access to the market for individuals and legal entities is equal;
lack of information costs (fairness of information availability);
all actors in the market have the same expectations;
no costs associated with financial difficulties.
As a rule, in practice, most of the listed conditions are not met: there are also brokerage costs and taxes, individuals often do not have such access to the market as corporations have, quite often managers are better informed about the prospects of their firms than outside investors, etc. .d.
LECTURE 6. MARKET: CONCEPT, FUNCTIONS
6.1. Market concept
Turning to the concept of "market", there are two main approaches to its interpretation.
First based on the allocation of the political, ideological and philosophical content of the market and market relations, when the main characteristics of the market are considered:
a) the market as a way of organizing social production, based on free enterprise and the limited role of the state. In this capacity, the market opposes methods of organization based on the use of methods of central planning and administrative regulation;
b) the market as a way of behavior of business entities, determining the criteria for their decisions and the nature of relations between the subjects ("market behavior");
v) the market as a way of thinking, shaping the appropriate outlook of the participants in economic activity ("market thinking").
Second the approach to the interpretation of the concept of "market" is based on the allocation of its specific economic content. The market is interpreted as a mechanism that allows you to determine the ratio of supply and demand for various types of goods and services.
From the standpoint of economic theory market Is a system of economic relations regarding entrepreneurial activity based on various forms of ownership and the exchange of its results.
The main features of the market are:
Exchange of goods and services for the equivalent;
Distribution of benefits by factors of production;
Reproduction mechanism that regulates the renewal and development of fixed capital;
Self-regulation of economic equilibrium;
Means to stimulate the rational use of resources for the sake of maximizing benefits (profits).
The market originated many thousands of years ago at the stage of decomposition of the primitive communal system. Reasons or conditions for the emergence of the market:
Social division of labor;
Development of commodity production;
Separation of farms with responsibility for the results of production.
The market economy can be simple commodity and capitalist. The differences between them can be represented as follows (Table 6.1).
Table 6.1
Differences between simple commodity and capitalistproduction
Capitalist commodity production is possible only if there is a market that ensures the exchange of results.
The exchange is carried out either directly - barter: T – T 1, or indirectly with the help of money: T – D – T 1 , T – D ... D – T 1 .
Market entities are sellers and buyers, which are households (consisting of one or more persons), firms (enterprises), the state. Most market actors act as both buyers and sellers at the same time. All business entities closely interact in the market, forming an interconnected "flow of purchase and sale".
Market objects are goods and money. The goods are not only manufactured products, but also factors of production (labor, land, capital), services. As money - all financial resources, the most important of which is money itself.
The market mechanism of interaction between subjects assumes:
Consent of the exchanging parties;
Equivalent retribution;
Free choice of partners;
The presence of competition.
6.2. Conditions of occurrence and essence of the market
The market is a historical concept. It arose at a certain stage of socio-economic development and since then has undergone significant qualitative and quantitative changes.
Initially, the market actually arose and was defined as any physical place (urban or rural market square) where the acts of sale and purchase of goods took place. In this understanding, the market exists today, but its role in the modern economy is insignificant. With the development and deepening of the social division of labor and specialization, the boundaries of the market expanded, and with them its content and functions changed. Back in the last century, R. Barr wrote that economists "do not understand a market as a specific place where sales and purchases are made, but the entire territory, parts of which are linked by free trade relations in such a way that prices quickly and easily equalize."
Currently under the market a certain form of organization of social production is understood, which ensures the interaction of production and consumption through the price mechanism.
The price mechanism is a key link in market relations, since it is it that provides a link between producers and consumers, sellers and buyers, balancing the supply of goods and services and the demand for them.
Speaking of prices, we mean precisely market prices, which are not set by forces external to the market (for example, the state or the church, as was the case in medieval Europe), but by the sellers and buyers themselves, by their free expression of will. A market economy is an economic system that is controlled, regulated and managed by market ones, i.e. free prices.
An economic model of this type is based not only on the system of social division of labor and specialization, but also on the right of private property of the subjects of market relations. Let us consider in more detail the conditions for the emergence of the market.
The first condition(prerequisite) for the emergence of a market economy is social division of labor and specialization or, in other words, technical isolation participants in economic activity. It indicates that each of them is engaged in the production of some specific goods and services, working directly to meet not their own needs for these benefits, but the needs of other people. To meet the common needs of all participants in the social division of labor, they need to enter into an exchange with each other.
But exchange in itself is not tantamount to the existence of the market, just as the social division of labor is a sufficient condition for its development. Exchange takes place in all economic systems where there is a division of labor and specialization. It also existed in the Soviet planned economy, which, however, was not market-based, since the conditions of production and exchange (what and how much to produce, to whom and at what price to sell) were determined not by the producers themselves, but by the state represented by the State Planning Commission and branch ministries. It follows that the social division of labor is a necessary (without it there can be no exchange), but an insufficient condition for the existence of the market (relations of purchase and sale using the price mechanism).
The second prerequisite the emergence of a market economy is the so-called economic isolation of business entities, which can exist only when they are all independent, autonomous in making decisions about what, how and for whom to produce, how much, to whom and at what price to sell. Economic isolation arises on the basis of private property, then extends to collective property (cooperatives, joint stock companies). In essence, economic isolation means that the manufacturer is fully responsible for the results of his labor, that his welfare depends on the ratio of the benefits received from the implementation of the created good and the costs of its production. For such an economic order to exist, it is necessary that ownership of the means of production and the results of labor should be held not by the state, but by the producers themselves, i.e. to keep it private. Thus, the right to private property is a prerequisite for the formation, development and improvement of market relations.
The third condition effective functioning of the market economy is the independence of the producer, freedom of entrepreneurship. Off-market regulation of the economy is inevitable in any system, but the less constrained a commodity producer, the more room for the development of market relations.
Thus, the market system is characterized by the domination of private property, social division of labor, extensive development of exchange relations; it has specific principles and incentives for management based on freedom of entrepreneurship, freedom of choice of professional activity for everyone who wants to work, and freedom of consumer choice for each buyer.
6.3. Role and functions of the market
As we have already found out, the market is a collection of transactions for the purchase and sale of goods and services. Everyone enters into such transactions on a daily basis, when, for example, buys groceries in a store or pays for travel on public transport, buys a ticket to a cinema or theater.
The role and function of the market can be correctly understood when viewed within the broader framework. Such a system is a commodity-market economy. It consists of two relatively independent subsystems: a) commodity production and b) the market, i.e. exchange relations. These subsystems are inextricably reunited using direct and feedback.
The initial link of the general system - commodity production - has a direct impact on the market in several directions:
a) useful products are constantly being created in the sphere of production, which just as regularly become objects of market transactions;
b) simultaneously with the manufacture of goods, potential incomes of all agents of the commodity economy are created, which are subject to sale in market exchange;
c) due to the social division of labor, on which commodity production is based, the need for the very market exchange of products is created.
In turn, the market has a largely decisive inverse influence on the process of creating goods. Reverse economic links are the special functions of the market, expressing its essence.
The market performs the following functions: integration, information, regulatory, intermediary, pricing, sanitization. Let's consider them in more detail.
First function market - integration - is that the market integrates (connects) the sphere of production (thereby producers) and the sphere of consumption (consumers) into the general process of active exchange of products and services. Without a market, commodity production cannot serve consumption, and the sphere of consumption will find itself without goods that satisfy the needs of people.
Second function- informational. It lies in the fact that through constantly changing prices, interest rates for a loan, the market provides production participants with information about the socially necessary quantity, range and quality of those goods and services that are supplied to the market.
Third function- regulatory. It is associated with the impact of the market on all spheres of the economy, and above all on production. The market provides answers to questions what,how and for whom produce. He is the chief controller of the final production results. At the same time, the market exchange directly reveals to what extent the quality and quantity of created products correspond to the needs of buyers.
Fourth function- intermediary - is manifested in the fact that market exchange serves as a way to implement the economic interests of sellers (producers of goods) and buyers (consumers). The interrelation of these interests is based on the principle that was clearly formulated by A. Smith: "Give me what I need, and you will get what you need ...". Of course, this principle of personal material interest presupposes the exchange of usefulness needed by each other and the equivalence of a market transaction.
Fifth function- pricing. Usually products and services of the same purpose come to the market, but containing an unequal amount of material and labor costs. But the market recognizes only socially necessary costs, only the buyer agrees to pay them. Here, therefore, the value and price of a commodity is established, which is sensitive to changes in production, in needs, in the conjuncture.
Sixth function- sanitizing. The market mechanism is not a charitable system. He is tough and even cruel. It is characterized by social and property stratification, ruthlessness towards the weak. With the help of competition, the market cleans social production of economically unstable, non-viable economic units and, on the contrary, gives the green light to more entrepreneurial and efficient ones.
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Ohead
1. The market, its features and functions
2.Structure and infrastructure of the market
List of used literature
1. RMarket, its signs and functions
In modern economic literature, there are several definitions of the market:
the market is a set of economic relations of production and exchange of goods with the help of money;
the market is an exchange organized according to the laws of commodity production and circulation;
the market is a system of relations regarding the exchange of production results and services that take the form of a product;
the market is a mechanism of interaction between buyers and sellers, in other words, the relationship between supply and demand;
a market is a sphere of exchange within a country and between countries, linking producers and consumers of products.
The content of the concept of the market in the broad sense is unjustifiably reduced to only exchange. All phases of reproduction - direct production, distribution, exchange and consumption - are "drawn" into its orbit. In this sense, the market is a self-regulating system of reproduction, all links of which are under the constant influence of supply and demand.
The market as a system is a certain equilibrium combination of two principles - spontaneous, competitive and organizing, monopoly.
The basis of the spontaneity of the market, the competitive principle is the participation in competition of many independent, independent producers, who have different production conditions, due to the individual characteristics of the product.
The monopoly beginning presupposes the presence of a narrow group of producers of a specific commodity of elements of collusion; a certain uniformity of requirements, quality standards; orderly, coordinated, foreseeable actions.
The combination between competitive and monopoly principles must be optimal. For each specific situation, such an optimum is the maximum competition with a minimum of monopoly. Deviations from this optimum are fraught with great losses for society.
The market mechanism, where the combination of competition and monopoly is optimal, ensures that the structure of production corresponds to the structure of social needs, stimulates the introduction of new equipment and technology, encourages the best producers, punishes the worst.
The most important condition for the emergence of the market is the social division of labor. The division of labor is the totality of all currently existing types of labor activity. Usually there are three levels of division of labor: within the enterprise (single); between enterprises (private); at the headquarters of society (general - the division of labor into industrial and agricultural, mental and physical, skilled and unskilled, manual and machine).
Through the division of labor, an exchange of activities is achieved, as a result of which the employee of a certain type of specific labor gets the opportunity to use the products of any other specific type of labor.
The division of labor arose in ancient times. History knows a number of major stages of the social division of labor. The first of them is the separation of cattle breeding from agriculture, the second is the separation of handicrafts as an independent industry, and the third is the emergence of the merchant class. Then the branches began to split up, the social division of labor deepened. The positive significance of the division of labor for the growth of its productivity was emphasized by Aristotle.
A. Smith is considered the founder of the scientific theory of the division of labor, who considered in his work "Research on the Nature and Causes of the Wealth of Nations" all the main types of division of labor - within an individual manufacture, between industries, between town and country, between labor, between different regions and whole national farms.
The modern economic system is a kind of product of the ever-increasing scale of the division of labor. Deepening the social division of labor makes it possible to expand production capabilities and overcome the limited economic resources for the production of various goods. The limited resources and production capabilities force people to choose between relatively scarce goods necessary for consumption: releasing some of them at the same time means refusing to release others.
The condition for the emergence of the market is the specialization of labor. Specialization is a form of social division of labor both between different sectors and spheres of social production, and within the industry, and within the enterprise at various stages of the production process. There are three main forms of specialization: 1) subject (for example, automobile, tractor factories); 2) detailed (for example, ball bearing factories); 3) technological (stage) (for example, a spinning mill). market producer monopolization
Improvement, improvement of the production profile of subject-specific enterprises, the development of detail and technological specialization lead to the expansion of production ties - cooperation. The specialization of production in a number of industrially developed countries basically followed the path of expanding component and technological specialization.
One of the important reasons for the emergence of the market is the limited resources. The scarcity of resources, or limited production capabilities, extends to any factor of production, be it a person as a worker or capital and land. Employment of an employee in this industry excludes the possibility of his employment in all others. The productive capabilities of an employee are limited by the capabilities of his body and the specialization of his labor in relation to any one branch of production or type of work. Even the most capable person can produce only a small amount of goods. Not only human production capabilities are limited in society, but also all other factors (land, technology, raw materials). Their total number has limits, and the use in any one area excludes the possibility of the same industrial use in another. In economic theory, this phenomenon is called the law of limited resources. The limited resources are overcome by people through the exchange of one product of labor for another, i.e. through the market. Due to exchange, various products constitute a common mass, from which each person can choose for himself what he needs, offering in exchange the products of his labor. Without the possibility of such an exchange, each person would have to do a lot of work to satisfy their needs. In this case, economic progress and the development of civilization would slow down.
The second reason for the formation of the market is the economic isolation of commodity producers, their ability to freely dispose of the results of their labor. Benefits are exchanged by completely independent producers, autonomous in making economic decisions. Economic isolation means that only the manufacturer himself decides what to produce, how to produce, to whom and where to sell the created product. This isolation has historically arisen on the basis of private property. With the development of private property, the market economy also developed. Private property and market relations reached their high level under capitalism.
Private property objects are diverse. They are created and multiplied by entrepreneurial activity, income from running their own economy, income from funds invested in credit institutions, shares and other securities.
Subsequently, the isolation of commodity producers began to spread to collective and other forms of ownership represented by cooperatives, partnerships, joint stock companies, state and mixed enterprises.
The third reason for the formation of the market is the independence of the manufacturer, freedom of entrepreneurship. The market presupposes freedom of competitive behavior, freedom of management, protection of the interests of a specific commodity producer. Off-market regulation of the economy is inevitable in any system, but the less constrained a commodity producer, the more room for the development of market relations. Freedom of economic activity means the right of any economic entity, be it a person, family, group, collective of an enterprise, to choose the desired, expedient, profitable, preferred type of economic activity and to carry out this activity in any form permitted by law. The law is intended to restrict and prohibit only those types of economic activities that pose a real danger to the life and freedom of people, social stability, and contradict moral norms. Everything else should be allowed both in the form of individual labor and in collective and state forms of activity.
Different countries, their national economies went to a market economy in different ways. At the same time, there are general laws of its formation inherent in any country. The most important of them are:
* the presence of independent producers, freedom of entrepreneurial activity and guarantees of property rights of various economic entities;
* free market prices to counterbalance demand and sentence;
* competition of commodity producers;
* free flow of capital between industries and regions;
* the formation of a financial market, including the market for credit resources, the securities market and the foreign exchange market;
* the presence of a labor market, hired labor with a developed system of its training, retraining, intersectoral and interregional overflow;
* openness of the economy to world integration processes, the possibility of migration of labor, goods and capital.
Subjects and objects of the market. The subjects of market relations are participants in market transactions, purchase and sale transactions. These are, firstly, buyers, sellers, entrepreneurs and other individuals. Secondly, legal entities, which include all sorts of enterprises and associations, organizations, associations, cooperatives, joint stock companies, firms, the state.
Different approaches are used to classify the subjects of market relations. From the standpoint of the functions performed in the market, the subjects of market relations are divided into sellers and buyers. From the point of view of the forms of ownership, the subjects that operate on the basis of individual, private property are distinguished.
The market includes both entrepreneurs and workers who sell their labor, and end consumers, and owners of loan capital, and owners of securities. The main subjects of the market economy are usually divided into three groups: households, business (entrepreneurs) and government. Households are the owners and suppliers of factors of production in a market economy. Received from the sale of services labor, capital, etc. money goes to meet personal needs, not to build up profits. Within the household, the final products of the sphere of material production and the sphere of services are consumed.
A business is a business enterprise operating for the purpose of generating income (profit), involving an investment in equity or debt capital and being a supplier of goods and services.
The government is represented mainly by various budgetary organizations that carry out the functions of state regulation of the economy. In addition, it itself provides the market with goods and services of state-owned enterprises.
The same person can be in a household, business, and government agency. For example, when employed by a government official, he is a representative of a government organization; by owning the securities of a corporation, he represents a business; spending his income on personal consumption, he is a member of the household. All participants in market relations are real owners and have their own economic interests, which may coincide or contradict the interests of other subjects. Each of them occupies a certain place in the system of social division of labor and, in order to realize their economic interests, must offer what is needed by other subjects of market relations.
Objects of market relations are all that about which there is a relationship of purchase and sale. This includes material and intangible goods and services, factors of production - means of production, labor, capital (funds), technical innovations and ideas.
The market function means its role in realizing the economic goals of society.
The market has a huge impact on all aspects of economic life, performing a number of essential functions.
The most important function of the market is regulating... In market regulation, the ratio of supply and demand is of great importance, affecting prices. A rise in prices is a signal for the expansion of production, and a fall in prices is a signal for a reduction. The market tells producers what to produce, what goods and services to refuse from production, or to reduce the volume of their output. Equally valuable information is provided by the market and consumers, on the basis of which they constantly choose a way to satisfy their numerous needs. Through the market, buyers and sellers make economic choices about how to meet their needs. In modern conditions, the economy is controlled not only by the "invisible hand", about which A. Smith wrote, but also by state levers. However, the regulatory role of the market continues to persist, largely determining the balance of the economy. The market acts as a regulator of production, supply and demand. Through the mechanism of the law of value, demand and supply, the market establishes the necessary reproductive proportions in the economy. Market relations provide dynamic proportionality in the turnover between different regions and national economies. The development of the world market was the basis for the creation of the current international economic unions and integration groupings that unite a number of countries of the world economy.
The market fulfills stimulating function... By means of prices, it stimulates the development of the achievements of scientific and technological progress, reducing costs, improving the quality of goods and services and expanding their range.
The next function of the market is informational... The market is a rich source of information, knowledge, information required by business entities. It provides, in particular, objective information about the socially necessary quantity, range and quality of those goods and services that are supplied to the market. The availability of information allows each firm to constantly check its own production with the changing market conditions.
Intermediary function the market is that economically isolated producers in conditions of deep social division of labor must find each other and exchange the results of their activities. In a normal market economy with sufficiently developed competition, the consumer has the opportunity to choose the optimal supplier of products. At the same time, the seller is given the opportunity to choose the most suitable buyer.
The market fulfills sanitizing function, cleansing social production of economically weak, non-viable economic units, encouraging the development of efficient, entrepreneurial, promising firms.
The market makes it possible to solve such central problems of the economy as the standard of living, structure and efficiency of production.
The market allows the use of universal values. He himself is an achievement of world civilization. The market demonstrates its capabilities in developed countries, in developing countries, and regardless of national, ideological and other characteristics.
The mechanism of the market as a whole frees the economy from a shortage of goods and services. Both in theory and in practice, the market economy is predominantly deficit-free within the limits of the resources (including imports) that the country has at its disposal. The scarcity runs counter to the economic interests of market participants. Discrepancies between the appearance of a need and its satisfaction are possible. They are due to the scientific and technical potential available in society, the availability of resources, and are temporary.
On the market, the value is realized and the goods are brought to the consumer. It serves as a link between economically isolated commodity producers, as well as between production and consumption.
The market affects all phases of reproduction - production, distribution, exchange and consumption. By connecting producer and consumer, coordinating their activities, the market spontaneously ensures the continuity of the reproduction process. Through the market, huge flows of material resources, goods and services are directed from owners to consumers, and in exchange for them towards them, in monetary form, the funds necessary to continue the production process move.
By differentiating producers, providing the state with the best opportunities to achieve social justice in the national economy, which could not be achieved in conditions of total state control, the market fulfills social function.
The literature also distinguishes such market functions as the activation of economic interests, the stimulation of the efficiency of economic activity, the reduction of needs with production, the creation of conditions for effective cooperation of labor.
The basic principles of the functioning of a market economy are the following principles:
* freedom of economic, economic, entrepreneurial activity of an individual, social group;
* consumer primacy. A special kind of responsibility to the consumer appears, which dictates his will, desires, taste to the manufacturer;
* market pricing. The market price is formed as a result of bargaining between the seller and the buyer, the interaction of supply and demand;
* contractual relationship;
* competition;
* state regulation of the market and market relations. Government programs, taxation, financial and credit and banking systems act as market regulation instruments;
* openness of the economy. Business organizations and entrepreneurs have the right to carry out foreign economic operations subject to certain conditions and restrictions;
* ensuring social security of the population.
The principle of the universality of the market should be emphasized. Elements of the market and market relations always exist in a non-market, state, planned economy, in the same way, elements of state planning and regulation of state property, centralized leadership are certainly present in any purely market economy. However, the economy can be considered a market economy only if commodity-money relations become prevailing, penetrate into all spheres and sectors of the economy. This is the essence of the principle of universality, namely: the coverage by market relations of the entire variety of values created by nature and man.
For the normal functioning of the market, the following are necessary: 1) personalized property, when the commodity producer is the owner of the means of production and freely disposes of the results of his labor; 2) freedom of production and commercial activity of all participants in social production; 3) the presence of a solid, reputable currency; 4) a well-established system of credit and financial relations.
2.Cmarket structure and infrastructure
The structure of the market can be defined as the internal structure, location, order of individual elements of the market. The market covers elements directly dependent on the provision of production, as well as elements of material and monetary circulation. It is associated with both the non-productive sphere and the spiritual sphere. Accordingly, the market has a diverse structure.
According to the objects of exchange, there are markets for goods, services, capital, securities, labor, foreign exchange, the market for information and scientific and technical developments. In the context of the increasing involvement of scientific and technical achievements in the production process, the importance of the information market and scientific and technical developments is immeasurably increasing. Its components are the market of innovations, inventions; information product market (sphere of information services); the market for the product of creative labor (books, films, etc.).
Some economists, depending on the object of market relations, distinguish the following three groups of markets: commodity, financial and labor. In each of them, there are corresponding specialized markets. The first group includes the consumer market, the market for material resources, the market for industrial and technical goods, the information market and the market for scientific and technical developments; to the second - innovative, short-term loans, securities and foreign exchange markets; to the third - labor markets of different skill levels and markets for individual specialties.
In the spatial context, the local (local) market is distinguished, which is limited to one or several regions of the country; a national market covering the entire national territory; regional by country group; world, world market, including all countries of the world.
According to the mechanism of functioning, there are:
* free market, regulated on the basis of free competition of independent producers;
* a monopolized market, where the conditions of production and circulation are determined by a group of monopolies, between which monopolistic competition persists;
* a state-regulated market, where an important role belongs to the state, which uses economic instruments of influence.
Sometimes a planned-regulated market is also distinguished. Here the leading role in ensuring the basic proportions of production and circulation belongs to the plan; there is centralized planning and regulation of pricing, financial, credit and monetary circulation.
According to the mechanism of functioning, markets of perfect and imperfect competition are distinguished. The market of perfect competition is a self-regulating system of market relations. Markets of imperfect competition include monopolized and regulated markets.
In accordance with the current legislation, a legal, or official, market and an illegal, shadow market are distinguished.
According to the degree of saturation, an equilibrium market is distinguished, in which supply and demand approximately coincide; scarce market, where demand exceeds supply; excess market when supply exceeds demand.
Much is being done in Belarus to support entrepreneurship, small and medium-sized businesses, the development of financial leasing, and commodity markets. There are labor and securities markets and their regulation systems. An insurance market is being created. The real estate market is developing, conceptual and practical problems of the development of commodity markets are being solved, not only in general, but also in the context of their individual sectors, for example, markets for food products, fuel and energy, etc. standardization of goods and services; protection of the domestic market from substandard imports. Systems for the study and forecasting of commodity markets are being created based on the organization of problem-oriented statistical reporting.
Market infrastructure is a system of institutions and organizations that ensure the movement of goods and services on the market. There are other definitions of market infrastructure. It is defined as a complex of elements, institutions and activities that create organizational and economic conditions for the functioning of the market; as a set of institutions, organizations of government and commercial enterprises and services that ensure the normal functioning of the market; as a set of market institutions that serve and ensure the movement of goods and services, capital and labor.
The organizational base of the market infrastructure includes supply and sales, brokerage and other intermediary organizations, commercial firms of large industrial enterprises.
The material base consists of transport, banking and insurance systems, large independent banking and savings and credit institutions, as well as medium and small commercial banks of various volumes of operations.
The main elements of the market infrastructure. The most important elements of the market infrastructure are fairs, auctions, stock exchanges. Fair means: 1) a regular market, which is organized in a specific place; 2) a place of periodic trade; 3) seasonal sale of goods of one or more types. It originated in Europe in the early Middle Ages. At the beginning of the XX century. international fairs have been widely developed, where transactions are concluded on a national and international scale, in particular industry (usually technical) and consumer goods with symposia, congresses, seminars.
Auctions deal with products that are scarce on the market. The main guideline here is getting the maximum price for any product. The auction is a public sale of a product at a predetermined location. The goods sold go to the buyer who named the highest price. Distinguish between compulsory auctions, which are conducted by the judicial authorities in order to collect debts from non-payers, and voluntary auctions, which are organized at the initiative of the owners of the goods sold. To conduct auctions, special firms are created that work on a commission basis.
There are also international auctions. They are a kind of public open auction, where goods of a certain nomenclature are sold: wool, tobacco, furs, tea, horses, flowers, fish, timber, as well as luxury goods, works of art.
The exchange is a meeting place for buyers and sellers, a place where deals are made. Most exchanges are corporations. Only individuals can be members of the exchanges, and only persons who have the right to conclude contracts on the exchange can act from companies. The overwhelming part of exchange turnover is concentrated in the leading shopping and financial centers of the USA, Great Britain and Japan, which account for up to 98% of the volume of exchange transactions with goods in value terms (including the US share - 84%).
Distinguish between commodity exchanges, stock exchanges and labor exchanges.
Commodity exchanges operate on the markets for individual goods. Here, transactions for the sale of goods are carried out on the basis of preliminary inspection and according to samples and standards. By their nature, exchange transactions are of two types: 1) spot transactions are transactions for real goods. They provide guarantees for the sale of the product that is already in stock; 2) forward transactions, in which not the goods themselves are sold (they have not even been produced), but the right to receive them. A type of forward transactions are futures transactions. These are deals for the commodity of the future. However, in this transaction, the partners do not expect to transfer the goods being sold to each other. The purpose of a futures transaction is to obtain the difference in price for the period between the conclusion of the contract and its execution. On modern commodity futures exchanges, only 1 - 2% of transactions are concluded with the delivery of real goods. It is not the goods themselves, as such, that are sold and bought, but contracts for their supply.
In conditions of constant fluctuations in supply and demand, prices on the commodity exchange can change in a matter of minutes. By setting so-called forward prices, the commodity exchange provides producers and consumers with minimal price risk.
Commodity exchanges are also developing in Belarus. They began to function on April 1, 1991. However, in the classical sense, they are not exchanges, since a number of operations (for example, futures transactions) are not known to them.
On the commodity exchanges, on behalf of their clients, transactions are concluded by intermediaries - brokers. These can be both highly qualified specialists and brokerage firms registered on stock exchanges and representing the interests of their clients. The broker's source of income is the commission stipulated in the charter of the respective firm. The subjects of the commodity exchange are dealers - trading participants who carry out exchange transactions on their own behalf and at their own expense.
Mainly two types of securities are traded on the stock exchange: 1) shares of enterprises, companies, firms; 2) bonds issued by the government of the country, local governments, utilities, as well as private companies. The purchase and sale of securities on the stock exchange is based on their exchange rate, which fluctuates depending on the ratio between supply and demand. The real market prices for shares and bonds of certain companies are determined on the stock exchange. These prices depend on the level of the loan interest and the amount of dividends and interest paid to their holders.
Obtaining a high income (profit) on the stock exchange based on the exchange rate difference of securities in exchange practice is called exchange speculation. Market prices for securities are regularly updated taking into account changes in supply and demand, volume of orders and incoming financial information.
The largest stock exchanges in the world are stock exchanges in New York, London, Tokyo, Frankfurt am Main, Paris. In Belarus, the process of creating a stock exchange has just begun. It will receive its development with the further formation of the securities market and the privatization of state property.
The modern stock exchange is a super-powerful computer center that has operational communications almost all over the world. All transactions are entered into the memory of the machine, thanks to which market information is disseminated in a matter of seconds.
Labor exchange is an organization specializing in the performance of intermediary operations between entrepreneurs and workers for the purpose of buying and selling labor. It allows you to streamline the hiring of labor by enterprises and reduce the time for citizens to find a job.
In addition to employment activities, labor exchanges provide services to persons wishing to change jobs, study the demand and supply of labor, collect and disseminate information on the level of employment in relation to certain professions and regions. According to the existing laws of most countries, all vacancies at enterprises must be registered on local stock exchanges. Labor exchanges provide material support for workers in the event of involuntary unemployment. In the former USSR, the labor exchange existed until the 30s. and was closed in connection with the declaration on the complete elimination of unemployment in the USSR. In Russia she resumed her work, in Belarus the rights and opportunities of the unemployed are regulated by a system of legislative acts.
The credit system acts as an element of the market infrastructure. It includes banks, insurance companies, union foundations, and any other organization with the right to do business. The credit system includes everyone who is able to mobilize temporarily free funds, turn them into loans, and then into capital investments. The core of the credit system is the banking system. It includes central (state), commercial (accepting deposits and converting them into credit), mortgage (giving money secured by real estate), innovative (lending to the development of technological innovations) and investment (specializing in financing and long-term lending to various enterprises and the whole industries) banks.
The market infrastructure also includes public finance. They are based on central and local budgets. Through the state budget, there is a redistribution of income, financing of production and social programs. The financial system is built in accordance with the state structure and the Constitution of the country.
A number of links in the market infrastructure are intended to serve the market economy as a whole. These are legal and information services, consulting companies, etc.
An important part of the market infrastructure is a ramified system of legislation that regulates legal relationships between economic entities operating in the market.
WITHlist of used literature
1. Bazylev N.I., Gurko S.P. Economic theory. - Minsk: Interpressservice; Eco Perspective, 2001.
2. Lemeshevsky I.M. Economic theory. - Minsk: FUAinform, 2005.
3. Lobkovich E.I., Mutalimov M.G., Plotnitsky M.I. The course of economic theory. - Minsk: Book House; Misanta, 2005.
4. Lobkovich E.I. Economic theory. - Minsk: New knowledge, 2000.
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