Preliminary communication
State and market
Ivan Ferenčak
; Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek, Osijek, Croatia
Boris Crnković
; Josip Juraj Strossmayer University of Osijek, Faculty of Economics in Osijek, Osijek, Croatia
Stjepan Rudan
orcid.org/0000-0001-7865-0415
; Josip Juraj Strossmayer University of Osijek Faculty of Medicine Osijek, Osijek, Croatia
Abstract
The debate about the relationship between state and market, about their relative importance, does not cease to be topical, and there is no end of it in sight. The market (invisible hand) does need, more or less, the help of the state (visible) hand. Liberal sympathizers of the market prefer a “small” state whose ambitions include only providing an adaptable legal framework in which and by which the market functions, and (re) allocation of resources, because of the inherent defects of the market. Proponents of welfare economics will wish for progressive taxation and redistribution of income. Keynes’s mission to save capitalism meant an increase in the importance of the state and appearance of a new, stabilizing role of the state. Excessive unemployment is to be prevented by fine-tuning. Unfortunately, Keynes’s critics from the public choice camp will say that the state (government) is not perfect, and, as a rule, falls into the trap of asymmetry. Only and solely in theory will it apply that a perfect state means perfect functioning of an imperfect market.
Keywords
state; market; mercantilism; physiocracy; classical economics; welfare economics; economics of demand; monetarism; theory of public choice; Harvey Road mentality
Hrčak ID:
127785
URI
Publication date:
3.10.2014.
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