The perfection of government intervention is only related to the "ideal government". In other words, market regulation and government intervention are not omnipotent, both of which have inherent defects and the objective possibility of failure. The key is to seek the best combination of market mechanism and government regulation in economic and social development, so that government intervention can avoid and overcome government failure while correcting and correcting market failure, which is undoubtedly of great theoretical and practical significance for the establishment and improvement of China's socialist market economic system.
First of all, market failure makes it necessary for the government to actively intervene.
The actual course of market economy and the evolution track of government functions in western developed countries and some post-modern countries show that the "invisible hand" of market regulation has both its ability and its powerlessness. On the one hand, market economy is by far the most efficient and dynamic economic operation mechanism and resource allocation means for human beings, and it has irreplaceable functional advantages as follows: ~ is the stimulation of economic interests. Interest-driven and free competition of market players form a powerful driving force, which greatly mobilizes people's enthusiasm and creativity, promotes the continuous innovation of production technology, production organization and product structure, and improves the efficiency of resource allocation. The second is the flexibility of market decision. In the market economy, the decentralized decision-making structure of producers and consumers, as microeconomic entities, can respond to changes in supply and demand flexibly and effectively in time, realize the balance between supply and demand quickly, reduce waste of resources and improve decision-making efficiency. The third is the effectiveness of market information. The effective allocation of resources requires making full use of all kinds of information in the economy. The information structure with the price system as the main content can enable every participant in economic activities to obtain simple, clear and efficient information and make full and effective use of it, thus contributing to improving the rationality of resource allocation. In addition, the benign operation of the market economy is also conducive to avoiding and reducing inefficiency and corruption under direct administrative control. On the other hand, however, market economy also has its limitations, and its functional defects are inherent. It is difficult to overcome by the market itself. Giving up government intervention in market supervision completely will do more harm than good, leading to "market failure". Therefore, it is necessary to use the power above the market-the "visible hand" of the government to correct the market failure.
(-) The market cannot maintain the comprehensive balance and stable and coordinated development of the national economy.
The economic equilibrium achieved by market regulation is a kind of equilibrium of post-adjustment and decentralized decision-making. It often has a considerable degree of spontaneity and blindness, resulting in cyclical fluctuations in the economy and imbalance in the total economic output. Typical "cobweb fluctuation" will occur in food production, animal husbandry and other industrial sectors with long production cycle. In addition, in the market economy, individual rational choice can effectively regulate the supply and demand relationship of a single industry and market, but the comprehensive effect of individual rational choice may lead to collective irrational behavior. For example, when the economy is expanding, as a rational individual, he will naturally make a rational choice-increase spending to buy goods, and the effect of everyone's rational choice is collective irrational choice.
-maintaining or even aggravating inflation; Similarly, when the economy is depressed, individual's rational choice-reducing expenditure will lead to collective irrational behavior-maintains or even aggravates the economic depression. Furthermore, in the fierce competition, in order to maximize profits, market players often invest their funds in industries with short cycle, quick results and low risks, resulting in unreasonable industrial structure. This requires the government to use policies and measures such as planning, finance, currency, credit, exchange rate, preferential treatment and sanctions. Economic leverage and legal means, especially the macro-control policy of "discretion", change the variables and parameters of market operation in time to reduce the amplitude and frequency of economic fluctuations. At the same time, by formulating development strategies, development plans and industrial policies, we will guide the rational distribution of productive forces, optimize the industrial structure, and maintain macroeconomic stability and economic aggregate balance.
(B) laissez-faire market competition will eventually lead to its own opposite-monopoly.
Because the marginal cost of production determines the market price, the level of production cost makes the market players in different positions in the market competition, which leads to some enterprises in favorable positions gradually occupying monopoly positions. At the same time, in order to obtain economies of scale, some market players often monopolize the market by means of combination, merger and merger, which leads to the distortion of the market competition mechanism and prevents it from exerting its spontaneous and effective regulation function. The "Pareto optimality" under the condition of perfect competition, that is, the optimization of resource allocation, becomes a pure hypothesis, so monopoly is regarded as the "Achilles problem" of market economy. This requires the government, as a public welfare person, to properly guide and restrict the competition of market players, such as enacting anti-monopoly law or anti-monopoly law, price control and controlling the degree of monopoly. In this regard, the experience and lessons of western developed countries in the past century can be used for reference. For China, where the market order is not perfect and there are still some traces of administrative monopoly in the transitional economic system, the government has a more important responsibility in promoting market development and establishing fair competition procedures in the market. This is manifested in the fact that the government should establish and improve the normative system and policy framework of fair competition as soon as possible based on institutional innovation, and formulate national anti-monopoly laws (several local anti-monopoly laws have been formulated in Beijing and Shanghai recently) to match the already implemented People's Republic of China (PRC) Anti-Unfair Competition Law, so as to prevent possible and contain various forms of monopoly that have already appeared.
(C) the market mechanism can not compensate and correct external economic effects
According to economists Berg and Fisher, the so-called externality refers to "a single production decision or consumption decision directly affects the production or consumption of others, and its process does not go through the market". In other words, the external effect is an objective existence independent of the market mechanism, which cannot be weakened or eliminated automatically through the market mechanism, and often needs correction and compensation from forces outside the market mechanism. Obviously, the external effect of economy means that some market subjects can get the external economy for free, while some subjects suffer from the external diseconomy for free. The former is a common phenomenon of "hitchhiking" in economic life, that is, public products such as public education, public infrastructure and national defense construction are consumed without sharing their costs, while the latter, such as pollutants emitted by factories, will cause losses to nearby residents or enterprises, plunder natural resources, seriously damage the ecological environment, and widespread smoking can be seen everywhere. This kind of external effect and free riding can't be expressed by market price, and of course it can't be corrected by market exchange. Although it can be weakened by ideological belief and moral education, its function is limited after all. Only through national tax or subsidy policies or administrative control, such as specific pollution discharge standards, collection of pollution fees, prohibition of smoking in public places, etc., can we internalize external effects, minimize external effects in the process of economic development and marketization, and protect natural resources and ecological environment.
(D) the market mechanism can not organize and realize the supply of public goods.
The so-called public goods refer to those products and services that can be enjoyed by many people at the same time, and the supply cost and enjoyment effect do not change with the change of the number of users, such as public facilities, environmental protection, culture, science and education, medicine and health, etc. Diplomacy, national defense, etc. It is precisely because of the non-exclusive and non-confrontational characteristics of public products that one person's consumption of public products will not lead to the reduction of other people's products, so as long as there are public products, everyone can consume them. On the one hand, the supply of public goods certainly needs costs, and the costs should be shared by the beneficiaries, but
On the other hand, "once produced, producers can't decide who will get it", that is to say, once the supply of public goods is formed, consumers who don't pay for it can't be ruled out, so there will inevitably be "free riders" outside the economy mentioned above. What's more, if this happens, everyone wants others to provide public goods and enjoy success, and the result is likely to be that no one will provide public goods. Without necessary public goods, it is impossible to meet the objective needs of social economy and greatly reduce the efficiency of social resource allocation. This requires the government as a social manager to organize and realize the supply of public goods and supervise their use.
(E) The market distribution mechanism will lead to unfair income distribution and polarization between the rich and the poor.
Generally speaking, the market can promote the improvement of economic efficiency and the development of productive forces, but it cannot automatically bring about the balance and justice of social distribution structure. However, due to the uneven development of various regions, departments (industries) and units, as well as the different natural endowments, educational quality and social conditions, the market distribution mechanism that pursues the principle of equal exchange and fair competition leads to the differences in their income levels, resulting in de facto inequality. However, the competition law often has the "Matthew effect" that the stronger the strong, the weaker the weak and the more concentrated the wealth, which leads to the widening gap between the rich and the poor and between developed and backward areas. In addition, market regulation itself cannot guarantee full employment, and unemployment has aggravated the disparity between the rich and the poor, which is a great contribution to sustained economic growth: a few super-rich people control the economic lifeline; Potential capital outflow; Many poor people lead to insufficient social consumption, and the market is difficult to develop. More seriously, excessive polarization between the rich and the poor "not only weakens social cohesion, but also breeds injustice, thus inevitably undermining the political ties that maintain society." People ... in turn may require drastic political, social and economic changes. " Some ethnic minority areas with relatively backward economy and low income may also intensify ethnic conflicts.
(6) The market can't define the property rights and interests boundaries of market subjects spontaneously and realize economic order.
In market economic activities, the realization of various economic behaviors and goals of market subjects such as individual enterprises is of course dominated by various market variables (raw material cost, price, available labor force, supply and demand, etc.). ), and these variables are spontaneously formed by their unique laws (that is, the inherent requirements of the development of market economy, that is, Adam Smith's "invisible hand"), which are formed through a series of markets such as independent will, free choice, equality and mutual benefit. ) adjust your behavior and realize a certain degree of economic order spontaneously; However, as economic people, market subjects aiming at maximizing their own interests always compete in close, extensive, complex and meticulous economic ties, resulting in conflicts and contradictions of interests. Whether the parties themselves and the market itself have a mechanism to divide the property rights and interests of market subjects, let alone the ability to solve contradictions. This requires the government backed by social public power to act as an arbitrator and set up a "game plan" that embodies and guarantees market principles, that is, to clearly define and protect the rights of different stakeholders in property rights relations in the form of policies or laws to ensure the efficiency and fairness of market transactions. Furthermore, the cruelty of market competition in which the superior and the inferior are eliminated can easily induce people to take risks, resulting in criminal acts that illegally infringe upon the rights and interests of others and disrupt the social and economic life order. In this regard, market players are powerless. Only when the government is backed by state violence can we prevent and crack down.
Illegal and criminal acts in the economic field, such as preventing the occurrence of economic illegal crimes through qualification identification and administrative licensing system, severely investigating and punishing economic illegal and criminal acts according to law, and ensuring that the basic order of market mechanism operation and the legitimate rights and interests of market subjects are not infringed. In addition, in formulating appropriate foreign policies, striving for a peaceful international environment conducive to economic development, opening the domestic commodity market and attracting foreign investment, and protecting the overall and long-term economic interests of the country, the government undoubtedly has functions that the market cannot bear but are necessary for the sound operation of the modern market economy.
The defects and failures of the above-mentioned market regulation mechanism leave room for the government to intervene in economic activities. Because of this, the government's macro-control of the economy has become an organic part of the modern market economy system. As Samuelson, a famous economist and Nobel laureate in economics, said; "Today, nothing can replace the market to organize a complex large economy. The problem is that the market has neither heart nor brain. It has no conscience, no thoughts and no scruples. Therefore ... it is necessary for the government to formulate policies to correct some economic defects brought about by the market. " Therefore, "the modern economy is a mixture of the visible hand of the market and the government's taxation, expenditure and supervision".
Second, government failure determines that government intervention must be moderate and effective.
Market failure provides a basic basis for government intervention. However, government intervention is not omnipotent, and there is also the possibility of "government failure". In the words of Linde blom, the government "has a thick thumb and no other fingers". On the one hand, the government's failure is manifested in the weak government intervention, that is, the scope and intensity of the government's macro-control are insufficient or the way is improperly selected, which cannot make up for the reasonable need of "market failure" to maintain the normal operation of the market mechanism. For example, the protection of ecological environment is weak, laws, regulations and measures to protect fair competition are lacking, infrastructure and public products are insufficient, policy tools are improperly selected, and administrative coercive means cannot be used correctly. Therefore, market failure cannot be compensated and corrected. On the other hand, it is manifested as excessive government intervention, that is, the scope and intensity of government intervention exceed the reasonable need to make up for "market failure" and maintain the normal operation of the market mechanism, or the direction of intervention is wrong and the form is improperly selected, such as unreasonable restrictive rules and regulations are too detailed, the proportion of public products is too large, and public facilities are too advanced; Improper selection and collocation of various policy tools and excessive use of administrative coercive means to interfere with the internal operation order of the market will not correct the market failure, but will inhibit the normal operation of the market mechanism.
So, why did government intervention fail? Or, what is the root cause of government failure?
(A) the impartiality of government intervention is not inevitable. The prerequisite of government intervention is that, as the embodiment of social public interests, it should regulate and control the market operation fairly. Does the School of Public Choice regard government officials as Adam? Smith's hypothesis of "economic man" is biased, but the government in reality is not always so noble. The so-called "internalization" phenomenon of government agencies pursuing internal self-interest rather than public interest is vividly manifested in the "Jinyuan" politics of capitalist countries. In socialist countries, theoretically, the possibility of "internal effects" of government agencies cannot be completely ruled out. In fact, corruption of a few government officials occurs from time to time. This "internal effect" of government departments pursuing their own interests will inevitably greatly affect the optimization of resource allocation under government intervention. Just as external effect is the cause of market failure, "internal effect" is an important source of municipal government failure.
(2) The efficiency of some government interventions is relatively low. Different from the market mechanism, government intervention is first of all public and does not aim at direct profit. In order to make up for the market failure, the government often directly intervenes in public goods with large investment and slow return, and their supply generally has the characteristics of non-price, that is, the government can not directly charge the supply object through the exchange of clearly marked prices, but mainly relies on financial expenditure to maintain its production and operation, so it is difficult to care about its cost, so it lacks the direct interest drive to reduce costs and improve efficiency.
Secondly, government intervention is monopolistic. The government's "monopoly supplier status of some urgently needed public goods (such as national defense, police, fire protection, highways)" determines that only the government has the function and power to intervene or adjust the overall operation of the market from the outside. This kind of monopoly without competition can easily make the government lose its pursuit of efficiency and benefit. Finally, government intervention needs a high degree of coordination. The organizational system of government supervision consists of many government agencies or departments. The division of power, coordination and departmental views between these institutions and departments will affect the operational efficiency of the supervision system.
(3) government intervention is likely to lead to the expansion of government scale. The government should undertake the intervention function of market economy activities, including organizing the supply of public goods and maintaining social and economic order. , naturally need the corresponding institutions and personnel to perform this function. Adolf, a professor at the University of Berlin? As early as the19th century, Wagner put forward that the government has a natural tendency to expand, especially the number and importance of public departments that intervene in social and economic activities, which was called "Wagner's law of increasing public activities" by western economists. This internal expansion of the government is more in line with the growing demand for public goods, which can easily lead to the expansion and strengthening of government intervention functions and the growth of institutions and personnel, leading to the increasing budget scale and fiscal deficit, which has become an expensive cost of government intervention.
(D) Government intervention provides the possibility for rent-seeking behavior. Rent-seeking is an unproductive activity that individuals or groups exert influence on the government's decision-making or government in order to strive for their own economic interests (that is, not to increase any social wealth and welfare). For example, enterprises seek preferential treatment from the government through legal, especially illegal forms, obtain government preferential treatment or other political asylum by seeking to change the existing intervention policies of the government, and monopolize the use of some scarce materials in the market. In this case, the government officials in power are likely to "be lured by illegally provided money or other remuneration and act in favor of those who provide remuneration, thus harming the public and public interests". It can be seen that rent-seeking is possible because of government intervention (government intervention is therefore called "the mother's belly of rent"), and excessive intervention, lack of regulation and supervision, will inevitably become a reality. Its main harm lies in "not only making the motivation of producers and operators to improve economic efficiency disappear, but also easily causing a lot of resources of the whole economy to be spent on rent-seeking activities, increasing transaction costs in the economy through bribery and sectarian activities." Therefore, it has become an important source of the failure of government intervention.
(5) Government failure often stems from the mistakes in government decision-making. Government intervention in social and economic activities is actually a broad and complicated decision-making process (or the formulation and implementation of public policies). The correct decision must be based on sufficient and reliable information. However, because this kind of information is generated and disseminated among many scattered individual actors, it is difficult for the government to fully own this information. In addition, the complexity and variability of modern socialized market economy activities increase the difficulty for the government to fully grasp, analyze and process information. This situation will easily lead to mistakes in government decision-making, and will inevitably have an irreversible negative impact on the operation of the market economy. Correct decision-making also requires decision-makers to have higher quality. When the government carries out macro-control, it must formulate control policies and take necessary measures based on the accurate judgment of market operation, which is quite difficult in practice. Even if the judgment is accurate and the policy tools are properly selected and matched, it is difficult to determine the top strength. However, insufficient pre-planning and excessive intervention will cause "government failure". In reality, many government officials do not have the above-mentioned decision-making quality and ability, which will inevitably affect the efficiency and effect of the government in advance.
It is precisely because of the above defects that government intervention has become the dominant force to replace the market, and the result can only lead to "government failure." Using a "failed government" to intervene in a "failed market" is bound to add insult to injury and make the failed market fail further. However, the objective market failure needs the active intervention of the government. A "negative" government like a "night watchman" will not help the market failure, and it will also cause government failure. Therefore, the government's non-intervention or weak intervention and excessive pre-intervention are all abandoned. A realistic and reasonable relationship between the government and the market should be based on the premise of ensuring that the market plays a fundamental role in resource allocation, making up for the short of market regulation with the long of government intervention, and overcoming the short of government intervention with the long of market regulation, so as to realize the optimal combination of market regulation and government intervention, which is the "convex combination" advocated by economists. Therefore, it is necessary for the government to eliminate the root cause of government failure to the maximum extent, and take practical measures against two aspects of government failure (such as determining the general idea of two-way reconstruction of economic functions of the government with China characteristics; Starting with straightening out the relationship between government interests, we can ensure the fairness and detachment of government intervention; Standardize the pre-function and behavior of the government; Strengthen the supervision of government supervision; Improve the scientific degree of government decision-making; We should introduce competition mechanism in some areas regulated by the government, and so on. ), while overcoming and correcting market failures, we should also prevent and correct government failures.