Forms of Ownership

Now lets turn the important question: which of the considered forms of ownership is better? Usually this question is in

Forms of Ownership

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m of a dilemma: public or private property? In fact, such an alternative formulation of the question is counterproductive. It should go about finding the most rational, optimal combination of both forms. Criterion for evaluation can be only one: what kind of property in a given historical moment and in longer term, offers higher level needs satisfaction of the population, while taking into account the indicators of life quality. From the combination of these criteria, preference should be given to private property, which is now the core of the developed market economies of the West. To create just such an economic system, developing and former socialist countries are striving. It contains the profit motive and competition, the realization of which brings the highest economic efficiency and better meets the needs. However, private ownership has its drawbacks, especially regarding employment and unemployment. After all, the profit motive and competition is forcing businesses constantly to seek perhaps a greater reduction in production costs, including economy in labor force. In Western countries, a wave of privatization in the 80's, the first half of the 90's led to a reduction in the proportion of state ownership in the production of GDP from 9 am to 7% on average, that means overcoming the legacy of the prewar and early postwar years. In the 30-ies state's direct participation in the economy expanded in the process of overcoming the deepest crisis in the history of capitalism of 1929 - 1933 years. State ownership in the prewar years in most Western countries was significantly strengthened as a sort of "backup" of private enterprises, that had revealed the sequential weaknesses, and as an instrument of maintaining the strength of the social system. In the late 40's - 50's in Western Europe and Japan, private capital was temporarily weakened by war damage and certain other circumstances. Such a gap as a need occurred was filled by the state, what is now not necessary.

The potential for further privatization in the Western countries has largely been exhausted. The state share in it, at least in the medium term, will remain approximately at current levels with slight changes in some countries. However, in some cases to deal with the possible appearance of unemployment, in labor-intensive industries (especially in infrastructure) new enterprises can be created through public investment. Programs of Western social democracy, which came in power recent years, in several countries, including France, Britain, Germany and Italy, provide for such measures. In developing countries in the same period, the mentioned rate remained at 11%. On one hand, this was due to the influx of foreign private investment, through which the creation of new private enterprises was possible. On the other hand, the weakness of national private capital forced the state to maintain a relatively high level of its presence in the economy. As in the medium term, we can not expect a massive increase in inflows of direct investment from Western countries, as well as other reasons, the current figure is unlikely to change significantly in the foreseeable future.

Former socialist countries have embarked on the transition from planned to market economy mainly at the turn of the 80's and 90's. Market transformation, of course, first of all requires displacement of state ownership with private through privatization and the creation of new private enterprises. In this regard countries with economies in transition since the early 90's had already passed (each in varying degrees) a significant segment of the path. However, the share of government property in the production of the GDP of these countries, on average, still accounts for 20 - 30% or more, i.e., noticeably exceeds the corresponding figure for developed and developing countries.


CHAPTER 3. Change of ownership


3.1 Change of ownership is an essential condition for the formation of the market


For the successful development of the property it is necessary to satisfy many economic and social conditions, in particular, it requires a review of the relationship to the property in the new economic conditions.

Modern economics today anew considers many of the processes occurring in our society. This applies to issues of ownership, the ratio of plan and market methods to regulate economic activity, direct and indirect methods of management of public processes.

With the democratization of our society motives of transition to a market economy appeared, therefore, attempts were made to implement this goal, sometimes not very successful, but, in our opinion, worthy of consideration, since it is with them that a slow and painful break-up of our old economic stereotypes began.

Adjustment period was marked by increasing attention to the plight of the Soviet people. Nevertheless, the essence of economics lies in the fact that the sympathy and desire to help taken separately here do not decide anything. For us to live better, we must produce more goods and services of high quality. Unfortunately, we still have not mastered this art. But the government performed an active social policy through increased emissions, but if adequate quantities of goods are not produced for this money, then it does not increase the standard of living, but increases queues, shortages and profiteering, as observed in the early stages of transition to a market economy.

We believe that for the transition to a market we need, above all, in general terms, be aware of something that moves our society: what the modern market is.

Having decided to build a market economy, we must, above all, create its image, to see at least the outlines, to assimilate the essence of market relations. However, there are several reasons that prevent deep perception and understanding of the market for a Soviet man.

First, we have seen and known a true market economy in all its many manifestations, almost never. If anyone was in the countries of the free market, then he or she saw only of its appearance, without delving into the essence of the internal mechanisms of market relations.

Secondly, we are not taught the market economy. In schools, colleges, institutes, radio and television, we were told that overseas was decaying crisis economy with exploitation and enslavement of the working people. Textbooks containing the true description of the market and the market economy, the works of so-called bourgeois economists were either not translated or published or became known only to a narrow circle of specialists.

Third, those natural associations of the word "market", which occur in each of us in one way or another, are connected with the collective farm market, i.e. with market forms that existed in the Soviet economy. But these analogies are very far from real civilization of the modern market and, hence, give rise to a distorted view of true market economy.

The terms "market" and "market economy" in our country are usually treated only as an exchange of commodities and commodity-money relations, in other words, as trade, exchange, but such representation is primitive.

The market is a whole system of diverse economic relations between people, resulting in the production, distribution, exchange and consumption, based on certain principles, the main among which is freedom of economic activity.

The main property of market-oriented economy is to promote market relations in all economic spheres, their penetration into all sectors, and coverage of all regions of the country. This property can be called the universality of market relations.


3.2 Ownership in transition economies


Transformation of ownership - from monopoly to pluralism forms

Changes in property relations have become mainstays of economic reforms in the former Soviet republics. In the theoretical plan transformation of the property required to address: to what level the proportion of state ownership should decrease, at what pace and what way it goes lower, to whom public ownership should transit.

In Kazakhstan and other CIS countries embarked on the transition to a system, combining private (individual and group), public and mixed ownership of the means of production. This is logical interfaces with the course of the transition to the market. Since the market supposes freedom of industrial and commercial activities, competition between manufacturers, then domination of any one form of ownership must be overcome. It should be replaced by complementing each other various forms of ownership, each of which would be best adapted to the specific field of economy, to economic activity.

State property in the transition

The peculiarity of the relations between subjects and objects of ownership at the state level are due to the following circumstances:

The results of the management of state property affect the fate of many people, determining their standard of living, social security, health, intellectual development, security and many other recognized human values;

state property are distinguished by great variety of institutional and legal diversity, covers a wide range of national economy sectors and are intended for use in a variety of directions;

The implementation of State's right to property objects is achieved through the system of state property management, which is a three-tier hierarchical structure. Public ownership is likely to retain its relevance and function of the foundation of the entire economic chain. Privatization process, leading to the expansion of individual and group ownership, does not mean that state ownership will be fully uninstalled. There

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