THE INTERACTION OF STATE AND MARKET COORDINATION

Анотація

Any economic system is characteristed by a certain way of coordination of economic subjects' activities. These ways are usually market coordination based on demand, supply and equilibrium price interaction, and state coordination based on the mandatory functions of the state. Because the state is a part of political system, and market is a part of economic one, traditionally, economists claim that the state and market cannot coordinate in one model because they are different notions and principally incompatible. Therefore, market is considered to be the main coordinator of economic activities, while the state is a complementary one to resort when market is unable to fulfill its functions efficiently.
\nMethodological approach based on the opposition of economic and political spheres of social activities fails to make the basis for market-state interaction research. People's purposeful activities realized in economic, political and social spheres make the object of coordination. That's why its regulation is based on the interrelation between economy, politics and culture. The rules of market exchange are fixed through the complicated interaction of formal norms with non-formal ones derived from culture. The former are created by legislature and established by Constitution and institutions through the state political power. The state itself as the creator of formal rules in many spheres acts according to the market rules. This proves that market coordination is impossible without the state one, in the same way as the state coordination is impossible without the market one.
\nCivil society acts as an equal subject in coordination process, being an objective background for the development of favourable conditions for market and state coordination. This is the democracy under which the conditions for development and private property protection are formed, being essential conditions for personal freedom and market performance, as well as the opposition to usurpation of power by private interest groups. At the same time civil society cannot exist without a market that has many forms of ownership with private economic interests dominating and focusing their greatest potential on the creation of material component for its operation. At the same time civil society requires the state to be a legal guarantor of people's rights and freedoms. The state, in its turn, feels the need for civil society as the prerequisite of its advancement to democratic state. Therefore, the coordi­na­tion process in economic activities is realized through the mutual permeation of market, state and civil society forming nearly optimal symbiosis by creating and reproducing institutional conditions for their existence.

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