STATE VS MARKET

INTRODUCTION

State versus market is a debate of deciding whether government should interfere in market function or not? in other words, it discuss the need of socialisation and privatisation, in this article we will be discussing the advantages and disadvantages of both, which will help in building up an unbiased perspective for the same.

the discussion of governmental intervention in the market begins with the "Classical Theory Of Employment" , This theory says that, there is no need of governmental intervention in the market because it's function depends on the demand and supply for the commodities and services. Later, in 1929 THE GREAT DEPRESSION occurred in US economy it keynes theory proved that government plays an important role of balancing the economy. unlike private enterprises government's spending is welfare oriented.

MARKET ECONOMY: ADVANTAGES & DISADVANTAGES

ADVANTAGES:-

• More innovations.
• Increase in efficiency
• production
• Good infrastructure

DISADVANTAGES:-

• Does not focuses on development but growth.
• Unequal distribution of GDP.
• No responsibility towards environment.
• Increase in negative externalities.
• Exploitation of natural & human resources.
• No sustainable development.
• Monopoly market.
• Lack of employment for unskilled labours.
• No welfare programme for poor.

SOCIAL ECONOMY: ADVANTAGES & DISADVANTAGES

ADVANTAGES:-

• Public welfare policies.
• Employment for unskilled labours (MANREGA)
• Protection of human rights (LABOUR LAWS & FUNDAMENTAL RIGHTS)
• Safe environment & health care (HOSPITALS/ SAVE WATER SAVE LIFE)
• Taxation policies.
• General economic fairness (MSP)

DISADVANTAGES:-

• Higher taxation
• Market failure because of new government policies.
• Economic disruption (INFLATION)
• Less choices in the market.

CONCLUSION

In conclusion, it can be said that both privatisation and socialisation have it's own pros and cons in order to avoid maximum disadvantages one should have mixed economy which comprises of the combination of state and market economy.

Along with this there must be clear limitations to their intervention in the economy that would help to prevent it from market failure. this will lead an economy towards development.

DEVELOPMENT = GROWTH + ENVIRONMENT AND HUMAN WELFARE