Practice how to deal with the relationship between market and government.

How to deal with the relationship between market and government

The relationship between government and market is an unavoidable worldwide problem in developing modern market economy, and it is also a core issue that must be further handled in deepening the reform of socialist market economy. The Central Committee's Decision on Deepening Reform in an All-round Way (hereinafter referred to as the "Decision") puts forward that letting the market play a decisive role in resource allocation and better play the role of the government is not only a high summary of China's reform and construction experience in the past few decades, but also points out the direction for further handling the relationship between the government and the market in the future.

First, what is the decisive role of the market in resource allocation, and why should the market play a decisive role in resource allocation?

These are two basic theoretical problems that must be clarified in dealing with the relationship between the government and the market. To answer these two questions, we must first understand what is resource allocation and what is market.

The so-called resource allocation refers to the distribution and use of various realistic resources among different sectors of society in the process of social production and reproduction. The goal of resource allocation is to form a coordinated proportion of socialized production demand and seek maximum benefits. The market has many meanings: first, the place for commodity exchange, second, the mechanism for allocating resources, and third, the production and exchange relationship between people. The market that makes the market play a decisive role in resource allocation does not refer to exchange places or production relations, but refers to the mechanism of resource allocation. Therefore, making the market play a decisive role in resource allocation, to be exact, making the market mechanism play a decisive role in resource allocation.

The market mechanism has three basic components: price mechanism, supply and demand mechanism and competition mechanism. The price mechanism is the most basic mechanism in the market mechanism. The rising price level not only stimulates the increase of supply, but also inhibits demand. If the price level drops, it will not only increase demand, but also reduce supply. Market price is determined by value, and its change is influenced by the relationship between supply and demand. Supply exceeds demand, prices fall, supply is less than demand, prices rise. In order to survive and develop, commodity producers must compete with each other and strive to improve technology, management and efficiency. In this way, the price mechanism, supply and demand mechanism and competition mechanism work together, which not only realizes the proportional allocation of resources, but also promotes the improvement of the efficiency of the whole resource allocation.

The role of market mechanism is the embodiment of the role of value law. Under the condition of market economy, there is an objective basic economic law that determines the allocation of resources, that is, the law of value. The basic requirement of the law of value is that the value of goods is determined by the socially necessary labor time for producing goods, and on this basis, the goods are exchanged for equal value. The "socially necessary labor time" in the law of value includes two meanings: the first meaning refers to "the labor time needed to create a certain use value under the existing normal social production conditions and the average social labor proficiency and labor intensity". Another meaning refers to the socially necessary labor time spent by the total social labor to produce a certain commodity according to a certain proportion. Therefore, there are two levels of resource allocation. One level is that resources are allocated in the same department, and the other level is that resources are allocated in all sectors of society. No matter what level of resource allocation, it is determined by the basic laws of market economy.

Emphasizing that the market plays a decisive role in resource allocation in deepening the reform and developing the socialist market economy is essentially emphasizing respect for the law of value and the role of market mechanism in resource allocation, which is conducive to establishing a correct view of the relationship between the government and the market, transforming the mode of economic development, improving the efficiency of resource allocation and transforming government functions.

Second, why should we give full play to the role of the government? How can we give full play to the role of the government?

Historically, western governments have had to intervene in the economy. In the development stage of free capitalism, the allocation of resources is completely determined by the law of value and market mechanism. The government is a "night watchman" and does not interfere in the economy. The first economic crisis of capitalism occurred in 1825, and then every few years. The global economic crisis of capitalism occurred in 1929- 1933. Practice shows that the market, especially under the capitalist system, is not omnipotent in determining the allocation of resources. Due to the spontaneity and ex post regulation of the market mechanism, it will also lead to imbalance in proportion and waste of resources, that is, market failure. So Keynesianism came into being in Britain, and Roosevelt's New Deal appeared in the United States, which began the theory and practice of government intervention in the economy, and thus began the debate on the relationship between government and market for more than 100 years.

In China, the choice of resource allocation mode once ignored the market and focused on the planned economy, which proved unsuccessful in practice. Since the reform and opening up, we have gradually attached importance to the decisive role of the market in resource allocation, and at the same time attached importance to the role of the government. A large number of facts have proved successful. Therefore, while making the market play a decisive role in resource allocation, it is a scientific proposition that has been tested and proved by practice, in addition to making up for the shortage of the market and giving full play to the role of the government.

More importantly, the market economy developed in China is a socialist market economy. In the socialist market economy, the government should not only give full play to its institutional advantages and provide due institutional, environmental and order guarantees for the development of the market economy, but also shoulder the heavy responsibility of realizing modernization centered on economic construction and the mission of seeking happiness for the people. Therefore, the role of the government is not a question of whether to give full play to it, but should leave the management of the market to the market and concentrate on doing things that are beneficial to China's modernization and the people.

As the main organization of macroeconomic management and regulation, the responsibilities and functions of the government are mainly:

First, maintain macroeconomic stability and make up for market failures. The government should strengthen the formulation and implementation of development strategies, plans, policies and standards, at the same time formulate and implement macro policies including fiscal policy, monetary policy and industrial policy, maintain the balance of economic aggregate, promote the coordination of major economic structures and the optimization of productivity layout, slow down the impact of economic cycle fluctuations, guard against regional and systemic risks, stabilize market expectations, make up for market failures, and realize the healthy development of the national economy.

Second, strengthen market supervision and maintain market order. The government should improve the legal system, strengthen market supervision, standardize the behaviors of various economic entities, limit all kinds of unfair competition behaviors, create an open, fair and just competition environment, and maintain the normal market order.

Third, protect resources and environment and promote sustainable development. The government strengthens market access standards such as energy, soil and water conservation, environment, technology and safety, establishes and improves a long-term mechanism to prevent and resolve overcapacity, protects land resources, controls population growth, and provides efficient services and guarantees for promoting sustainable economic and social development.

Fourth, strengthen and optimize public services to promote prosperity. The government provides perfect laws, regulations and basic institutional rules, laying the basic premise for the smooth operation of the market economy; Providing construction and investment for roads, transportation, public health and compulsory education; Provide good public security and social order, carry out national defense construction, safeguard territorial integrity and sovereign independence, and create a peaceful and stable environment conducive to national economic development; Protect the legitimate property rights of all kinds of property owners, adjust the income distribution, and achieve the purpose of developing the economy and achieving prosperity.

Third, when dealing with the relationship between the government and the market, we should focus on deepening reform.

First, focus on making the market play a decisive role in resource allocation, deepen the reform of the market mechanism, and accelerate the improvement of the modern market system. We will deepen price reform and improve the mechanism that prices are mainly determined by the market and the mechanism of supply and demand. Leave whatever the market can decide to the market, and the government should not interfere improperly. Important public utilities, public welfare services and network-based natural monopoly links that need government pricing should be more transparent and accept social supervision; Improve the market-oriented exit mechanism of survival of the fittest, improve the bankruptcy system of enterprises, maintain a fair, just and equal competition order, and improve the competition mechanism. Further improve all kinds of factor markets, establish a unified urban and rural construction land market, improve the financial market system, improve the marketization mechanism of technological innovation, establish fair, open and transparent market rules, and accelerate the formation of a modern market system with independent operation of enterprises, fair competition, free choice of consumers, independent consumption, free flow of goods and factors and equal exchange.

The second is to transform government functions and strengthen government governance reform. It is necessary to implement the "Decision" and realize the separation of government from enterprises, so that the functions of professional economic management departments that mainly manage enterprises can be transferred to formulating industry plans and policies, conducting industry management, and guiding product structure adjustment, instead of directly managing enterprises; At the same time, we will further promote the separation of government and capital, government and society, and build a service-oriented government with scientific functions, optimized structure, honesty and efficiency, and people's satisfaction. Deepen the reform of the administrative examination and approval system, further simplify administration and decentralize power, minimize the central government's management of micro-affairs, and cancel all economic activities that can be effectively regulated by the market mechanism and return to the market. Standardize the management of reserved administrative examination and approval items and improve efficiency; Economic and social issues that are directly oriented to the grassroots, large in quantity and wide in scope, and more convenient and effective by local management are all decentralized to local and grassroots management. Strengthen the central government's macro-control responsibility and ability, and strengthen the responsibilities of local governments in public services, market supervision, social management and environmental protection. It is necessary to optimize the establishment of government institutions, functional allocation and workflow, and improve the administrative operation mechanism in which decision-making power, executive power and supervision power are mutually restricted and coordinated. Strict performance management, highlighting the implementation of responsibilities, and ensuring the consistency of powers and responsibilities. It is necessary to straighten out the relationship between departmental responsibilities and actively and steadily implement the large-scale system. Optimize the setting of administrative divisions and explore and promote the reform of county (city) system where conditions permit. Strictly control the organization establishment, and promote the scientific, standardized and legalized organization establishment management.