The decline of social democracy in Europe during the last decade is one of the examples which seem to show that there is no other global alternative for a state regulation under the market in the globalisation context. The predominance of the market in a political economy is not recent. Adam smith and the classics, with the concept of minimal state have always been much debated because of the standardized normative definition of wealth. Does the wealth of a nation mean economic growth or in contrary the development of infrastructures like an efficient education, health, or transport system? The fall of the communist bloc at the beginning of the 90s has shown that only the market economy can provide the necessary economic growth for the development of national wealth. Nevertheless it still appears that the market needs at least a basic state regulation in order to guarantee a fair competition in a reasonable social context. Consequently how to promote the economic growth that needs market efficiency and also the necessary state regulations for sharing and protecting the wealth of the nations?
The current relationship between the state and the market appears as a consequence of an extensive historical collection, opposing theoretical, critical and empirical assumptions of the economic and social matters. As a result of this process the state in an ever open context, tries to adapt its political responses to the global market challenge for promoting the wealth of nations.
[...] Instead of letting a free regulation in the market, the state plays its role, it organizes a protectionist policy against the capital flight. It controls the banks in order to plan strategic investments and will create monopolies for promoting scales of economies.Thanks to this organization the state will plan the public and private investment in order to develop basic goods industry, electronics, electrical machinery and heavy industry. This step creates a national demand along with the incomes in investment. In order to reduce importations the state tries to develop “import substitution activities” and promotes engineering education. Then the state has used the taxation of the new middle class for investing new technologies, chemicals in order to reduce any dependency on other countries. [...]
[...] See the article Phillips A W relation between unemployment and nominal income growth in United Kingdom between 1857-1957” and the critic analysis of Friedman, Milton. (1968) Inflation et systèmes monétaires. Paris Calmann –Lévy (1976) If the importations increase, the GDP decreases, see note n°17. The Laffer's curve analyses the result of taxation in function of the taxation rate. Arthur Laffer was a famous economic policy advisor of Ronald Reagan. Barro, R. (1978) The impact of social security on private saving. [...]
[...] Chap liberal tradition” Chap 5 “Enter Mr Keynes” chap 6 “Time and money” Chap 8 role of the state”. Hutton, W (1995) The state we are in. London John Cape. Introduction, Why inequality doesn't work? p 169-193 Why Keynesian economics is best? p 257-285. Hutton, W (2002) The world we are in. London Little Brown. Jones, B (2001) The Routledge Encyclopaedia of International political economy. London Routledge Keynes, J-M. (1936) The General Theory of Employment, Interest and Money 1978 Macmillan. [...]
[...] Smith, Adam, (1776) The wealth of Nations ,chap 4 exclusives privileges of corporations, statutes of apprenticeship, and all those laws which restrain, in particular employments, the competition to a smaller number than might otherwise go into them are a sort of enlarged monopolies”. Albert, Michel (1991) Capitalism against Capitalism Le Seuil, Conclusion, p252. Schumpeter, J-A (1942) Capitalism, Socialism and Democracy. Echaudemaison, C-D(1989) Dictionnaire d'Economie Nathan, p269. Helmut Schmidt is an ex–Western-Germany Chancellor, famous for his employment policy. Say, J-B (1803) Traité d'économie Politique. [...]
[...] However the state must not stay inefficient in front of a powerful market, it has to build strategies in order to protect the wealth created, to share it and to organise the future wealth of the nation which is yet to be created. References: Albert, M. (1991) Capitalism against Capitalism Paris, Le Seuil. Amsden, A. (1989) Asian's next giant. New-York Oxford University Press. Amsden, A. (1993) Structural macroeconomics underpinnings of effective industrial policy: fast growth in the in the 80's in five Asian countries. [...]
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