that is societies. Therefore, the state has to make simply more available to businessmen that sphere of economy which is for it the most priority. It should be noted that the state should not interfere with spheres of economy where its intervention is not necessary. It not only is unnecessary, but also is harmful to economy.
According to classical approach the state has to ensure safety of human life and its property, resolve disputes, otherwise, to do that the individual or is not able to execute independently, or does it inefficiently. In the description of system of market economy Adam Smith proved what exactly the aspiration of the businessman to achievement of the private interests is the main driving force of economic development, increasing finally welfare as him, and society in general. The main thing was that for all subjects of economic activity the fundamental economic freedoms, namely a freedom of choice of a field of activity, freedom of the competition and a freedom of trade have to be guaranteed.
and to release stronger more production. Thus, the state acts as the arbitrator who chooses optimum (and the ratio between monopolies and competitive branches is most effective. During various periods of history for various countries this ratio was time -
The state is obliged to take the responsibility for creation of equal conditions for businessmen, for the effective competition, for restriction of a monopoly rule, and also cares of production of enough the public goods and services satisfying collective needs of people. The state has to provide socially equitable distribution of the income, care of disabled people, needy, old men. It also possesses the sphere of fundamental scientific development because for businessmen it very risky, extremely expensively and, as a rule, does not bring in fast incomes. The state regulates labor market, takes measures for unemployment reduction.
ensuring social protection and social guarantee. The state guarantees a minimum of a salary, an old-age pension, disability, a dole, different types of the help needy, etc.
The state will organize production of goods and services in which the private sector is not engaged. It creates conditions for development of agriculture, communication, transport, defines a defense expenditure, on science, forms programs of a development of education, health care, etc.;
Intervention of the state in economy pursues certain functions. As a rule, it corrects those "imperfections" which are inherent in a market mechanism and with which he or is not able to consult, or this decision is inefficient. The state takes the responsibility for creation of equal conditions for rivalry of businessmen, for the effective competition, for restriction of a monopoly rule. It also cares of production of enough public goods and services as the market mechanism is not able
Y Keynesians call the relation of consumption level of C to the income size tendency to consumption of C/Y. The relation of incremental sizes – a consumption gain to an income gain – is called limit tendency to consumption.
To number of problems which are not solved by the market competitive mechanism, effects belong external, or collateral. When production of any production leads to environmental pollution, additional expenses, as a rule, are required. Thus the product price which production caused similar side effects, it can not affect. The mechanism of the market often does not react to the phenomena which became the real trouble for mankind.
There are spheres which are out of striking distances of the market competitive mechanism. It first of all concerns so-called public goods, i.e. goods and services which are consumed collectively. It is obvious that the state has to assume care of their production and organize joint payment to citizens of this production.