In order to promote the wealth of nations, what should be the relationship between the visible hand of the state and the invisible hand of the market?

Résumé du document

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.

Extraits

[...] As a conclusion it appears very difficult to define what should be the relationship between the powerful market and the legitimate state. The wealth remains indeed, produced by the market economy because of the profit motivation that stays with the central hypothesis. Nevertheless it also appears that the market does not regulate itself alone, it needs the state's involvement for providing an efficient welfare state, which should be considered as a part of the nation's wealth. The anti-cyclic policies in order to stabilize the employment and inflation levels remain important even if the Keynesian concepts seem to experience a relative weakness in the global economy. [...]

[...] When a producer makes a good, he is not interested in keeping it, so he looks for exchanging it quickly. As he exchanges it, he earns wealth and is not interested by keeping it so he looks to buy a new product quickly. The supply creates its own demand. Le fait seul de la création d'un produit ouvre dés l'instant même, un débouché à d'autres produits Walras, Léon(1874-1877) Eléments d'économie politique pure. The global demand is equal of the global supply, thus the market regulates itself. Hobbes, Thomas (1651) Leviathan. [...]

[...] Smith, Adam, (1776) The wealth of Nations “When the individuals are secure of enjoying the fruits of their industries, they naturally experts it to better their condition” Ibid note chap11. The state has to produce the transport services because it's strategic and necessary for the business. Marx, Karl. (1867) Capital, The Labour Theory of Value. Popper, Karl (1966) The open society and its enemies Routledge, p179. “Which freedom should the state protect? The freedom of the labour, market or the freedom to the poor to unite? [...]

[...] So the wealth of the nations could result in the countries' technical advantage. The state plays its role in order to promote research and development in strategic sectors for creating future growth. The high level of social protection and the wealth sharing is not an obstacle for the economic prosperity of nations. The developmental state strategy, using the state as a strategic instrument The other example of a global state intervention as a strategic player is the developmental state strategy in Asia: Korea and Taiwan remain good examples. [...]

[...] Krugman, P.(1994) Competitiveness a dangerous obsession. Foreign affairs n°73. Ricardo, D. (1992) On the principles of political economy and taxation. J-M Dent and sons. Smith, A. (1776) An Inquiry to the nature and causes of the wealth of Nations London, Routledge. Say, J-B (1803) Traité d'économie Politique. Schumpeter, J-A (1943) Capitalism, Socialism and Democracy. London Allen and Unwin Stiglitz, J.(2002) Globalisation and its discontents. London Allen Lane. Walras, L. (1874-1877) Eléments d'économie politique pure. [...]