Liberalization of the economy in Russia. Liberalization of the economy is what?

In the days of the USSR there was a planned economy. Then there were monetary-commodity relations, but there were no real market mechanisms that would regulate sales transactions, prices, financial flows. There was no equilibrium of prices, competition, the price of the goods did not influence the laws of supply and demand, as it was formed on the basis of spending and was divorced from the situation on the world market. That is why liberalization of the economy is the main task for the transition to market capitalist relations.

Term meaning

Liberalization of the economy is a system of measures aimed at exempting from restrictions in the form of state pressure on the economy and business. Liberalization is a term derived from the word "libero," which means "freedom" in translation. Thus, the movement towards a "free" economy is aimed at creating favorable conditions for the free movement of prices, market turnover of services and goods. Also, liberalization of the economy is the creation of a more open market, transparent, with fair competition.

The processes of liberalization in a transition economy

First of all, the creation of market institutions and their transfer to capitalist principles of management is considered. Liberalization - the policy of the state economy and economic development, which covers all spheres of society. It presupposes the destruction of the state's monopoly on the formation of the activities of national economies and enterprises, the reduction of the level of state and municipal control over exchange operations, the complete abolition of the distribution of resources by central authorities, the opening of all opportunities for the development of other markets by economic entities. This is a way of developing concrete structures in the sectors of the economy, where the monopoly of state bodies was the strongest. The liberalization of the economy in Russia and in many other CIS countries is precisely in this direction, and this is the key that needs to be considered. There must be a process of lifting various prohibitions, removing barriers that hinder free access to various markets and complicate competition.

Driving directions

Liberalization of the economy is a process that does not affect the property of state sectors of entrepreneurial activity, but intensively promotes the formation of new actors that are able to create an active competitive environment. In general, the development of a "free" economy goes in three main directions.

1. The most important initial point of liberalization is the release of price formation from regulation by central authorities.
2. Free trade for all individuals and legal entities.
3. The most difficult and profound moment of liberalization is the subordination of all the activities of the subjects of production to market requirements, that is, the ideal model of regulation through the balance of supply and demand.

"Release" of the price

All of the above transformations fundamentally change the entire system of market relations and management, the way people think and live, and create numerous contradictions and problems in society. First of all, liberalization of the economy is the process of "releasing" prices, which leads to a sharp increase in prices, and this will naturally trigger the process of reducing the incomes of the population, reducing the standard of living, changing the entire structure of market consumer relations, and the like. In economic theory, there are two main options for "releasing" the price: "shock" one-dimensional and gradualist gradual. However, liberalization of the economy is always a mixed process, which at different times tends towards one or the other type. There is also a certain pattern: the less developed the market state in the state, the less effective the path of "shock" therapy.

Possible contradictions

Liberalization of the economy is always a lot of acute contradictions in the production and social sphere. Many enterprises that work in the military-industrial sphere with a focus on state orders lose their marketing opportunities. Many enterprises in a market economy may be uncompetitive and go bankrupt, with subsequent liquidation. Difficulties in sales can lead to problems in the procurement of materials and raw materials, that is, in fact, call into question the existence and functioning of companies, firms, factories and enterprises as such. Reducing demand from the population significantly affects the state of affairs of producers, and without that not easy. In a difficult situation, there may be production, which is given subsidies and benefits from the state, especially in the agricultural and agricultural sector. The introduction of a "free" economy can largely contradict the established stereotypes and mentality, which will give rise to the failure of this course of movement among the broadest masses of the population. It was with such problems that the President of the Russian Federation, Vladimir Putin, collided. Liberalization of the economy is a multifaceted and extremely complex process, it is difficult to achieve even initial goals in the medium term.

The consequences of the policy of "releasing" prices and free markets

Liberalization of economic relations between countries is a natural consequence of intra-economic processes within a single country. Liberalization of the economy is the creation of market mechanisms with a close connection between the markets of different countries, formed into one single market foreign economic space. Hence the importance of legal interrelations and adequate regulation of relations between states. Liberalization of foreign trade can expand the ability to provide assistance in moving from a planned economy, which significantly accelerates the solution of complex tasks to achieve a "free" market. The main advantages are the expansion of the possibility of investing in the country from various foreign institutions, the elimination of foreign economic centralized ties, the lifting and cancellation of all restrictions on imports (abolition of benefits, quotas, duties and licenses), maximum liquidity and currency convertibility.