PhD,
Associate Professor, Aksenov E.P.,
The Kuzbass State Technical University, Russia
THE VIEW OF FUNCTIONAL MARKET
SELF-REGULATION THROUGH THE PRISM OF INSTITUTIONALISM
The study of financial management processes of economic entities from
the point of view of socio-economic development priorities, strategic
objectives, solidify the positive results that their modern fundamental
theoretical terms is overwhelming, yet out of view of researchers challenges
remain to ensure systematic-functional essence of financial management
businesses.
Desktop functionality requires the clear need to address the financial
management as the process of financial businesses, drop-through a system of
shared management functions, which are the expression of the development of a single
comprehensive whole-system of financial-economic relations of economic entities.
However, financial managers and specialists of the system-the functional
submissions that reveal the essence of the management of financial
relationships are not enough and deliberate. Though many may disagree with
this, since the notion of the financial system, the management process is one
of the most used in the theory of management and the financial and economic
practice. But the sense that often the managers and professionals are investing
in these concepts, indicative of the structural and functional asymmetry in
financial management.
Financial management, in fact, is the catalyst for economic activity economic
entities, supporting structure, which is "given" all other economic
tools in all depend on it. This is partly due to the influence of neoclassical
economic and financial theory, tradition consider finances as independent and
self-sufficient system with properties of self-regulation, which creates the
necessary conditions for the functioning of the economy, the society, but is
not able to act independently from the other parts of society, aims to address
the vital problems. Marxist conception of the basis and superstructure also
contributed to the dissemination of ideas about the primacy of finance in the
economy and society.
However, the concept of self-regulation of economy, finance, enjoys the
reputation of unquestionable truth more among the ideologues of economic liberalism.
In particular, this means that the theoretical justification of the concept
does not appear virtually anything new after the system of natural liberty, A. Smith. From a consideration of the
financial and economic theory from the perspective of its use as a means to
improve public welfare are the following conclusions:
a) the system of
natural liberty businesses need clear definitions of category, should be based
on the legal framework of the State, before she will be able to provide the
most efficient, effective, efficient and economic use of resources;
b) realization of
functions of private economic interests are not beneficial at all for some
natural overlap between private interests and the good of society, and due to
the fact that public institutions are organized in a way that compels private
interests of economic entities in those areas where they are most effective and
fruitful for the society;
c) the purpose of the
institutional regulation of the financial-economic activity of businesses – to
private interests in the beneficial sales channels of public interests relating
to obtaining of socially significant results – increase human capital, improve
the quality of life of the population.
It follows from this that the less popular concept now in Russia:
a) ignores normal
conditions of financial and economic properties of self-regulation of
businesses;
b) distorts the
essence, contents of this idea;
c) avoids the question
of borders, in which it may be silent about what is already in the late XIX –
early XX centuries of self-regulation under capitalism was just an illusion.
It should be noted that A. Smith and his system of natural liberty expressed
the view that time due, i.e., that it should be, not what it was or is there in
fact. In addition, the system of natural liberty was essentially a concept of society
in general and not of economics and finance as its component parts. As a result
of the financial-economic concept of self-regulation was increasingly abstract
design, than a reflection of objective reality. Of course, the phenomenon of
financial-economic of self-regulation occurred in the past, and at present, but
not in those boundaries, the extent of which are referring to supporters of
this concept.
Functional market self-regulation means that all financial and economic
processes: production, distribution, consumption, savings, investment should be
made in the form of the interaction of supply and demand for commercial prices,
regulated in the sales process. However, until the beginning of the 19th
century, and in most States, and much later, the main elements of the market to
some extent defined by non-market factors: political power, local customs,
formed the restrictions and privileges. In these circumstances, the exchange
can occur either at fixed prices, or quantitative restrictions placed on top,
which is preceded by the Exchange and its condition.
Depending on the specific conditions of the Exchange can have different
institutional origins and express different social relations. Therefore, the
expression « a system of markets » and the «a market′s system» are not
identical. And the first to be describing the real economic life must of
necessity be supplemented by specifying the nature and forms of regulation by
other institutions of society. Therefore, this expression can be meaningful,
the opposite economic self-regulation, as, for example, in the mercantilism or
in the models of market socialism.
The institutional nature of the financial and economic systems cannot impose
the logic of abstract pure market model as a theoretical framework of large-scale
transformations, even if reformers in intend to convert only the economic
system of society. This logic can be implemented in private theoretical tasks
with a certain target function, for which the problem of ascertaining the
system-wide consequences of the accepted decisions don't matter much. In the
reform of the financial and economic processes at the national level, affecting
the population cannot be disregarded the terms of the sustainability of
institutional forms of social life.
The basic principle of systemic-functional approach is not consistent
with economic centrism, because the claims of primacy over his parts, which, undoubtedly,
is the economic system with its financial functions. So you need to explore how
design changes, reforms and their implementation with the imperative of
rational mind, i.e. for which there is a financial and economic system, as it
serves its purpose as a differentiated, integrates and interacts with other subsystems
of society.
Systemic-functional approach to solving the problems of financial and
economic development inevitably leads to the need to find a critically
important set of functional imperatives, the level of which depends the
survival, integration and development of the nation. It is necessary to search
for functionally-structural entities responsible for their implementation. Features
of the development are due to historical differences in forms and understanding
of these generic functional imperatives, and the mechanisms for their
implementation.
You can disagree on issues about the number of imperatives and their relative
importance, the nature of the functional entities in society for their implementation.
Due to historical and methodological features of the development progress of
the financial-economic knowledge is manifested in the functional imperative is
nominated as the dominant and, accordingly, any social structure, responsible
for its execution, the role of the representative of a nation.
The whole economy of peace within the borders of faith merges with other
manifestations of social life, forming with them the indissoluble whole. The
world turns out to be a reasonable and justified only as the scope of ethics of
goodwill. In this ethics and in subordinate economies is the result of social action,
which is favorable for all participants and strengthening goodwill between
them. Therefore, all social formations has one common goal – to promote
goodwill, but from the point of view of conformity with the requirements of the
common good from the perspective of economic efficiency.
The common good is an absolute imperative and functional criterion that
should guide in all spheres of social life, including economics, finance. Economics,
finances are understood as a source of social values.
With systematic-functional positions of any financial and economic subsystem
have properties intrinsic to the socio-economic system in General, as it
essentially addressed the same problems of system integration and interaction
of the functions of the management of financial relationships. Within the subsystem
are developing similar problems of differentiation and the autonomy of
management functions. Process execution subsystem management function is also
linked with the process of its own development, in which the changing configuration
of the structure, the internal and external environment, the relationships of
domination and subordination of the functional elements.
In the Soviet era, financial-economic development the dominant role belonged
to the production function and relations directly related to its implementation.
This dominance has gone so far that turned the production into an end in it,
one of the real needs of other sectors of the economy, finance, and other subsystems
of the Russian society. There is now a clear expansion of commercial banking
systems that seek to subjugate the entire national economy. But here you can
see that the result of this dominance can be detrimental for both the economic
subsystems, which significantly reduces the level of implementation of the
system function, and for the State as a whole.
Excessive autonomy creates opportunities for imposing private monopolistic
interests of individual businesses or financial-industrial groups, dominant, as
relevant to national priorities and goals. Often the slogans of self-governed
economy worth yearning for authoritarianism, neglect of national priorities of
socio-economic development.
From these positions, you must consider the slogans «market», «open»,
«self-governing» economics that dominate in the modern Russian reality. Financial-economic
system can be totally self-regulating. It is always bad or well-coordinated by
the society in the face of political, socio-economic institutions that
determine development priorities and coordinate the interests of businesses
within the legal field.
References:
1. North, D. C.
Institution, Institution Change and Economic Performance. – Cambridge:
University Press, 1995.
2. Parsons, Ò., Smelser, N. Economy and Society. – Glencoe: Free
Press, 1956.