Contemporary International Scholars on the Market Economy

Author: Hu Daiguang
Publisher:
Publish Date: 1996-07-01
Features: The Contemporary Foreign Scholars on Market Economy was written as part of the Market Economy Research Series published by Commercial Press. Currently, in the process of establishing a socialist market economy system, it is necessary to refer to and learn from the valuable experiences and scientifically sound theoretical viewpoints summarized by developed Western countries and their economics circles, as well as policy measures that can be adopted. There is still much work to be done. Renowned American economist Paul Samuelson, in the 14th and 15th editions of his book Economics, published in 1992 and 1994 respectively, took the theme of "rediscovering the market" to argue that countries worldwide are "rediscovering" the power of the market as a tool for resource allocation. He believed that even in developed market economies, countries realize that their understanding of the market economy is still insufficient. In both the 14th and 15th editions of Economics, Samuelson explicitly stated that the government has three economic functions: first, to correct market failures in an effort to improve efficiency; second, to plan the use of taxes and expenditures to redistribute income to specific groups in order to promote fairness; and third, to regulate through taxes, expenditures, and money supply to support macroeconomic growth and stability, reduce unemployment and inflation, while simultaneously promoting economic growth. He concluded that these three functions of the government in the market economy cannot be neglected.