In the current elections we are choosing between two country models. In one there is a state that promotes development, social justice and the redistribution of resources, and in another there is the neoliberal model, which focuses on a greater concentration of resources and the minimization of the economic and social rights achieved, as well as the application of regressive measures aimed.
The economic history of the 20th century has shown that the market does not regulate itself, but instead experienced profound crises of insufficient effective demand, in which consumption and investment were unable to absorb the production of goods and services. For this reason, there is a need to distribute income and resources more fairly based on external market stimuli.
Public investments
One of the tools proposed by John Maynard Keynes to address this lack of demand and to mobilize idle resources in the economy due to their regressive distribution in the market is public and private investment. However, for the state to invest, it is necessary to have an efficient and progressive tax policy that allows it to obtain resources and also promote consumption, which in the Argentine case is one of the crucial variables for economic growth.
The public sector has a more macroeconomic and integrative view of the totality of productive and social needs than the private sector. For this reason, the state can direct resources to strategic development sectors.
Crucial research and scientific and technical results, developed and financed by the State given the scale and level of risk to the private sector, were subsequently used by companies to develop their products and services, as in the case of: for example Internet .
The developed countries of Europe, applying profound economic and social policies within the framework of the welfare state paradigm, inspired by Keynesian policies and through public measures of regulation, redistribution and economic intervention, achieved a significant level of economic development combined with advances in security . Labor legislation and protection of the most vulnerable sectors.
This type of policy was also used in Argentina from the 1930s, when exchange controls were introduced, economic programs and government involvement in the production of goods and services were developed, and the central bank was established.
Other responsibilities of the public sector include directing and directing economic activity, carrying out infrastructure work that strengthens all sectors of society, and producing goods and services. To carry out these activities, the state increases the level of employment in the economy, employing about 18 percent of the economically active population.
Public companies
Public enterprises produce goods and services that expand and complement the private sector’s level of production, thereby helping to increase their supply and contain the prices of goods and services.
In addition, sometimes there are products and services that are not attractive for the private sector to choose to invest and participate in due to their low or limited economic profit margin. In these cases, the State decides to invest and carry out the production or provision of these activities considering that they are necessary or essential activities for the community as a whole or that they contribute to the economic or social development of other productive sectors or regions of the country promote services and the promotion of investments with low economic returns, but which are activities with a high impact.
The public sector may also own, manage, and provide resources for economic activities that are strategic to sovereignty and national security, such as the management of certain natural resources, communications, and transportation.
Efficiency?
The free market does not efficiently distribute the necessary resources in such a way that they are mobilized for sustainable production and distribution for the benefit of the majority of society. When neoliberal economic and political models are applied, economic and social inequalities deepen.
Greater deregulation of the economy, as occurred in the 1990s, means a greater concentration of scarce resources and a more regressive distribution of those resources. When the public sector reduces intensity in carrying out its tasks, economic asymmetry increases in favor of the sectors that concentrate the most wealth, exacerbating the failure of the free market.
