The liberalization of the economy is a long-term process, which, according to some economists and representatives of political parties, can lead to very positive changes in the national economy. However, not everyone agrees with this opinion. And therefore, in order to understand this issue for sure, you need to understand well what the liberalization of the economy is.
The liberalization of the economy means a consistent process of liberating the national economy of the country from the excessive administrative influence of state power. Supporters of the theory of economic liberalization believe that the strong influence of the state on production and trade relations (for example, as it can be under socialism) fetters the mechanisms and internal forces of the market, which itself is a self-developing, self-organizing, and self-adjusting system.
Economic liberalization methods
The main directions of the theory under consideration are the state's complete or partial refusal of the state to regulate economic relations between market entities, as well as between them and the state power, liberalization of prices, domestic and foreign trade, transfer from state ownership to private ownership of the main sectors of the national economy (privatization), expansion of economic independence of each person and some other.
According to the supporters of economic liberalization, these measures allow in the not-so-soon, but attainable future (about 10-20 years) to significantly improve the economy, which was in stagnation or even decline before the start of market reforms. Such a positive effect is achieved primarily by freeing effective owners from the restrictions, and, as a result, increasing their number and role in society.
Negative consequences of economic liberalization
Liberalization of prices can lead to a significant decrease in the standard of living of the population. The blow to pensioners will be especially strong, because this category of citizens, as a rule, is no longer of working age to look for work with a decent salary; and the level of pensions is initially calculated without taking into account strong and prolonged changes in the state of prices. Moreover, prices for goods with absolutely inelastic demand can skyrocket, because the demand for such products (for example, salt, bread, medicines) does not change with any price change for them, therefore, it is profitable for private producers to maximize the price in order to generate greater profits.
The subsequent impoverishment of the population leads to the inaccessibility for them of a number of services and quality products, which in turn is the reason for a decrease in life expectancy, as well as an increase in the level of criminalization of society.
The liberalization of the economy can also lead to the withering away of enterprises (even very large ones) that have not adapted to the new market conditions, the dominance of low-quality but cheap imported products, and the undermining of the country's food security.
