Every day, people carry out many operations, turning money into products. Production received is the result of the exchange. A person becomes good in such a quantity, in which wishes, for a certain fee, which is installed on a contractual basis. This form of exchange is called the market.
In contact with
What is the market
This is a system of relationships connecting the supplier and consumer of these goods (services). There is also a price that is monetary expression of value Product.
Types of markets operating in
Depending on the object of market relations, markets are:
- resource (natural resources, labor, labor);
- consumer (food, non-grocery goods, consumer services);
- financial (credit and cash relations, gold and foreign exchange reserve, insurance, contracts).
Clothing classification looks like this:
- single, representing individual trading points;
- local - a large number of individual points combined into one trading;
- regional - trading platforms uniting shopping points of a certain settlement;
- national - association of regional segments;
- international - trading platforms of integrated formations;
- world.
Classification depending on the volume of turnover:
- wholesale;
- retail;
- state procurements.
By the degree of freedom of the buyer and the seller distinguish:
- monopoly (one manufacturer);
- monopolistic (one consumer);
- oligopol (small number of manufacturers leading their activities based on secret collusion);
- oligopolistic (limited number of buyers leading their activities based on a secret conspiracy);
- the model of perfect competition (the ideal view of the competitive market, where there is a large number of consumers and trading intermediaries independent of each other).
Signs of the market
The main sign market economy is freedom of turnover, that is:
- the manufacturer itself decides how the amount of product is to produce;
- the buyer determines independently for itself, how much to consume;
- the price forms on the basis of the laws of supply and demand.
Important! In his work, "Studies on the nature and causes of the wealth of peoples", Adam Smith introduces the concept of an "invisible hand." In fact, the "hand" is a market mechanism that coordinates solutions to manufacturers and buyers. The seller, wanting to maximize its own profit, is forced to satisfy the preferences of buyers.
Market laws
As well as other mechanisms, market operates in its own rules.
It is characteristic of: the law of demand, law, the law of the equilibrium price, the law of competition.
Law of demand
With an increase in the cost of the good, without changing the conditions, the demand for products falls.
In addition to the price factors affecting the interest of the buyer, there are also non-counseled, which include:
- increase or decrease in income of the population;
- increase or decrease prices for other benefits;
- changes in the structure of the population;
- change consumer preferences.
Law of Offers
The higher the cost, the above the number of products offered Taking into account the fact that the remaining conditions remain unchanged.
Intense factors affecting the value of the proposal include:
- increase or decrease production costs;
- the emergence of competitors issuing substitutes;
- natural cataclysms, changing the political situation in the country, etc.
Law of equilibrium price
When the balance is reached between supply and proposal, the equilibrium price is established, capable satisfy the consumer and buyer.
Important! Market laws do not act in the conditions of a planned economy, and the achievement of equilibrium price is impossible. When fulfilling the plan, personal preferences of consumers are not taken into account, there is a deficit or overwhelming various goods.
Law of Competition
The increase in the manufacturers of the same product leads to the revision of costs, an increase in labor productivity, diversification of production, improving the quality of products, reduce costs, accelerate the pace of NTP, an increase in GDP, structural changes in the economy.
Considering all of the positive aspects of competition, the desire of society is explained. achieve perfect competition And the desire of monopolists prevent this process.
Briefly about functions
Market mechanism is intended to answer three main questions: what to produce? How to produce? For whom to produce? For this, a number of functions are performed, which are presented in the table.
Market functions in the economy
Market system
By itself, this system represents a unified system of segments of various purposes.
It consists of the following components:
- consumer benefits, services;
- labor force (production and constant revenue by population);
- securities, currency (transactions on the stock exchange);
- intellectual property, achieve scientific and technological progress;
- labor;
- spiritual benefits (books, newspapers, magazines, exhibitions, cinemas, tourist trips).
What is this, market of goods and services?
Otherwise known as consumer, he it is an organized structurewhere the demand from the government and households and the supply of small, medium and global business is found.
Its value is large, as it is most of the GNP. In addition, it includes:
- creation, as well as the satisfaction of public goods;
- ensuring the profitability of entrepreneurs.
Structurally as follows:
- state procurement;
- means of production;
- consumer goods and services.
State procurements
Government orders to meet the needs of the municipal, as well as a state nature that are allocated Funds from the state budget. Characterized by large volumes, strategic appointment.
Means of production
Subjects of this type of relationship are small and large industrial enterprisescarrying out the sale, purchase, exchange of production facilities.
Consumer goods and services
Public goods. For this type of goods introduced the concept of elasticitywhich allows you to estimate the degree of the need of good.
Attention! The elasticity of the goods shows the degree of change in demand or suggestions depending on the price. For example, take sugar. Regardless of price, it will be bought in the same amounts. We can say that this species The goods are non-ielastic, since the price change will not lead to a change in its consumption.
Market manufacturers
This is a type of relationship where industrial products are offered. In the conditions of this trading platform, manufacturers of goods are designed to satisfy the need for another manufacturer By selling, exchange, delivery of equipment into lease.
The main differences of this variety:
- fewer buyers who pay much large volumes;
- in the manufacturer's market, demand does not significantly change as a result of changes in value;
- geographical concentration of buyers;
- it is characteristic of the consumption of a large mass of products manufactured.
Marketplace of one product
Miniature idea of \u200b\u200bthe movement of goods, its sales. When determining such a trading platform, they talk about places where the highest demand for this type of product, about its main competitors, about the methods and methods of sales, about the share in the overall structure of the range.
Based on the laws of supply and supply, the number of goods and their cost is formed.
However, despite all positive aspects, there are also negative.
With the transition to market relations, such a concept appears as the "shadow economy". Since the tough competition conditions automatically eliminate weak players, they start looking for illegal ways to maximize their income.
The most striking representatives of the shadow economy are obscons. Of course, there are obsitans registered as legal entitieswho constantly pay taxes and openly provide data on their activities. However, a considerable part of these conditions does not comply. The shadow economy is bad in that its activity is not included in the taxable. Tax leaks from the budget always leads to his deficit.
What is the market and market mechanism in the economy
Market economy, signs and mechanisms
Output
The market system of relationship is not ideal. However, based on its abilities, it is largely better than the planned economy.
Photo: Flickr.com/ Aaron
The article is prepared specifically for 62 rooms of the magazine published by Bellen.
Cycle against linearity
Recently, the cyclic economy began to mention in Russia. Last year, in St. Petersburg, with the participation of the autonomous non-profit organization "Center for Transboundary Cooperation - St. Petersburg", for the first time in Russia, the International Conference "Cyclic Economics As the Context of Innovation in the XXI century" was held.
As the head of the center explained, the expert in the field of cyclic economy, sustainable development and effective learning, coach and consultant Maria Zhevlakov, for the first time about the new concept spoke in 1970. The authorship of the approach and names are attributed to the economists from John Lylele and Walter Steiner. The development of the idea of \u200b\u200bthe need to transition to a new economic paradigm was obtained in the materials of the Swedish non-profit organization The Natural Step, which promotes the idea of \u200b\u200bsustainable development.
In addition, in 1966, an economist, a philosopher and poet Kenneth Bowlding proposed a model of a closed economy as a long-term goal for replacing the ideas of economic growth based on unlimited use of resources. Boulding contrasted his model linear, for which he wrote in the work of 1966, the name "Economics of Cowboys" appeared as suitable.
He described his vision like this: "We similarly, a closed economy of the future can be called" the economy of the cosmonauts "in which the earth is lonely spaceship, without infinite reserves, of anything, for the extraction of Lee or pollution, and in which, therefore, a person must find his place in the cyclic environmental system. "
Came, saw, ... threw out
Cyclic economy, or a closed cycle economy (English Circular Economy), implies a different system of perception of any actions of a person. Only thinking about creating a technological novelty, for example, the next "smart" household appliance, the manufacturer must understand how it will be used after it fails or becomes becoming. In other words, the "second life" of things should not occur at the moment when the dump has already been formed under the windows, and it should be provided at the very beginning of a new thing - taking into account the materials from which it will be made, including packaging.
The same principles also apply to the life cycle - that is, the entire period of "life", from the moment of obtaining raw materials for the manufacture and to dispose - more simple goods, whether it is subject to furniture or package with chips: their consumption should not be associated with growing waste production on landfills or in the furnaces of incineration plants.
Such a scheme underlies the linear model: I took resources - produced goods - threw. In the book of Richard Girling "Garus", published in 2005, the author leads such data: 90% of the rates are becoming waste before the finished product left the factory; 80% of goods are on the landfill in the first six months of their existence.
In the context of the limited resources, various problems associated with the delivery of materials from developing countries, and price instability for the feedstock, a linear economy can go to a dead end.
The impetus to the introduction and promotion of the ideas of the cyclic economy occurred in 2010, when the former Yachtsman Ellen MacArthur created the foundation under his name, which began to promote this approach. Swimming on the yacht, as an athlete explained, led her to the thought of the exhaustion of those resources that were limited to its reserves during a swim, and after that, and to the awareness of the limb of land resources.
In addition to scientists, global corporations and world leaders, Hollywood's stars - Brad Pitt, Arnold Schwarzenegger, Maryl Strip and Susan Sarandon were connected to the promotion of the cyclical economy's ideas.
Click a circle and save
According to cyclic principles, it is supposed to immediately create a circulation of materials and energy in the economy. It's important that we are talking not only and not so much about the processing of waste, how much about the initial design of the product implying the possibility reuse The same components, their repair and improvement, as well as a systemic approach that takes into account all stages of production (for example, a well-known manufacturer of home products ICEA, which is produced including wood products, has come up to make wooden knives for oil from accumulating wood waste).
When the manufacturer decides to release the goods, he thinks out in advance how this product will circulate in the economic system. According to the calculations of the Ellen MacArthur Foundation, processing requires much more energy and material costs than repairs, modification and reuse.
The cyclic economy today has two main driving forces - large companies and governments.
Since the activities of large transnational corporations covers the entire production chain from the supply of materials before the sale of goods, it is easier for them and more profitable to introduce pilot cyclic projects. In many cases, these projects turn the user to the user: the product remains the property of the corporation and after the service life is returned to the manufacturer who can release a new model based on it or create another product using old materials.
The report on the cyclical economy, released in 2014 by the global Economic Forum, the Ellen MacArtur Foundation and the leading international consulting company McKinsey & Company, results in an example of projects of companies such as Philips, which participates in a collection of 40% of all used mercury-containing lamps in the European Union (from they are processed more than 95%), and also offers consumers instead of acquiring the service of the use of lighting devices returned to the manufacturer; Vodafone offering with contracts for communication services similar scheme - Rent instead of ownership - phone users; or N & M clothing store, which takes the used things for processing or selling as second-hand and in return provides discounts on a new collection.
Production loaning can bring the global economy annually $ 1 trillion by 2025, and in the next five years to create 100 thousand new jobs, saving $ 500 million on materials and preventing the emergence of 100 million tons of waste, the report says.
State support
True, while Philips or, for example, the American manufacturer of network equipment Cisco build new cyclic models, small business does not even know about a similar system. According to a survey conducted within the framework of the British project The Fusion Project 2012-2014, out of 286 small enterprises of Great Britain, France and Belgium, a little less than half did not know anything about the cyclical economy (although more than 60% said that they were estimated, their business, At the very least, partially follows cyclic practices - namely in the processing of waste and repair equipment). Therefore, one of the priorities of the Ellen MacArtur Foundation - Enlightenment.
Of course, the promotion of the cyclical economy contributes to state institutions. They create a favorable tax, legislative and institutional environment for the development of new business models, to support undertakings in cyclic production and management.
Support can manifest itself in different ways - through the allocation of grants for research, tax breaks, priority in the exercise of state procurement, an increase in waste taxes, clarifies Maria Zhevlakov.
Such measures already exist in different countries. Thus, the law on the promotion of the economy of the closed cycle was adopted in China, Scotland released its development plan for the cyclical economy. The European Commission is preparing documents that should increase the planned rates of waste processing and prohibit the materials from throwing out materials that can be used again into production.
According to Mary Zhevlakova, the transition to the cyclic economy will be difficult. It will require changes not only in the technologies that should be minimized, but also in creative disciplines such as design, advertising and digital technology. So far we are talking about individual closed processes and attempt to make the idea of \u200b\u200bthe general line of development of the world's economy in the future.
Oslands of private initiative
The cyclical economy in Russia today is not used as a method for building economic models, forecasts and plans. There are separate initiatives that can be attributed to the concept of a new direction, but no more.
"This is the" Thankata "store, working in St. Petersburg, can be attributed to such a cyclical island. This is a second-hand that takes clothes and shoes, "the example of Maria Zhevlakova leads. - But the difference between this company from the rest is that part of the clothing is sent in need, part is sold, and the part is processed into fiber in its own production. "Thank you" creates a circulation of clothes. "
The cycle of packaging container is building the Moscow company "Optic". Raw materials for its products are paper and plastic. The company gathers from its customers to the used container and sends it for processing. Paper The company recycle itself, producing products from it. The idea of \u200b\u200b"optics" - in creating a closed production cycle, consumption, processing and reuse of its products. Based on this concept, the company's specialists and develop new products by defining how the closed process can be created.
As Maria Zhevlakova says, events devoted to the cyclic economy attract a large number of participants, especially young people. But so far, only fragmented examples of cyclic processes exist in Russia. And even if the closed process works, manufacturers, according to expert estimates, consider such projects with just a private environmental initiative.
"I spend trainings in companies and talk about the principles of the cyclical economy. Many participants frankly admit that even the life cycle did not hear about the life cycle, and it was about to provide for reuse, and suppressed, "the expert says.
Russian non-cyclicness
According to Mary Zhevlakova, most producers in Russia make decisions in a very short term, based on the extraction of profits in the near future, and often deny the viability of the cyclical approach, referring to their experience. In addition, the Russian business is difficult to invest in cyclic development in conditions when the business itself is on the verge of survival.
"Even large international companies do not consider Russia as a promising country from the point of view of the cyclical economy," the expert complains.
However, the production collection and processing system is at the Russian plant of the Tetra Pak packaging manufacturer. It operates in the country and the mentioned policy on the reception of the old H & M network clothing. Actively promotes the economy of a closed cycle in Russia IKEA: the company's specialists want to create something like the secondary market of their goods and show the buyer that, say, a purchased sofa can be sold in five years, and not to throw in a landfill; This feature of IKEA is laid in the product price.
Maria Zhevlakova believes that the transition to the cyclic economy is the only way for development. It allows you to take into account and minimize the environmental consequences immediately when creating a product, and not fight them after the production of goods, "ideally creating a system of economic activity that meets the needs of a person, but organically inscribed in the natural ecosystem.
- Transfer
I propose to deal with the report of the "World Government", but at the same time help to translate the original source.
Today's economy is based on the principle of "rapid turnover" - takes, produces and manages. The faster we replace our gadgets, the better; And now it applies to most items that we consume - from cheap clothes to expensive cell phones. The construction sector, which makes up 30-40% of the volume of material production in society, is no exception. Here, as in the case of consumer goods, as we manage the earthly resources not only terribly inefficiently, but also is a generator of large amounts of waste. Fast growing levels of pollution, depletion of resources, loss of vital ecosystems and significant losses of economic value with each placed product - the consequences with which we have to face. The continuation of this path will lead to a catastrophic situation over time. The combination of the exhaustion of resources changing climate and pollution holds back growth and, ultimately, reduces the economy.
Economic values \u200b\u200blost due to linear material flows are rarely discussed. In Europe, for example, most of the cost of the source materials is lost after one cycle of use, despite the valiant recycling efforts ("Growth Within", McKinsey 2015). Even in the best systems, not all materials used are reused or processed, but those that are processed very often cannot be used again due to poor design, contamination or lack of standards. An example is the electronics. The design is such that most electronic products cannot be dismantled. Another example is high-quality steel in cars. It becomes so polluted in the disposal process, which is mainly used as not particularly valuable construction steel. The same can be said about many other materials, in particular, we are talking about plastics. It is understood that most of the secondary materials are either burned or burst, or are used only in minor cases.
In addition, due to the threatening perspective of the consequences of climate change, the current linear economic model is extremely problematic. We know that recycling and reuse of materials, at least metals, will save a lot of energy - and, therefore, will prevent pollution. The extraction and production of basic materials, such as steel, cement and aluminum, make up almost 20% of Global greenhouse gas emissions. Such measures would help to switch to renewable energy sources and improve the energy efficiency of production processes. However, it is also important to reduce the volume of material production through such activities such as reuse, recycling, extension of life, restoration and innovation and product replacement. Considering that the demand for basic materials is expected to quickly increase in the future - half of the city infrastructure, which will be necessary in 2050, is not yet built - urgently need a revolution regarding how we use the main materials and their substitutes.
3.8.1 The economy must be transformed
Natural resources serve as a basis for prosperity and well-being. All UN objects in the field of sustainable development (SDG) depend on the sustainable management and use of land natural resources. This relationship was clearly set out in the ground-based report - "Resource Efficiency: Potential and Economic Consequences" - the International Commission on Resources (IRP), begun at the G7 meeting in May 2016 in Japan. The IRP report describes in detail the risks faced by more or less linear production systems today. IRP stands for radical changes in consciousness, as well as in production and consumption systems. If all types of resources are not used much more efficiently, sustainable development can only dream.But improving the efficiency of resource use is only a step in the right direction. No less important is the transition to an economy based on renewable materials, solid materials and taxes for the balance of demand. If all this is not, the effect achieved will quickly disappear due to the effect of recoil and economic growth. Unfortunately, the majority of political measures in the past ignored these aspects and, thus, did not led the situation to absolute interchange.
Governments and enterprises should work together on the development of strategies for the use of resources to avoid both the lack of resources and more and more serious problems with waste and pollution. The performance concept should be expanded by including natural resources. Labor productivity increased by at least 20 times since the industrial revolution, and the increase in resource productivity was modest. Since 2000, it actually decreased, if you look at it from a global point of view. What we experience today is "Reculsions of resources", and not a "junction", that is, the growth in demand for resources is more than the rate of economic growth. At the time when the work is very productive, and unemployment has become a worldwide disaster, shifting efforts to the performance of basic resources, such as energy, materials, soil and water, will have more meaning.
New business logic is needed. Circular business models must replace linear. One of the specific tasks for the future will be the creation of a breakthrough for the concept of services instead of products for wide spectrum consumption - such as computers, mobile phones, appliances, Cars, Furniture and Textiles. Even in the real estate market, the same principles can be applied.
The most important problem will be as follows: how can I replace the principle of "receipt of income from the sale of more materials" by the system in which the income is increasingly due to the quality of the product service, which are preserved?
One of the innovators of the concept, a member of the Roman Club Walter focuses, formulates this as follows:
"Social wealth and welfare should be measured by assets instead of flows, capital instead of sales. The growth then corresponds to the growth of the quality and the number of all reserves - natural, cultural, human and industrial. For example, sustainable forest management increases natural capital, deforestation destroys it; Removing phosphorus or metals from waste flows supports natural capital, but the reset increases it to pollution; Modernization of buildings reduces energy consumption and improves the quality of building material. "From this reasoning, one more argument follows in favor of replacing GDP growth indicators that give an idea of \u200b\u200bquality, and not about quantity.
The transition to new business logic will require decisive political actions. The cost structure in the economy is seriously corrupted. Financial capital is overvalued, and social capital and natural capital are undervalued. If these shortcomings are not eliminated, the circular economy will not be implemented.
Fortunately, calls for a new production and consumption model are becoming increasingly frequent, which is facilitated by a number of studies of the Ellen MacArtur Foundation, the EU Commission, OECD, the World Economic Forum and the Roman Club. In the EU, the legislative "Circular Economy Proposal" was presented in December 2015 and is currently being considered and discussed by the governments of the States Parties and European Parliament.
Research of the Ellen Mak Arthur Foundation, the EU Commission and the Roman Club emphasized the fact that the transition to a circular economy is to use and reuse materials, and not just use - will bring many advantages. The proposal is that a circular economy in which products are intended to simplify processing, reuse, disassembled and recovery - where products and their properties are used much more efficiently, for example, by leasing and sharing, the traditional linear model "Take, produce and dispose of ", which still dominated the economy.
Savings that promotes reuse and recycling materials, as well as the extension of the service life of the product, by definition, more labor-intensive than savings based on the election philosophy, that is, on linear resources flows. Caring for what has already been made will lead to the creation of a larger number of jobs, rather than mining and production, which often pass on automated and robotic objects.
3.8.2 Social advantages of transition to a circular economy
Swedish themed research conducted in 2015 shows that the transition to a circular economy will largely contribute to an increase in economic competitiveness, an increase in jobs and reduce carbon emissions. Subsequent reports covering seven more european countries (Finland, France, Netherlands, Norway, Poland, Spain and the Czech Republic) will consider the consequences of three junction strategies, which underlie the circular economy - an increase in the share of renewable energy sources and an increase in energy efficiency, as well as material efficiency. The studies use the traditional imitation model of I / O and concludes that by 2030 carbon emissions can be reduced by 60-70% in all countries considered, if a key set of political measures is implemented. The impact on the employment of the population varies depending on the countries studied, but the number of additional jobs is in the range of 1-3% of the workforce.The report discusses a number of policies and investment options that will help promote a circular economy and benefit to work and climate that it will bring:
- Eliminate the shortcomings in the cost structure of the economy, allowing market prices to reflect the full cost.
- Review Taxation - in favor of the tax shift, reduce taxes on labor and increasing taxes on the use of nature. (Such a tax shift will speed up the transition to a circular economy, which will also help balance the threat of loss of jobs in an increasingly digitized economy).
- Strengthen the goals of disposal and reuse to help reduce and process waste and products. Impose restrictions on incineration of waste.
- Strengthen the existing policy to facilitate the use of renewable energy sources, such as the tariff for the supply of electricity and renewable energy certificates.
- Enter design requirements for new products to facilitate repair and maintenance, dismantling and countering obsolescence. We also introduce material and commodity standards in key sectors of the economy.
- Use government procurement to stimulate new business models, as well as the transition from the sale of goods to the sales of services.
- Make material efficiency The main part of climate change mitigation policy. Most of the mitigation strategies of climate change are based on the fields of economics, and the focus is on the use of energy. But the mentioned study in the Rome club demonstrates advantages in terms of significantly lower carbon dioxide emissions from longer use of products and from increasing processing rates and reuse.
- Run investments primarily in infrastructure to support a circular economy.
- Support innovations in low carbon solutions.
- Free all secondary materials from VAT.
It is extremely necessary to take political measures that will stimulate companies to supply products to the market, which must be recycled or used again after their expiration useful use. In the context of the EU, the ECOLOGICAL design directive, which has so far been mainly aimed at improving energy efficiency, would be well used to increase material efficiency. Taxation should also be considered as a political tool.
The current tax laws are not rewarding companies that use a circular approach to the economy. VAT rates can be easily based on analysis life cycle Impact on environment conventional products or products with a high content of recycled materials. And the last but no less important: tax shift is to reduce taxes on labor and increasing taxes on the use of nature - would significantly help the transformation of the economy, which is urgently needed.
To be continued...
For the translation, thanks to Diana Sherneva. If you are interested, I invite you to join Flashmobu on the translation of the 220-page report. Write in a personal or mail [Email Protected]
Allocate two main definitions of a closed economy. According to the first definition of a closed economy (Avtarka), they call the economy that does not participate in international trade, it is absent both import and export. Such an approach, which is a purely theoretical, helps to understand the principles of the functioning of the country's economy as a whole. External influence on the economy is not analyzed. The attention is focused on the consideration of internal incomes and expenses. Cumulative demand in Avtarkia develops from consumer, state and investment planned expenses. According to the second approach, under a closed economy, an economy that has substantial prohibitive restrictions in international trade. The main goal of such prohibitive measures is to protect local producers from stronger foreign competitors.
Benefits
The main advantage of Avtarkia is independence. International financial crises almost do not affect the country. Even if the connection with the outside world will be completely absent, the state will be able to exist independently. In addition to independence, the positive moments of the closed economy belongs low level consumer spending. The state regulates prices by holding them at the level of self-sufficiency.
disadvantages
The lack of full access to advanced world technologies adversely affects the technological development of the country. The lack of external investment affects business efficiency. In addition, the country should have a colossal supply of all sorts of resources, which can over time. With a lack of resources, the cost of all products related to them will be overestimated. As a result of the production of only the fact that available, the population does not receive certain benefits that are available to residents of other countries.
Characteristics
Any closed economy has the following features:
- the priority of its production. Import is possible only in the absence of any other alternative;
- all technologies are developed within the country. Access to other languages \u200b\u200bis practically absent. On the one hand, such a feature gives a chance to invent something unique. But this is very rare. On the other hand, the development of the country without the exchange of knowledge slows down, and the technological lag from developed economies over time becomes significant;
- the desire for self-sufficiency. The country is primarily focused on independence in all aspects: both in politics and in economics, and military development;
- the separation of the country from global processes can lead to the complete absence of allies and a large block of states configured hostile. A potential armed conflict in the conditions of technological lag is unlikely to be victorious.
Often for the closed economy is characterized by planning system. Alternatively, a preference to a resource-oriented approach can be given. In its pure form, the closed economy does not exist. For its successful implementation, significant areas are needed with a variety of resources and a huge population. In this case, with increased focusing on science, the state will still be able to exist and can even develop. However, today no state can afford it. In practice, any autarky today is partial.
