Chapter 8. Public Expenditures of Economic Character - Votricov Denis

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8/1. The need for and content of Public Expenditures of Economic Character Public expenditure of an economic character: • related to the Economic function of the State (Government intervention in the Economy); • due to the presence of State Property; • Associated with servicing mainly material Production and Circulation of Capital; • Necessity of Government REGULATION, changes in Growth rates of Individual Structural units for the restructuring of Production in accordance with the changing Needs of Society; • Precede the mobilization of resources for State Participation in the Process of reproduction. In retrospect, are the following motives of state intervention in the economy: • Political. Historically, the State develops Military Enterprises. This led to the Development of the Military Government Weapons and Gunpowder mills, Factories, Shipyards, ports, etc., Which in Turn - Give an impetus to the Development of a number of related industries, lead to lower costs of private entrepreneurs. • Economic. With the Development of Capitalism, appears a need in the communication systems and some individual Sectors, while the size of Individual Stocks did not allow Private Entrepreneurs to Organize the Production and Maintenance of the Necessary scale. The State Bears the Costs of Organizing the most important sectors of infrastructure (railways, post, telegraph), and mining industries. These industries do not directly participate in the process of production, but Necessary for the functioning of the Economy, require large one-time Investment That Could not be mobilized at the stage of Primitive Accumulation of Capital. In addition, the Industry's Infrastructure Have low Profitability, paid off over a Long Period of time. As the Society CAN not activate without the products and Services of These Sectors, and for capitalists is unprofitable to Invest in These Sectors, the State assumes these Costs. • Fiscal. The need for increase inrevenue encouragesthe State to build enterprises for the Production of Luxury goods (porcelain Factories for the Production of tapestries, Silks, Watch Factories, etc.). A number of industries (Gold, Salt, etc.) , the State develops due to limited Resources or a high Profitability. From fiscal Considerations, the State monopolizes the Production of Salt, Matches, Tobacco, Vodka and other Similarproducts. Using a Special Law State declares These industries its monopoly . A Classic example of such a monopoly was the wine in Russia and other countries.