Modern Analytical Boundary Between Government And Market

The border of the allocation of resources between government and market has alwaysbeen a fundamental problem in economics analysis. The relationship betweengovernment and the market was either this or that in the traditional sense. Smith, as theeconomists banner of the classical school era, advocated to carry forward the pure marketeconomy to maintain high efficiency and criticized the government unwarrantedintervention in economy. Both the Keynesian economic crisis of capitalism or socialismstate ownership of the Soviet Union, China, emphasized the government to manage theeconomy as a representative of the public power in the middle of the20th century. Theshortcomings of the government monopoly of the economy exposed in1970s, so thegovernment respected the free market and weaken its role on economy, which hasbecome a new fashion. Throughout the development of the relationship betweengovernment and market, the government and the market boundary is a dynamic changeand the government and the market were placed in the mainstream of economic status inturn, or "hybrid" of the two, because of the different countries different nationalconditions, different market development level.The study was based on the evolution history of government and the market as astarting point, to seek the best combination between the imperfect government andmarket, which discussed theoretically reasonable positioning of the boundary of thegovernment and the market. On the one hand, we clarified the scope of government function and market function; on the other hand, the scientific orientation interventionand the content of the intervention of government should be studied and excellentenvironment and overall public service in market should be provided by the direction ofthe limited and effective government role. The case of China is complex and special thatthe government keeps the government’s focus on economy and in the same time themarket plays the basic role on it. How to locate the boundary of government and marketin the "hybrid" collocation become the urgent needs of the modern market economy.Especially under environment of transition period of Chinese deepening economicsystem reform, which the government put forward that the market plays a decisive role inthe allocation of resources in the Third Plenary Session of18th Central Committee, thispaper tries to realize the reasonable construction path of the government and the marketboundary, which not only has practical significance to improve the socialist marketeconomic system, but also provides a theoretical basis for the comprehensivelydeepening reform proposed in the third plenary session.