Professor Chen Ping said that there is no standard market economy, that is, there is no pure market economy.

Mainstream economics textbooks also say that it is now a mixed economy.

The question is: What exactly does a mixed economy mean? Does Mixed Economy Negate Pure Market Economy?

What is market economy? Generally speaking, market economy is transaction economy.

On the surface, what is traded is the goods. In fact, what is traded is the rights behind the goods.

Therefore, a clear definition of rights is a prerequisite for the market and market price. This is exactly what Coase Theorem expresses.

The place where rights are clearly defined is called private domain. The private domain can have a pure market economy, and it should also be a pure market economy. If the private domain is not a pure market economy, what does it mean? It must not be a voluntary transaction, which means that if there is compulsion, the property rights will be destroyed, and the logic will not be self consistent. In this case, what was the original definition of property rights for?

Mainstream economics negates the market with monopoly, externality and information asymmetry, all of which have problems, so we will not analyze them here.

However, in the real world, there are still areas where rights cannot be clearly defined. The area where rights cannot be clearly defined is called the public domain. For example, the rights in the apartment building are clearly defined and belong to the private domain. However, the property right of the corridor cannot be clearly defined, and it belongs to the public domain. The rights of green belts and roads in the community can not be clearly defined, and they are also public areas. Public assets are not the same as ownerless assets. An ownerless asset is an asset that has no owner at all. For example, an island on the earth that has not yet been discovered belongs to an ownerless asset. Public assets have many common owners, but there is no way to quantify the allocation of assets to individuals.

There is no market transaction in the public domain because it does not meet the preconditions of the market. In the public domain, people have to choose coordination mechanisms other than market transactions. For example, democratic voting is one way. Of course, democratic voting is not the only way.

There will be no market transactions in the public domain. Does this mean that there will be no pure market economy in the real world?

No. The private domain can have a pure market economy. Moreover, the private domain should also be a pure market economy.

Of course, there may not be a pure market economy in the private domain in reality, but it must be the product of man-made destruction of property rights. The artificial destruction of property rights leads to the absence of a pure market economy in the private domain, which is not to say that there can be no pure market economy. We should clarify the problem.

The emergence of wartime economy and forced production in the epidemic does not deny the existence of a pure market economy. At this time, rights cannot be clearly defined: who is the victim and who is the perpetrator of the epidemic, and the preconditions of the market cannot be met.

When the preconditions of the market are not met, the market will not exist. The market does not exist, which is not market failure, but market absence. The so-called market failure means that the market exists but cannot reach the ideal state. The market may be missing, but it will not fail. The market is not only efficient, but also the most fair. There is consensus that the market is efficient. Whether the market is fair or not, people's views are not unified. However, market transactions are voluntary transactions under strict protection of property rights. How can they be unfair? If the voluntary transaction between the two parties is unfair, there will be no fairness in the world. Inequality must occur in non market areas.

The word "mixed economy" gives people the illusion that market mechanism and non market mechanism work at the same time and in the same field. But this is actually wrong. At the same time and in the same field, if the market mechanism plays a role, there is no need for non market mechanisms. Of course, if the non market mechanism plays a role, there is no need for the market mechanism. People will choose the most suitable, not at the same time.

The word "mixed economy" must have a clear meaning in order not to mislead people. The correct meaning of the so-called mixed economy should be: there are two parts of reality, one is the private domain, the other is the public domain. The private domain implements the market economy, and the public domain implements the non market economy. Only in this way can we correctly understand and exercise the functions of the government.

Real economists should use their wisdom and conscience to clearly define the conditions under which market mechanisms should be used and the conditions under which non market mechanisms should be used, that is, their respective scope of application, in particular, to help people understand how the market operates effectively, rather than making a bunch of ambiguous theories, Intentionally or unintentionally, people doubt the effectiveness of the market.

(The author is a professor of Zhejiang University of Finance and Economics)