Theory of Shocks About States in Static and Dynamic Economics

Introduction

The state has a special role in the self-organization and self-development of systemic integrity in technology, economy and society. It is necessary to start with the fact that society initially made the state responsible for a number of functions, which R. Musgrave conditionally reduced to three main groups: (1) allocation of resources; (2) economic stabilization (subject to cost-effectiveness) and (3) (fair) redistribution of income (Musgrave, 1959). Their implementation was provided by formal institutions classified as public goods. These phenomena accompanied the process of self-organization of systemic wholes, which was distinguished by the dominance of the object component under the conditions of the law of unity and the struggle of opposites and an increase in the importance of the subjective component at the time of increasing quantitative changes to form their new quality. As for the state, throughout the static changes in technological, economic and social systems, its functions were financed from a part of the GDP created in the economy. It is in this regard that the functions that somehow contributed to economic growth were paramount in terms of budget expenditures. It was about effective allocation of resources as well as about economic safeguarding (equilibrium). As for formal institutions, their focus on ensuring economic and financial stability was also seen as an unconditional imperative. Moreover, this approach to the role of the state in national systems remained unchanged, despite the transition from the formation of the basic structure of real markets to a structural hierarchy at the expense of money markets, financial markets, etc. In other words, if from the point of view of the object component of self-organization, the integrity of the economic system was strengthened by complementing the horizontal structure by building a vertical structural hierarchy, then the functions of the state remained unchanged. In other words, if, from a theoretical point of view, the structure objectively had to adjust to systemic changes in order to preserve its integrity, then the state, performing some semblance of structural functions, also had to change. However, it remained unchanged. This could not but affect negatively the state of the system as a whole. Economic balance and financial stability remained the priority of public policy, and this was the goal of formal institutions providing the functioning of real and financial markets. In other words, this conservatism of government actions objectively contributed to the shock destruction of structural ties as a result of the COVID-19 pandemic.