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REGULATION OF MONOPOLIES IN ECONOMY EXPERIENCE OF THE REPUBLIC OF KAZAKHSTAN

14 December 2016
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Authors: Darmesh N.

Monopoly is a phenomenon of an economic life of a human society. It represents "prism" through which all fundamental economic problems are considered, and acts as prominent feature of modern social and economic relations. The monopoly has dual character, which is shown in the social and economic effect, and is brought it to a society. Therefore, the relation to monopoly is ambiguous. Allocating negative consequences from monopoly presence in the market many researchers focus attention on necessities of its full interdiction. But the present stage of development of economic relations, level of technics and technology cause more rational approach to existence of monopoly which is defined by positive economic benefit of their activities. The monopolies possessing, the essential power are necessary for economical  achievement of fast rates of economic progress [1].

This statement is caused by that in modern conditions research activity on creation of a new product and new technologies are very expensive process which are presumed only by the large managing subjects possessing solid financial resources. There upon the barriers created by monopoly, give it’s certain confidence of profit reception, a part from which it can direct on research and development. About such properties of monopoly spoke J.Shumpeter and J. Gelbrait. Under the statement of J. Gelbrait: «The modern branch from several large firms is excellent means for stimulation of technical change. It is excellently provided for financing of technical workings out. The organization creates strong incentive motives to undertake workings out and to use them [2]. 

The modern branch it is divided into several large firms, with sizes and profits are proportional to market force, incorporate to provide availability of resources to scientific researches and workings out. The power, which does possible for firm to have some influence on the prices, provides that following incomes will not be transferred public by imitators before expenses on workings out can be compensated. In this case the market power protects stimulus to technical workings out» [5].

Kazakhstan is the country, which has carried out transformation from economy of socialist type to socially focused market economy. In the conditions of management system of managing national economy monopolization has got special scale. The internal resources of monopolization saved up in this environment cannot be explained within the limits of a neoclassical paradigm of an economic science as they were generated in institutional conditions, opposite to conditions of classical market economy. O.Bessonov defines it as the relations of distributing economy meaning suppression of the private initiative and refusal of the mechanism of a market competition. "Scale effect" was [4] imperative of a management system - the high production concentration ratio provided specific competitive advantages both in the country, and on behalf of all national economy in the world economy.

The tendency to concentration of manufacture any time corresponded to requirements of development of industrial system and cause the monopolized structure of economy. The competition between high-concentrated economic structures was in every possible way stopped, the state legally considered the given process as scale threat of integrity and efficiency of functioning of a management system. However, owing to action of economic laws, concentration cannot be carried out infinitely long, there are limits of its efficiency at which achievement return process will begin. As it happened with economy of the USSR and Kazakhstan as to a part of uniform economic system. There was a full-scale display of negative consequences of activity of monopoly that has led to the general stagnation in economy [1].

Got in the inheritance high-concentrated manufactures have proved to Kazakhstan the inability effectively to function in new market conditions that has caused necessity of their demonopolization and the subsequent privatization. However, owing to character of the organization of market economy at the development present stage again created enterprises, which began to unite in the new integrated market structures, but already on the basis of economic feasibility, advantage and efficiency. Many branches of economy of Kazakhstan continue to keep exclusive structure, operate from 1 to 3 large manufacturers [4].

 

It is necessary to notice, that the situation of pure monopoly with the boundless power is only theoretical assumption, which does not meet in a real life, therefore for the characteristic of monopoly researchers use the term «the dominating company» or «the managing subject occupying a leading position». In world practice, the category "leading position" is estimated by two criteria - structure of the market and character of activity. For example, in the legislation of EU the leading position is treated as [3]:

•    the situation at which the enterprise possesses the economic power, allowing to prevent an effective competition and to operate, without taking into consideration the competitors, buyers and sellers;

•    position at which the enterprise, owing to a market share, owning technical knowledge access to raw and to financial resources, has possibility to establish the price or to supervise manufacture or distribution of a considerable part of production in the relevant market.

According to the Typical law «About a competition» [5] as a leading position it is necessary to consider «such situation in the market when any enterprise operating or is independent, or together with the several other enterprises, possesses possibility to supervise the corresponding market of the concrete goods or service or group of the goods or services». Such definition specifies in possibility of collective domination or domination of "group of persons".

According to the legislation of Kazakhstan, the dominating is understood «as position of the subject of the market (or several subjects of the market) in the corresponding commodity market, giving to the subject of the market (or to several subjects of the market) possibility to supervise the corresponding commodity market including to make considerable impact on the general conditions of the reference of the goods» [1].

Criterion of reference of the subject of the market to dominating is occupied with it in the market the share which accepts following values:

•           «a share of the subject of the market, in the corresponding commodity market, a component of thirty five and more percentage;

•    the cumulative share no more than three subjects of the market which possess the greatest shares in the corresponding commodity market, makes fifty and more percent;

•    the cumulative share no more than four subjects of the market which possess the greatest shares in the corresponding commodity market, makes seventy and more percent;

•    the cumulative share no more than two financial organizations which possess the greatest shares in the corresponding market of financial services, makes fifty and more percent;

•    the cumulative share no more than three financial organizations which possess the greatest shares in the corresponding market of financial services, makes seventy and more percent » [4].

According to the author, only for an estimation of degree of domination of managing subjects in the market is not enough quantitative criteria. So, for example, in the Republic Kazakhstan Law «About a competition» in definition of the fact of domination the quantity indicator «shares in the corresponding commodity market of thirty five and more percent» is solving [3]. Such position can lead to a situation at which the subjects of the market, which do not possess the big share of the market, but have possibility is essential to influence trade conditions in the market, can and not to be recognized by dominating.

Bibliography and references
1. Akeshov, Aman. "Antitrust". Concise Encyclopedia of Economics (2nd ed.). Kazakhstan: Almaty. 2015. 2. Guy, Ankerl. Beyond Monopoly Capitalism and Monopoly Socialism. Cambridge, Massachusetts: SchenkmanPbl. 2015. 3. Stigler, George J. "Monopoly". Concise Encyclopedia of Economics (2nd ed.). Kazakhstan: Almaty. 2015. 4. Theodore, Aden. A monopolist who specializes on the demand curve. Policy Journal. 2016. 5. Wiscky, Chandler. Monopoly Profit and Loss. Policy Journal. 2016.

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