Among the types of activities, there are those whose meaning you do not immediately understand - sometimes you have to find additional information and think again. So, for example, a regulated type of activity means a monopoly … But what kind of monopoly, and what does this term mean in principle?
Monopoly and regulated activity - what is the connection?
The connection between these two concepts is very strong: the controlled activity most often means the activity of state or natural monopolies. The activity of the state in relation to the subjects of such monopolies is called "controlling" or "regulating": the state itself sets prices and tariffs for the services of subjects of natural and, of course, state monopolies.
Why does this type of activity take place?
Natural monopolies are called natural because they are formed without any artificial interference from the external environment or as a result of collusion or neutralization of competitors.
But how can one distinguish a state monopoly from a natural one?
A state monopoly refers to companies and corporations, the CEO of which can be a private person, but 51% of the shares will be owned by the state. In Russia, these companies include Russian Railways, Rosneft, Gazprom and others.
Natural monopolies are formed as a result of the fact that there is no competition on the market in the provision of such services, and the services and goods provided by the subjects of natural monopolies are irreplaceable.
One of the largest natural monopolies, which are at the same time regulated by the state, is housing and communal services in Russia, the activities of which are funded and controlled by the Russian government.
Interaction between regulated organizations and the state
Why can't all businesses be private? We have a market economy!
Even in a market economy, government participation is essential. A purely market system does not exist anywhere, neither in Russia, nor in the countries of the West, nor in the East, all the more so.
Organizations controlled by the state justify their existence by acting as a "buffer" during an economic downturn, which mitigates the losses of the national economy in principle. Also, many of the controlled or regulated entities are of national importance.
The state can also pursue ideological or strategic goals when establishing monopolies. Thus, a possible monopoly on the production of alcohol is expected to reduce the level of alcohol consumed by the population.
So, in the Russian Federation there is also a monopoly on the production of weapons, which, of course, has its own strategic meaning: if there were private companies, this would imply the need for their control, licensing, and unnecessary time expenditures.
What would happen if the owners of Aeroflot, housing and communal services or Russian Railways began to artificially raise prices? This would lead to social tension. And in the case of complete control over these organizations, the state has all the levers of influence on them and, accordingly, the prices for essential services (transport, hot water) are controlled by the state, and not by another capitalist, whose only desire is to earn more money.
