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Basics on social democracy : freedom - solidarity - justice
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Market and State 22 discourse has started to shift again and stronger state control of the economic sphere has been requested. Despite worldwide trends, one should not forget that all individual states strike particular balances between market and state in their respective economies. State intervention occurs for several reasons. One central reason is to ensure competition in the market. In other words: the state intervenes to prevent the formation of monopolies as it is generally accepted that the absolute dominance of one company would destroy competition and thereby prevent effective pricing within the system. Another reason why the state intervenes is to attempt to prevent the occurrence of so called'public bads', or to ensure that compensation is paid for losses sustained through the occurrence of such'public bads'. For example: from a purely economic perspective, oil companies are not concerned about increases in environmental damage caused by increased oil extraction. This is because in an unregulated market the negative effects of increased environmental damage would not affect the company's success, but only the public, e.g. fishermen who fish in the polluted area. Therefore, the state has to intervene to attempt to prevent pollution by instituting laws, and, in the event that pollution occurs contrary to the law, to force offending companies to compensate the public. The need for state intervention along the lines suggested by the two examples above is generally accepted, though the specifics of the intervention's implementation can be disputed. Even more controversial are attempts to adjust markets in order to improve social justice. This refers, for example, to workers protection, the welfare state and taxation. Social­democrats, in particular, believe that neither the state nor the market exists without reason, but to serve the basic values: the attainment of social justice through equality and liberty. This does not mean that social democrats generally want to restrict markets. As was said above, history has shown that the production and distribution of goods is done best through a market economic system. Such a system, however, always needs some form of state restriction, as was previously argued above. The questions are: in which fields; and to what extent? Companies that seek to produce goods at the lowest price so as to compete favorably with their competitors, automatically search for the cheapest modes of production and therefore reduce wages further and further. As workers need their jobs to sustain themselves, they cannot resign, unless another company pays better which will not happen, as the companies from which the worker can hope to gain employment are in competition. In a theoretical model this automatically leads to the payment of wages, which barely sustain the workers and their families. The payment of such low wages would clearly restrict the workers' liberty and would violate their fundamental human rights; for as the Universal Declaration of Human Rights declares:everyone has the right to life, liberty and security of person. Consequently the state has to offer some form of protection for its population, especially for the worst-off members of its society. Therefore many countries have a social security system that attempts to ensure their citizens' access to healthcare, education, housing, social security and a clean environment. Obviously such services have to be financed, however, and that is why the state has to tax companies and individuals. It takes money