from the'free market' in order to provide services and goods for the public. Such public goods and services especially benefit the poor, because they pay lower taxes or no taxes and could not otherwise privately finance things like education or health services. The system of taxation and the provision of government funded services described is a form of redistribution of wealth that is instituted in order to protect the worst-off and improve social justice. Obviously an extensive social security system is only sustainable for as long as the economy can finance it, but in this regard it will be argued below that the economy can also benefit from such a system. States have numerous policy tools to intervene in the market. Besides competition laws, which aim to maintain fair market competition, the above mentioned system of income taxation, combined with government spending, subsidies, and labor market regulation can be efficient means for enhancing a vital market. Such tools can always have two effects: to protect specific members of society/specific branches of an economy, and to enhance economic growth. History has not only shown that markets need a certain amount of freedom, but also that unregulated markets do not automatically achieve the best economic performance. In particular, the recent history of the financial crisis of 2008 has shown that, for example, insufficiently regulated financial transactions can negatively affect the global economy. During this period short term investments in stocks and derivatives markets, led to economic activity which was not sustainable in the long term. A possible economic policy for states is to offer productive companies long-term credit which do not require the debtor companies to achieve large gains in short-term revenues(as the private credit facilities often do), but to achieve realistic, manageable and economically sustainable growth over the long-term. Another policy states employed at this time was to generally restrict financial transaction(financial transaction tax), in order to reduce the volatility of movements in value of stocks in the market. The discourse after the financial crisis clearly showed that economic sustainability has gained importance in economic thinking. While such ideas mainly concern those countries with stock markets and economies that are dominated by companies listed on such markets, general sustainability is an important goal, for economically weaker countries also. In order to develop a weak national economy in a sustainable way, whereby the development achieved is cross-generationally successful, countries need some form of long-term investment. Depending on the individual country situation, the state has to create a framework, in which long-term investments are somehow made attractive to private investors. Obviously such a task can be extremely difficult. Nowadays many development agencies, such as the World Bank for example, concentrate primarily on the improvement of the basic education and health services in countries in which they work, in order to lay the basis for sustainable economic development. If companies themselves are to invest in the vocational training of their employees, they need to be sure that their engagement in the economy concerned will be long-term. Which factors can convince companies to make long-term commitments to developing countries? Companies have to Market and State 23
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