Market failure does not constitute the basis for existence of the state-owned economy – concurrently on the status and role of the state-owned economy in the socialist market economy

In the socialist countries adopting the planned economy, the state-owned economy occupies an absolutely dominating position in the national economy, so its scope of existence is non-related to the so-called market failure. The western mainstream economic theories attribute the basis for existence of the state-owned economy to the complement to "market failure" and hold that the state-owned economy is only needed in the area of "market failure" such as the natural monopoly and public commodities. The western mainstream economic theories believe that the state-owned economy can only exist in the area of "market failure" and is unnecessary and impossible in the broad competitive areas. Fundamentally speaking, the goal of establishment of the state-owned economy is not to improve the private efficiency from the micro-level. In socialist countries, the state-owned economy is directly related to the basic socialist system or basic characteristics of the socialist system.