There is an imbalance between the product market and the money market, but the market can often reach equilibrium, so why do we need the government to adjust it?

Market economy needs macro-control, mainly because of "market failure", or it is difficult for the market to make a difference in some aspects of economic activities. First, since market regulation is an after-the-fact regulation, there is a certain time lag from price formation, signal feedback to product output, which will cause economic fluctuations. Especially those industrial sectors with long production cycle and constant scale in the production process, such as the agricultural sector, it is difficult to achieve a balance between supply and demand through market regulation. In order to reduce economic fluctuations, it is necessary for the government to formulate macroeconomic plans on the basis of medium and long-term forecasts to provide guidance for micro-decision-making. Second, some macroeconomic variables, such as the total fiscal revenue and expenditure, are of great significance to the healthy operation of the economy. However, the determination and control of these macroeconomic variables are beyond the ability of the market and can only be managed by the relevant macroeconomic authorities according to the needs of market dynamics and stable economy. Third, externalities. When some economic activities (such as pollution) lead to external benefits or losses, and are not included in the product price and cost, the premise of effective allocation of resources in the market is destroyed to a certain extent, which requires government intervention. Fourth, the issue of public goods. Public goods such as weather forecast, environmental protection, social order, domestic laws and regulations, basic science, public health and public safety are not exclusive, that is to say, the public can benefit from the provision of these products, but individual manufacturers lack sufficient motivation to provide these products. This requires the government to establish or guide through macro policies. Fifth, monopoly. In industries with significant economies of scale, the market often produces monopoly, which hinders competition and efficiency. Therefore, anti-monopoly and protection of fair competition are important responsibilities of the government. Sixth, fair income distribution is a necessary condition for the stable operation of social economy, but it is difficult for the market to effectively solve this problem and the government needs to adjust it. Seventh, the direction or planning of economic development. The economic development of a country or region needs planning, and it needs to concentrate its efforts relatively according to the development stage and specific conditions to create a leading industrial advantage. Eighth, information asymmetry. The distribution of information is unbalanced. For example, in the securities market, people can know what outsiders don't know, and doctors know the illness better than patients, which requires government intervention to ensure the fairness of transactions. Ninth, when the economy is in crisis, it can be recovered by relying on the power of the market itself, but it often takes too long and the economic fluctuation is too great, which affects social stability. The government needs to take the overall situation into consideration and make necessary interventions.

These conditions show that the market economy cannot be separated from macro-control. However, in addition to emergency intervention measures, control measures should be organically combined with the normal operation of the market. Even if it is an extraordinary measure to start the economy, we should focus on improving the industrial environment and economic order, boosting confidence and avoiding direct intervention in market operation as much as possible. Because practice has proved that there is also a "government failure". In other words, in some areas of economic activities, the government has a comparative advantage; In other fields, the market has a comparative advantage. China's socialist market economy should and can combine the functions of market economy with those of government regulation, and give full play to its institutional advantages.