"Conflict-Free" Socio-Economic Systems

Perspectives and Contradictions

Elena G. Popkova

• Publisher: Emerald Publishing Limited
• Year: 2019
• Print ISBN: 9781787699946
• eBook ISBN: 9781787699953
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

"Conflict-free" Socio-Economic Systems: Perspectives and Contradictions analyses crisis as a component of the growth and development process of economic systems, and its role within the economic cycle. 

The scientific treatment of the role of crisis in the development of economic systems has traditionally been divided into two conceptual approaches. The first conceptual approach views crisis as a possibility to reconsider the trajectory of economic development of both the national systems and the global economic system overall. However, most scholars, politicians, and experts focus on the second conceptual approach, within which economic crisis is seen as a temporary failure in the work of a system which hinders the process of economic growth and development. This became a precondition for proclaiming a new course of development of the modern national and global economic system oriented at sustainability. 

This book provides a strong theoretical and methodological basis to sustainable development of economic systems, for researchers and scholars in the area of economic theory and sustainable economics. In locating the role of crisis within socio-economic systems, Popkova advocates the concept of a "conflict-free" system as the landmark of global economic development.

PART I
THE THEORY OF CONFLICTS IN
SOCIO-ECONOMIC SYSTEMS

Chapter 1

Conceptual Approaches to Treatment of the Essence of Conflict as an Economic Category

Tatiana N. Litvinova¹

ABSTRACT

Purpose

The purpose of the work is to study the essence of conflict as an economic category through the prism of the existing conceptual issues.

Methodology

The authors use the systemic approach for comprehensive, structured, and dynamic study of socio-economic systems. Within this approach, the method of classification is used, with the help of which the existing conceptual approaches to treatment of the essence of conflict as an economic category are determined and limited, and the method of comparative analysis, with the help of which the distinguished approaches are compared to each other. The information and analytical basis of the research is materials of the works of international authors on the issues of conceptual study of the essence of conflict as an economic category.

Conclusions

As a result of the research, it is determined that conflict – as an economic category – is described in detail by the concepts of the modern economic theory (e.g., the concept of state regulation of economy, the concept of innovations, and the concept of economic cycles) and is the object of a lot of research. At the same time, conflict – as an economic category – is studied fragmentarily within three alternative approaches – inter-subject, adaptive, and crisis, each of which focuses on a certain manifestation of conflict in economy: contradiction of interests of economic subjects with their interaction, lack of desire of economic subjects to adapt to changes, and failure in the socio-economic system. Within each of the above conceptual approaches to treatment of the essence of conflict as an economic category, reasons and consequences of conflicts are given, and specific managerial tools are offered.

Originality/value

Systemic study of conflict as an economic category, which unified all distinguished approaches, allowed determining conflict as a negative reaction of the economic system or its economic subjects to changes in economic reality, which is expressed at all levels of this system and is subject to management. The offered definition allows specifying the essence of the conflict of economic category and ensuring its systemic research.

Keywords Conflict; socio-economic system; opportunism; opposition to innovations; crisis; management

JEL classification D74; F51; J52; Q34; H12

Introduction

Socio-economic systems are unstable and are subject to conflicts due to certain reasons. First, these systems are complex and have many levels. They include a lot of economic subjects, each of which seeks its own interests. The social nature of economic subjects leads to their limited rationality, which complicates forecasting their behavior and managing them. Second, developing according to the market model, modern economic systems aim at intensive growth and are subject to constant changes.

These changes often conform to the interests of certain economic subjects and contradict the interests of others. Third, socio-economic systems are imperfect – despite multiple attempts at their optimization. Ideal models (including the model of market economy) of development of these systems are very difficult to be implemented in practice. This process becomes more complicated due to differentiation of socio-economic systems and complexity of models’ adaptation to their peculiarities.

Due to the above reasons, conflicts are a normal phenomenon, which appears in socio-economic systems. However, the modern economic theory does not have a fundamental scientific paradigm of studying conflicts, which hinders their precise determination and does not allow developing a clear and unambiguous attitude toward economic conflicts (universal or differentiated depending on the classification of conflicts, which is also absent) and managing the conflicts depending on the goals and priorities of socio-economic systems.

This problem is to be solved by this work, which is aimed at studying the essence of the conflict as an economic category through the prism of the existing conceptual approaches.

Materials and Method

The authors use the systemic approach for a comprehensive, structured, and dynamic study of socio-economic systems. Within this approach, the method of classification, with the help of which the existing conceptual approaches to treatment of the conflict as an economic category are determined and limited, and the method of comparative analysis, with the help of which the distinguished approaches are compared to each other, are used. The information and analytical basis of the research includes the works of international authors on the issues of conceptual study of the essence of conflict as an economic category.

Results

As a result of systematization of the existing scientific studies, devoted to conflicts in economy, we offer the authors’ classification of conceptual approaches to treatment of the essence of conflict as an economic category, which, together with their comparative analysis, is given in Table 1.1.

Table 1.1. Comparative Analysis of Conceptual Approaches to Treatment of the Essence of Conflict as an Economic Category.

As is seen in Table 1.1, we distinguished three conceptual approaches to studying the essence of conflict as an economic category. The first approach – inter-subject – is formed on the basis of the concept of state regulation of economy, the concept of international division of labor, and the concept of entrepreneurship. The cause of conflicts within this approach is contradiction of interests of economic subjects during their interaction. Within this approach, conflicts may arise at all levels of socio-economic systems:

• Micro-level: during interaction of entrepreneurial structures and consumers (between each other). It is expressed in the form of contractual opportunism – refusal from execution of terms of concluded contracts. This leads to aggravation of business climate (due to the absence of protection of contractual laws) and reduction of business activity in the economy. Conflict management is conducted through development and protection of contractual law.
• Macro-level: during interaction between entrepreneurial structures and population and the state. It is expressed in the form of violation of the law (non-observation of the set norms, tax evasion). This leads to the development of shadow economy. Conflict management is conducted through improvement of laws and control over their execution.
• Global level: during interaction of countries at the government level. It is expressed in the form of application of international sanctions. It leads to breaking of the global economic ties. Conflict management is conducted through the creation of international institutes for preventing and regulating the conflicts.

General treatment of conflict within this approach is negative, as conflicts lead to slowdown of rate of growth and development of socio-economic systems. This approach is presented in the works by Distler, Stavrevska, and Vogel (2018), Martin-Shields and Bodanac (2018), Scholz-Wäckerle (2016), and Williams and Vorley (2017).

The second approach – adaptive – is formed on the basis of the concept of innovations, the concept of marketing, and the concept of social acceptance of changes. The cause of conflicts within this approach is reluctance (or impossibility) of economic subjects to adapt to current (or planned) changes. Within this approach, conflicts may arise at the following levels of the socio-economic systems:

• Micro-level: due to the absence of desire of personnel to accept the current changes (change of working conditions and wages). It is expressed in the form of personnel’s opportunism, related to voluntary leave, negative attitude to work, and refusal or formal approach to execution of work responsibilities. It leads to reduction of efficiency. Conflict management is conducted through personnel marketing.
• Macro-level: due to reluctance of certain social categories or society on the whole to accept the current changes (growth of taxes, etc.). It is expressed in the form of social protest and leads to opposition to changes – small scale (exchange of negative modes, voting) or large scale (meetings, revolutions). Conflict management is conducted through support for social adaptation (information and consultation, psychological, and financial).

General treatment of conflict within this approach is positive, as conflicts allow determining drawbacks of changes and eliminating them, thus optimizing the changes. Representatives of this approach are Bogoviz, Ragulina, Alekseev, Lavrov, and Kletskova (2018a), Bogoviz, Ragulina, Alekseev, Anichkin, and Dobrosotsky (2018b), Bogoviz, Ragulina, and Sirotkina (2018c), and Popkova (2018).

The third approach – crisis – is formed on the basis of the concept of economic cycles, the concept of economic growth, and the concept of economic crises. The cause of conflicts within this approach is failure in socio-economic systems. Within this approach, conflicts may arise at all levels of socio-economic systems (micro-, macro-, and global levels). Conflict is expressed in the form of economic crisis. It leads to recession (reduction in the rate of economic growth) of economy and reduction of population’s living standards. Conflict management is conducted through crisis management of economic systems (companies of regional, national, and global economies).

General treatment of conflict within this approach is positive, as conflicts allow determining drawbacks in the models of development of socio-economic systems and stimulate activation of innovative activities for overcoming these drawbacks. This approach is presented in the works by Popkova, Zolochevskaya, Litvinova, and Zima (2017a) and Popkova, Lysak, Titarenko, Golikov, and Mordvintsev (2017b).

Thus, the performed comparative analysis of the existing conceptual approaches to treatment of the essence of conflict as an economic category showed that within this approach various causes of conflicts are distinguished, their different consequences are determined, and different methods of conflict management are offered.

However, it is possible to distinguish the following features of conflict of an economic category that are emphasized within all studied conceptual approaches to its essence:

• negative reaction: in the terminology of the systemic approach, conflict always envisages active expression of “indignation” (dissatisfaction) of the system or economic subjects by the existing situation;
• total coverage: conflicts are manifested at all levels of socio-economic systems;
• susceptibility to management: causes and manifestations of conflicts are always susceptible to management; with correct selection and application of managerial tools, it is possible to s...

Table of contents

• Cover
• Title Page
• Introduction
• PART I THE THEORY OF CONFLICTS IN SOCIO-ECONOMIC SYSTEMS
• PART II LEGAL CONFLICT
• PART III LEGAL FOCUS OF INTER-CORPORATE FINANCIAL CONFLICTOLOGY
• PART IV THE CONCEPT OF GROWTH AND DEVELOPMENT OF SOCIO-ECONOMIC SYSTEMS
• PART V CONCEPTUAL SUBSTANTIATION OF STUDYING CRISES OF SOCIO-ECONOMIC SYSTEMS FROM THE POSITIONS OF THE THEORY OF CONFLICTS
• PART VI RECONSIDERING THE ROLE OF CRISES IN DEVELOPMENT OF SOCIO-ECONOMIC SYSTEMS AS A RESULT OF THE 2008 GLOBAL CRISIS
• PART VII CLASSIFICATION OF PARTICIPANTS OF THE GLOBAL ECONOMIC SYSTEM FROM THE POSITION OF THE THEORY OF ECONOMIC CYCLES
• PART VIII “CONFLICT-FREE” AS A NEW DIRECTION OF DEVELOPMENT OF MODERN SOCIO-ECONOMIC SYSTEMS
• PART IX THE FUNDAMENTAL PLATFORM FOR STUDYING “CONFLICT-FREE” SOCIO-ECONOMIC SYSTEMS
• PART X PERSPECTIVES OF MANAGING “CONFLICT-FREE” SOCIO-ECONOMIC SYSTEMS
• Index