II. Complete the open dialogue and learn it by heart

A.	…
B.	As far as I am concerned restoration of economy began after the Second World War and lasted for almost forty years.
A.	…
B.	I agree with you, but don’t forget that the process of restoration in Britain was caused by its joining the European Community in 1973.
A.	…
B.	Yes, but the matter is that the eighties became witnesses of large-scale privatization of the state enterprises which were nationalized.
A.	…
B.	As a matter of fact the average level of life rose, but divisions into more succeeding territories and less rich territories still remained.
A.	…
B	I don't think so. As far as I remember the rates of unemployment and inflation were gradually reduced, but remained high enough.
A.	…
B.	To tell the truth trade has been a key part of British economy for centuries. In my opinion the USA and Japan are the most significant trading partners of Britain.
A.	…
B.	Of course, as a rule other less developed countries of East Asia with their export-focused economy actively participate in the open market of Britain.
A.	…
B.	I'm of the same opinion. As far as I know Britain exports oil and manufacturing goods such as elec­trical and electronic equipment, aerospace equipment, machinery and chemicals.
A.	…
B.	On the contrary, Britain's export earnings from services such as banking, compu­ter services and tourism exceed those from export of goods.
A.	…

UNIT 2

AMERICAN ECONOMY

BEFORE YOU READ

Answer these questions

1. What is a mixed economy?

2. Has the American economy always been immensely suc­cessful? Why?

3. What do you know about the U.S. productivity and standard of living?

READING TASKS

A. Understanding main points

Read the text below about characteristics of the American economy and answer these questions, beginning your answers with the fol­lowing phrases: as a rule …; to tell the truth …; as far as I know …; the matter is that …; as far as I remember …; as far as I am concerned …; frankly/strictly speak­ing …; to make a long story short …

1. What issues have persisted in the American economy since the early days of the republic?

2. Has the government been involved, to some extent, in economic decision-making? What facts prove it?

3. What laws regulating many economic activities were passed in the United States?

4. What does the Social Security programme ensure?

5. What was the goal of new national leaders who spearheaded a drive to cut government spending and levels of taxation?

6. What helped the United States become the world's manufacturing power­house?

7. What industries gradually replace some of the old stalwarts of the traditional industrial base?

8. What can you say about the role of trade in the development of the US economy?

9. What are certain fundamental characteristics of the American economy?

10. Do you agree that Americans have often been described as pragmatists? Why?

B. Understanding details

Mark these statements T (true) or F (false) according to the information in the text. Give your reason using the fol­lowing phrases: as a matter of fact ...; I don't think so …; I'm of the same opinion …; in my opinion …; on the contrary …; strictly speaking ...; to my mind ...

1. The American economy is a dynamic, free-market system that is constantly evolving out decisions made by the government.

2. The federal government does not play an important part in the marketplace.

3. The American economy that has evolved over less than 250 years has never been immensely suc­cessful.

4. Gov­ernment intervention in the US economy has been found necessary to prevent flagrant abuses, to dampen inflation and to stimulate growth.

5. The US government has never supported and promoted the development of agriculture.

6. The Social Security programme can’t ensure that retired people have a regular income each month.

7. The export of American commodities made possible the import of capital and machines for expansion.

8. Until the end of the twenties century the United States conducted international trade under the shield of high or modified tariffs.

9. The US citizens have never freely expressed their economic preferences.

10. Americans have never accepted an important role for government to help create an environment with eco­nomic growth and progress.

CHARACTERISTICS OF THE AMERICAN ECONOMY

The American economy is a dynamic, free-market system that is constantly evolving out of the choices and decisions made by millions of citizens who play multiple, often overlap­ping roles as consumers, producers, investors and voters. The United States is generally described as a mixed economy, which is to say that even though the great majority of produc­tive resources are privately owned, the federal government does play an important part in the marketplace.

By any standard, the American economy that has evolved over less than 250 years has been immensely suc­cessful. It is more than twice as large as the next largest economy, that of Japan. By conventional measures, U.S. productivity and standard of living remain among the highest in the industrial world— although other nations have experienced higher rates of growth in recent decades.

Although the American economy has transformed itself over the years, certain issues have persisted since the early days of the republic. One is the continuing debate over the proper role for government in what is basically a marketplace economy. An economy based on free enterprise is generally characterized by private ownership and initiative, with a relative absence of government involvement. However, gov­ernment intervention has been found necessary from time to time to ensure that economic opportunities are fair and ac­cessible to the people, to prevent flagrant abuses, to dampen inflation and to stimulate growth.

Ever since colonial times, the government has been involved, to some extent, in economic decision-making. The federal government, for example, has made huge investments in infrastructure—from canals and post roads in the 19th century, to interstate highways and orbiting Earth satellites in the 20th century. The government has provided social welfare programmes that the private sector was unable or unwilling to provide. In a myriad of ways and over many decades, it has supported and promoted the development of agriculture.

New laws were passed regulating many economic activities—from sales of stock to the right of workers to form unions. Moreover, the government began to provide workers with a measure of economic security in their old age. The Social Security programme ensures that retired people have a regular income each month, and has been expanded to help them meet their medical costs.

But the pendulum has also swung the other way. At the end of the twentieth century, with taxes steadily rising and the U.S. economy stagnating, new national leaders spearheaded a drive to cut government spending and levels of taxation, and in other ways to reduce government influence over the pri­vate sector. Their goal was to stimulate the private-sector initiative and investment which is the engine that drives free-market economies.

Another recurrent theme has been the transformation of the U.S. economy by emerging technologies. Once a nation of farmers, the United States became the world's manufacturing power­house leading the world in the production of steel, automo­biles and other products. New service-based and information-processing industries gradually replace some of the old stalwarts of the traditional industrial base. Advances made in such fields as chemistry, electron­ics and biotechnology were producing goods and services ranging from semiconductor circuits to laser surgery. Simi­larly, new farming technology has transformed the American agricultural sector, allowing more food and fiber to be pro­duced by a constantly dwindling number of farmers.

A third theme has been the continuous debate over international trade policy and, thus, over the degree of inte­gration of the United States into the world economy. Trade was in many ways the linchpin of the colonial system. The export of American commodities made possible the import of capital and machines for expansion. But support for protec­tionist measures has often been strong. Until the end of World War II, the United States conducted international trade under the shield of high or modified tariffs. After World War II the United States became an advocate of freer trade. Al­though the nation's policy has remained generally pro-free trade, many U.S. manufacturing industries felt increasingly beleaguered by powerful new competition from abroad. Moreover, as U.S. trade deficits mounted, concerns that other countries indulged in unfair trade practices also increased.

Each of these themes underscores certain fundamental characteristics of the American economy. First, the economy is changing continuously, as citizens freely express their economic preferences directly in the marketplace and indi­rectly in the voting booth. At the same time, the persistence of these themes over time reveals threads of continuity in the dynamic U.S. economy.

In any event, Americans have often been described as pragmatists. The pragmatic test is that in addition to everything else, an acceptable theory must actually work. Clear evidence of the American people's pragmatism is demon­strated by their actions: to establish and maintain an econo­my soundly based on the principles of free enterprise. At the same time, Americans accept an important role for government to help create an environment with the widest possible opportunities for individual opportunity, and eco­nomic growth and progress.