Economics as a social science

Economics is a social science. This follows from the fact that economics study how people act. This put it at a disadvantage compared with the physical science which examines various aspects of man’s environment. Despite using similar models to the natural sciences economics lacks the ability to make precise predictions with accuracy. There are two major reasons for this: first, it’s impossible to conduct controlled experiments in economics; second, it’s impossible to predict human behaviour under similar conditions with any accuracy.

As to the first, physicists can build models and test them using laboratory experiments under tightly controlled conditions. Concerning the second aspect, economists are dealing with human behaviour rather then with physical properties. Their laboratory, it can be said, is the real world. In order to develop reasonably simple models they have to make simplifying assumptions. But while they may assume that “other things remain constant” unlike physicists they cannot actually hold them constant.

It is impossible to predict human behaviour, although people may behave in similar ways under similar conditions. Various social groups may respond differently in the same situation and the prediction may turn out to be false. So, as we stated before: human behaviour is really a puzzle in broad sense of the word. Exactly for this reason and many others government intervenes in the economy to purchase goods and services that benefit society as a whole. For example, if government didn’t take your tax money and buy national defence, wouldn’t you be inclined to buy a missile of your own? Or police, fire brigades, roads, satellites?

In addition society recognizes that children, the elderly, the handicapped - are not capable of supplying enough labour to provide themselves a decent standard of living. We could each contribute voluntary to care for these individuals, but instead we let the government to do that. The government collects taxes and distributes them to those who are incapable of supporting themselves in the form of transfer payments such as social security, food stamps, welfare, unemployment benefits.

Find in the text nouns with the same roots as adjectives, numerals.

COMPREHENSION CHECK

Exercise 1. Are these statements true or false?

1. Economics studies many aspects influencing people’s preferences, feelings, actions, that’s why it is a social science.

2. There are two reasons influencing the accuracy in economics: changing weather conditions and natural disasters.

3. Natural scientists have modern laboratories with latest equipment for their experiments, so the economists do.

4. The economists’ laboratory is the real world and the only equipment they have are computers with constantly changing data about economic situation, human behaviour etc.

5. It’s impossible to make experiments in economics under tightly controlled conditions.

6. Economists don’t forecast events, because it is impossible even in a simple model where simplifying assumptions are allowed.

7. It’s possible to hold “other things constant” in economics.

8. People respond similarly in the same situation irrespective of their education, social position and life experience.

9. Human behaviour is the most difficult aspect for predicting in economics.

10. People aren’t eager to make benefit for themselves investing into social sector such as police, fire brigades, national defence.

11. People prefer the government to take care of disabled, the elderly, the handicapped instead of the address help to an individual; it’s less bothering.

12. Taxes gathered from the population are distributed among various services of social sector.

Exercise 2. Answer the following questions.

1. What puts economics into disadvantage if compared with natural sciences?

2. Why do the economists lack the ability to make precise predictions with accuracy?

3. What are the conditions for making experiments in natural science and economics? Where are the conditions better and why?

4. What allows, at least, approximately, to develop simple models and make predictions in economics?

5. What is the most difficult to predict in any model? Why?

6. Why does government subsidies social sector? What is meant under “social sector”?

7. In what form are collected taxes returned to society?

Your opinion?

Is it possible to separate social sciences from economics? Why?

Don’t you think that it is a human being who connects them together?

GRAMMAR Numerals. Adjectives. Degrees of Comparison.

Numerals:

Cardinal numbers: one, two, three, …ten, twenty, thirty, forty, …hundred, thousand, million.

Ordinal numbers: the first, the second, the third, the forth, …the tenth, the twentieth, the thirtieth,…the hundredth etc.

Fractions:

Vulgar fractions: 2⁴/₇ two and four seventh; ²/₃ two thirds; ¼ a quarter; ½ a half; 4¾ four and three quarters.

Decimal fractions:

Mind! In English there is a point after a whole number, but not a comma like in our country.

10.2 – ten point two; 10.24 – ten point two four; 10.02 – ten point oh two;

10.002 – ten point oh oh two; 0.275 – oh(zero, nought) point two seven five.

We say:

Zero “0” the number zero	oh [ου]	3041201 three oh four one two oh one
-20ْ C twenty degrees below zero		1905 nineteen oh five
		7.09 seven point oh nine
nought [no:t]	nil	only in football scores
0.003 nought point oh oh three		They won seven nil (7:0)
love - only in tennis		The score is ten love (10:0)

Per cent:

20% – twenty percent; 0.5% – a half of one per cent;

0.25 – a quarter of percentage point.

Adjectives:

Simple	Comparative		Superlative
	-er		-est
nice	nicer		the nicest
big	bigger		the biggest
pretty	prettier		the prettiest
	more		the most
expensive	more expensive		the most expensive
valuable	more valuable		the most valuable
	REMEMBER
Good	better		the best
Bad	worse		the worst
Little	less		the least
Much/many	more		the most
	farther		the farthest
Far	(means distance)
	further		the furthest
		TRAIN AND CHECK YOURSELF

I. Chose the right variant for each figure or number.

1. In 2007 OPEC decided to raise prices on oil.

[a) two thousand and seven; b) two oh oh seven]

2. Authorities added 0.5% of budget on transfer payments.

[a) oh point five per cent; b)a half of one per cent]

3. The standard of living of disabled was 2 improved.

[a) two times; b) twice]

4. 0.25% of his income he transfers into unemployment benefits.

[a) a quarter of a percentage point; b) oh point twenty five per cent]

5. Severe draught spreads over African countries and the temperature is still +42^oC!

[a) plus forty two degrees; b) forty two degrees above zero]

6. Please, share only 0.01 of your income with people in need.

[a) nought point oh one; b) nought zero one]

7. Government spends … on national defence.

[a) millions b) million]

8. This football team always wins 10:0!

[a) ten nil; b) ten zero]

9. The telephone number of their scientific department is 304 00 20.

[a) three oh four double oh two oh; b) three nil four nil zero twenty]

10. Annually taxes increase on, at least, 0.25%.

[a) nought point two five; b) a quarter of a percentage point]

2. Make up sentences.

1. Behaviour, sense, word, puzzle, broad, human, in, is, of, the, a, a really.

2. May, making, economists, develop, simple, assumptions, models, simplifying.

3. In, sciences, experiments, laboratories, conduct, natural, can, controlled.

4. Has, is, its, no, the, economies, real, laboratories, laboratory, world.

5. Useful, to, the, a, as, and, intervenes, the, in, are, which, goods, government, whole, economy, for, services, purchase, society.

6. For, many, services, example, individuals, social, into, don’t, brigades, satellites, want, fire, invest, defence, money, missiles, national, their, into.

7. Taxes, many, big, rich, income, real, order, to, to, people, in, not, try, conceal, pay, their.

8. Like, the, themselves, even, people, children, elderly, the, of, some, not, with, are, categories, provide, capable, necessities, to, handicapped.

III. Insert the right article: a, an, the, zero article.

Economics is …¹ interesting discipline. For all its reliance on …² numbers, it is based on …³ behaviour of …⁴ human beings which is difficult to predict and analyze. Furthermore, …⁵ economic system is very complex. It unites …⁶ myriad resources that may be combined in many …⁷ ways. …⁸ economic system operates in …⁹ changing world. Still, …¹⁰ economists have developed some firm …¹¹ ideas about what makes …¹² any economic system run.

IV. Choose the proper pronoun.

1. A free-market economy functions automatically. 2. It is one of their/its major advantages. 3. It/its can respond quickly to changing demand and supply. 4. When markets are highly competitive no one/they has great power. 5. The more firms are competing, the more responsive she/they will be to consumer whishes. 6. The more efficiently firms can combine its/their factors of production, the more profit she/they will make. 7. The more efficiently people work, the higher will be them/their wages and the greater the value of money you/they receive.

V. Make up some sentences using the structures:

The more … the more;

The more … the less;

The better … the worse;

The quicker … the slower etc.