engl_posob / В. И. Комиссарук ГЭФ 3-5 курс / text 4b

Exercise 5. Discuss the following questions.

1. What do you enjoy spending money on?

2. How do you feel about borrowing money? Would you worry about being in debt?

3. Do you think pocket money is a good idea? Why?/Why not?

4. What do you think about people who deliberately avoid paying tax?

5. Do you have a bank account? Do you get interest?

6. When do you tip and how much?

7. Are you cautious with money or do you tend to spend it when you have it?

8. Have you ever gambled? When? What happened?

9. Do you ever give money to charity?

10. Do you like looking for bargains in the sales?

Text 4B.

Smith also believed that labor - not land or money - was both the source and the final measure of value. He said that wages depended on the basic needs of workers, and rent on the productivity of land. Profits, he said, were the difference between selling prices and the cost of labor and rent. Smith said profits would be used to expand production. This expansion would in turn create more jobs, and the national income would grow.

Smith believed that free trade and a self-regulating economy would result in social progress. He criticized the British government's tariffs and other limits on individual freedom in trade. He preached that government need only preserve law and order, enforce justice, defend the nation, and provide for a few social needs that could not be met through the market. Smith's argument for a "hands off" government policy business, along with his analysis of economic forces, formed the basic ideals of economic liberalism.

Smith outlined he four main stages of organization through which society is impelled, unless blocked by deficiencies of resources, wars, or bad policies of government: the original "rude" state of hinters, a second stage of nomadic agriculture, a third stage of feudal of manorial "farming", and a fourth and final stage of commercial interdependence.

3. Society and "the invisible hand"

The theory of historical evolution, although it is perhaps the binding conception of The Wealth of Nations, is subordinated to a detailed description of how the "invisible hand" actually operates within the commercial, or final, stage of society. Smith explains two questions. The first is how a system of perfect liberty, operating under the drives and constraints of human nature and intelligently designed institutions, will five rise to an orderly society. The question, which had already been explained by earlier writers, required an explanation of the "laws" that regulated the division of the entire "wealth" of the nation among the three great claimant classes - laborers, landlords, and manufacturers.

Over the years, Smith's luster as a social philosopher has escaped much of the weathering that has affected the reputations of other first-rate political economists. Although he was writing for his generation, the breadth of his knowledge, the boldness of his vision, have never ceased to attract the admiration of all social scientists, and in particular economists. The Wealth of Nations projects a sanguine but practical, always respectful of the classical past but ultimately dedicated to the great discovery of his age - progress.

27