efe

1.…is concerned with what actions governments can take to achieve desired ends.

2.…deliberately simplifies the individual building blocks of the analysis in order to

retain a manageable analysis of the complete interaction of the economy.

3.…worry about the breakdown of consumer goods into cars, bicycles, televisions, and calculators.

4.…prefer to treat cars, bicycles, televisions, and calculators as a single bundle called “consumer goods”.

5.…ignore interactions of one aspect of economic behavior with the rest of the economy in order to preserve the simplicity of the analysis.

6.The conflict between p ublic and private sectors exists mainly at … levels.

III. Consider which of the following matters might be classified as macroeconomic and which as microeconomic:

1.The size of aggregate output.

2.The assortment of commodities to which resources are devoted.

3.The distribution of the wealth created by the production of cars.

4.The rate of growth of output from one period to another for the economy as a whole.

V. Give a summary of the text.

VI. Render the text in English:

В экономике существуют два основных раздела. В обоих разделах применяются одни и те же основные принципы. М акроэкономика изучает функционирование экономики в целом, сосредоточиваясь на таких вопросах, как инфляция, безработица и рост совокупного выпу ска; почему наблюдаются спады и подъемы; почему цены растут быстрее в одном периоде, чем в другом; почему общее число безработных в экономике иногда бывает высоким, а иногда низким. М икроэкономика, наоборот, сосредоточена на изучении функционирования отдельных рынков и их взаимодействия, отдельных экономических элементов – в основном домашних хозяйств и фирм. Упор делается на цены и объемы выпуска конкретных товаров и услуг и на то, как в результате взаимо-

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действ ия рынков формируется распределение ограниченных ресурсов по миллионам альтернативных направлений использования.

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THE FUTURE OF ECONOMICS

The modern word “economics” has its origin in the Greek word oikonomos meaning a steward. The two parts of this word – oikos, a house, and nomos, a manager, show what economics is all about. How do we manage our house, what account of our stewardship can we render to our families, to the nation, to our descendants ?

From Socrates and Aristotle to J. M . Keynes, and Prof. J. K. Galbraith is a span of 2,250 years. It takes us from a slave society, where all but a few were poor, to an affluent democracy. Great changes of taste and fashion have occurred. Socrates rose in the morning, put on his cloak and went out into the public square to engage in conversation and discussion. His needs were few. Today we are obsessed with material wants, and struggle to the beach with a car loaded with deck chairs and aqua-lungs, towing a yacht or a power boat behind us.

Economics is the study of mankind in the everyday business of providing this enormous variety of goods and services. This book has attempted to describe the major aspects of production, distribution and exchange. It is clearly only a beginning to the vast study of sp ecialized aspects of the economy.

Certainly economics is a liberal study. Everyone needs to know some economics, for it explains the framework of prosperity and a liberal life is only possible when prosperity exists. Historically follow the flowering of art, literature and science around the world, and you will find they flourished most where prosperity was to be found. Even today only where the economy is strong can men be spared from production to think sublime thoughts, create beautiful objects, paint immortal pictures, or compose imperishable melodies. The humblest worker in such societies is ennobled by his labour, for it alone makes possible the culture of his times.

Within the last 30 years Thomas Carlyle's characterization of economics as

“the Dismal Science” has been invalidated. The new economics can handle the cycles of depression which gave such distress in the early years of the capitalist system. There are still problems to be solved, but reasonable affluence appears to be within the reach of all men if the political and social framework can be adjusted to suit the new situation. No longer do the greatest economists of their age stand aghast at the enormity of the problems. Instead they look blithely and optimistically forward to a future where the stockpiling of consumer goods ceases to be the major preoccup ation of men’s minds. When private wealth is assured, social well-being becomes a possibility. We turn from investment in things to investment in man himself.

Part of that investment must include a reappraisal of our attitude to material things. If we are to avoid the exhaustion of the earth’s resources, to preserve natural beauty, to prevent the destruction of our traditional environment and protect what little innocence is left we must examine what economic growth implies for world society. Inevitably controls over economic activity seem bound to increase unless

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individuals can show restraint. The fullest development of man requires a return to

Socratic contemplation of the state of “The Republic”.

TAS KS

I. Give the English equivalents to:

Экономический рост, распределение, потребительские товары, матер и- альные потребности, благосостояние, спад, экономический цикл, блага, капиталистическая система, изобилие, услуги, инвестиции, экономическая деятельность.

II.Find words and expressions that mean:

1.a man who is employed to look after a house and lands (old use);

2.a period of time;

3.a prosperous democratic society;

4.to spend much time in communication;

5.to move violently in a certain direction;

6.fast growth in any sphere of life;

7.deathless and timeless things;

8.to adapt to new conditions.

III.Match the terms with their definitions:

IV. Divide the text into 4 parts and formulate the main idea of each of

them.

V. Answer the following questions:

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1.Where does the word “economics” come from?

2.How can the word oikonomos be interpreted?

3.How can you describe a slave society and the modern world in terms of prosperi-

ty? Give your own examples.

4.What is the aim of business?

5.What are the three components of business?

6.What is the connection between prosperity and a liberal life? Can you explain your point of view?

7.How did Th. Carlyle characterize economics? Do you think Carlyle’s definition is

still applicable?

8. Why is it important for us to change our attitude to material things?

VI. Give a summary of the text.

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ECONOMIC S YS TEMS : TWO IMPORTANT

DIS TINCTIONS

Economic systems can be distinguished along many lines, but two are most fundamental. The first is: How is economic activity coordinated – by the market or by the plan?

The question does not, of course, demand an “either, or” answer. Rather the choice extends over a wide range fro m pure laissez-faire to rigid central planning. Society must decide which decisions it wants made in markets by individual bus i- nesses and consumers acting in their own self-interests, and which decisions it wants centrally planned so that businesses and consumers act more “in the national interest”.

The second crucial distinction among economic systems concerns who owns the means of production. Specifically, are they privately owned by individuals or publicly owned by the state? Again, there is a wide range of choice and, to our knowledge, there are no examples of nations at either the capitalist extreme where all property is privately owned or at the socialist extreme where no private property whatever is permitted. For example, while most industries are privately owned in the United States, a few are not. M any business owners face restrictions on what they can do with their capital. Automobile companies must comply with environmental and safety regulations. Private communication and transportation companies may have both their prices and conditions of service regulated by the government. Even in China, where large enterprises are publicly owned, anyone who can afford it can own a car, a bank account, or even a small business.

People tend to merge the two distinctions and think of capitalist economies as those with both a great deal of privately owned property and heavy reliance on free markets. By the same token, socialist economies typically are thought of as highly planned, as were those in the former Soviet bloc.

However, while there is an undeniable association between private ownership in a country and the degree to which it relies on markets, it is a mistake to regard these two features as equivalent. Socialism can exist with markets and capitalism can exist with rigid state planning. So, in thinking abstractly about a society’s choice among economic systems, it is best to keep the two distinctions separate.

History holds examples of planned, capitalist economies-such as Germany under Hitler, Italy under M ussolini, and Argentina under Juan Peron. To a much lesser extent, Japan and the other “Asian tigers” have also planned their capitalist economies-apparently with great success.

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TAS KS I. Give the English equivalents to:

Экономическая система, невмешательство, жесткое центральное планирование, средства производства, частная собственность, сталкиваться с ограничения ми, правила безопасности, предприятие, частное предприятие, общественное предприятие.

II.Answer the following questions:

1.What are the two fundamental distinctions of economic sy stem?

2.Give examples of the capitalist extreme or the socialist e xtreme?

3.Are all the industries in the US privately owned?

4.Can socialism exist with markets and can capitalism exist with rigid state plan-

ning?

III.Complete the following sentences:

1.The first fundamental distinction among economic systems is…

2.The second crucial distinction among economic systems is…

3.Capitalist economies are based on a great deal of…

4.Socialist economies are thought of as…

IV. Match a line in A with a line in B:

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V.Are the following statements true or false? Correct the false ones:

1.There are three fundamental distinctions among economic systems.

2.M ost industries are privately owned in the US.

3.Business owners don’t face restrictions on what they can do.

4.In China anyone (who can afford it) can own a small business.

5.Socialism can exist with markets.

6.There are examples of nations who are at either a capitalist extreme or at a socialist extreme.

7.Capitalism can’t exist with rigid state planning.

VI. Render the text in English:

Все экономические системы имеют две фундаментальные отличительные черты. Первая: как координируется экономическая система – рынком или планированием. Вторая: кто владеет средствами производства – государство или частные лица. Смешение этих двух характерист ик приводит к появлению таких понятий, как абсолютный капитализм и абсолютный социализм. Однако абсолютного капитализ ма не существует. Так, в капиталистическом США частные компании могут контролироваться и регулироваться государством, а в социалистическом Китае каждый, кто может себе это позволить, имеет право владеть личной машиной, банковским счетом и даже заниматься мелким бизнесом. Социализ м может сосуществовать с рынком, а капитализм может иметь строгое государственное планирование, как Германия при Гитлере, Италия при Муссолини, и в более мягкой форме Япония и другие «Азиатские тигры» также планируют свою капиталистическую экономику.

VII. Gi ve a summary of the text.

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LABOUR

“Labour” is the supply of human resources, both physical and mental, which is available to engage in the production of goods and services. The supply of labour depends on two things:

the total labour force available, i.e. the population less any sections of the population who do not work

the number of hours per week the population is prepared to work

The Working population. The groups who do not work consist of:

Young People. The number of young people available for work varies with the education available. If education is largely a matter of parental instruction and the handing down of techniques from father to son, as in many peasant communities, children will participate in production from an early age. If education is a matter of specialist tuition by professional educators the labour supply will be correspondingly reduced as pupils and students are withheld from the labour force during their schooling.

Retired Persons. The age of retirement affects the supply of labour. If, for example, retirement at the age of 65 is normal, so that perfectly healthy and energetic men and women retire compulsory at that age, the supply of labour is reduced. M any people of retirement age today are quite capable of continuing in productive employment.

The Hours Worked per Year. If the working week is reduced the supply of labour falls, unless the resultant improvement in health enables more efficient labour to take place in the shorter working week. Today reducing the 40-hour week to 35 hours almost certainly lowers the supply of labour. Holiday periods reduce the supply of labour. Some workers prefer extra income to shorter working hours, so that “moonlighting” (doing one job by day and another in the evening) is quite common. “M oonlighting” therefore increases the supply of labour available to entrepreneurs.

The Quality of Labour. M ore important than the actual supply of labour is the quality of labour. It is skilled, semi-skilled, or unskilled. Skilled labour is labour which has either mastered a particular craft, like toolmaking or printing, or has been professionally trained, like doctors, dentists, lawyers, and accountants. Semi-skilled labour is in some way a misnomer, since the operatives who are described as s e- miskilled have in fact reached very high degrees of skill over a very limited range of activities. Such labour can be very quickly trained, in from 4 to 6 weeks at the most. Unskilled labour, as its name implies, requires little specialized training.

Skilled labour tends to be more specific than semi-skilled or unskilled labour. The idea of “specificity” is an important one in economics. If a factor of production is specific it can be used in only one particular task: for instance, a dentist must be employed in dentistry if his true talents are to be used. If we take a dentist and turn him into the fields to cut sugar cane we shall be wasting his talents. Of course it may do the dentist a world of good to find out what a hard life the caneworker leads, but this is no substitute for the efficient use of his services in caring for his patients’ teeth.

Unfortunately, specialization can have some negative consequences. The most sig-

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nificant drawback is the boredom and dissatisfaction many employees feel whenthey do the same job over and over. Monotony can be deadening. Bored employees may be absent from work frequently, may not put much effort into their work, and may even sabotage the company. Because of these negative side effects, managers have recently begun to search for alternatives to specialization in the design of jobs. The three most common antidotes to the problems that job specialization can breed are job rotation, job enlargement, and job enrichment.

Job rotation is the systematic shifting of employees from one job to another. For example, a worker may be assigned to a different job every week for a fourweek period and then return to the first job in the fifth week. The idea behind job rotation is to provide a variety of jobs so that other workers will be less likely to get bored and dissatisfied. Companies that use job rotation include Ford, Xerox, the Prudential Insurance Co. of America, and the US Nissan subsidiary.

In job enlargement, the worker is given more things to do within the same job. For example, under job specialization, each worker on an assembly line might connect three wires to the product as it moves down the line. After job enlargement, each worker might connect five wires. AT&T, IBM , and the M aytag Co. have all experimented with job enlargement.

Job enrichment is perhaps the most advanced alternative to job specialization. Whereas job rotation and job enlargement do not really change the routine and monotonous nature of jobs, job enrichment does. It is, in essence, providing workers with both more tasks to do and more control over how they do their work. In particular, under job enrichment many controls are removed from jobs and workers are given more authority. Moreover, employees are frequently given new and challenging job assignments. By blending more planning and decision making into jobs, job enrichment builds more depth and complexity into jobs. These changes tend to increase the employee’s sense of responsibility and provide motivating opportunities for growth and advancement.

Factors affecting the efficiency of labour include:

1.The general education and background knowledge of the labour force. If it has been born into the television era of an advanced society it will be knowledgeable, adaptable, and sophisticated. If it has only recently left a peasant community it will be unsophisticated, superstitious, nervous, and slow to adapt itself.

2.The general health of labour force. This may be improved by diet, and adequate welfare services of all sorts. A developing nation’s progress may be slow because a fully effective labour force depends on raising the standard of living. This is a slow process and depends on an efficient labour force. We therefore have a vicious circle, which spirals slowly upwards, but at an increasing pace as the years go by.

3.The incentives offered to labour. Where there are few incentives labour will be less efficient. Where the incentives are great labour will apply itself more assiduously.

4.The availability of other factors of high quality. This is the commonest method of increasing the efficiency of labour. If it is backed by good quality land,

labour itself will be more efficient. If it is backed by well chosen tools and adequate power supplies, even a poor labour force will be highly productive.

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