Contents Part I. Texts on Economics 6

1. The Science of Economics 6

2. Microeconomics and Microeconomics 9

3. The Future of Economics 13

4. Economic Systems: Two Important Distinctions 16

5. Labour 19

6. Unemployment 24

7. Supply and Demand 29

8. Wants and Utilities 35

9. Market 39

10. Markets and Monopolies 43

11. Money 47

12. Pricing 50

13. The Problem of Inflation 54

14. Banking 59

15. Central Banking: An Overview 60

16. Loans in the United Kingdom 63

17. Market Research 66

18. Marketing 73

19. Consumer Choice 77

Part II. Review Tests 82

TEST 1 (The Science of Economics, Macroeconomics and

Microeconomics, The Future of Economics, Economic

Systems: Two Important Distinctions) 82

TEST 2 (Labour, Unemployment) 85

TEST 3 (Wants and Utilities, Supply and Demand) 88

TEST 4 (Market, Markets and Monopolies) 90

TEST 5 (Money, Pricing, The Problem of Inflation) 93

TEST 6 (Banking, Central Banking, Loans in the UK) 96

TEST 7 (Market Research, Marketing, Consumer Choice) 98

Part III. Resource Tests 101

1. Alternative Market Structures 101

2. Free-Market Medicine in Russia. Is the Patient Recovering 103

3. Should Health Care Provision be Left to the Market? 108

4. Can the Market Provide Adequate Protection for

   the Environment? 113

5. Strategic Trade Theory. An argument for protection? 116

6. Concentration Ratios. Measuring the degree of competition 119

7. Competitive Advantage and the Small Firm Sector 122

8. Growth Through Diversification 125

9. The Firm as a Legal Entity 127

10. Should Central Bank be Independent of Government? 131

11. Are the Days of Cash Numbered? EFTPOS versus ATMs 134

12. Regulation US-Style 137

13. The Political Business Cycle 140

14. Managers and Owners: High Salaries and Corporate Goals 143

15. Inequity and Poverty 145

16. Technology and Employment. Does Technological

     Progress Create or Destroy Jobs? 148

17. Do People Volunteer to be Unemployed 151

Part IV. Fundamentals of Translation 154

Introduction 154

Lesson 1 159

Lesson 2 162

Lesson 3 167

Lesson 4 171

Lesson 5 175

Lesson 6 178

Lesson 7 181

Lesson 8 186

Lesson 9 189

Lesson 10 192

Lesson 11 196

Lesson 12 200

Glossary 205

Bibliography 214

Part I. Texts on Economics

THE SCIENCE OF ECONOMICS

Economics, like physics or meteorology, is a science to the extent that it comprises a set of analytical principles that work with consistent regularity. Unlike the so-called natural sciences, however, economics is a social science because it studies human behavior rather than the disembodied workings of nature. Thus it is appropriate to describe the subject, by analogy, as a set of tools. Just as a carpenter’s tools may be used to build a house, a printer’s tools to make a book, so an economist uses tools to build understanding – in this case, understanding of human behavior and its consequences. Each social science makes the same claim, however. So what distinguishes economics from its “sister” social sciences, such as sociology or psychology? The unique feature of economics is that it studies human behavior within the context of markets. A market is an institutional arrangement that fosters trade or exchange. Modern economics, therefore, is the study of how markets work – of how value is determined, and how inputs relate to each other in production, for example. But there is a larger set of questions involved: where did the market come from? Is it the only way to organize economic activity? What are its alternatives? How might they work?

The history of economic thought is replete with writers who sometimes addressed the former set of questions (i.e. how markets work) and sometimes the latter (what are its alternatives). Occasionally, but rarely, a writer will address both. Marx was such a writer. Most of the writers who achieved lasting fame as architects of the discipline of economics stuck to the former set of questions, however. So dominant was this tendency that it may be termed mainstream, or orthodox. By contrast, attempts to explore the second set of questions are typically regarded as unorthodox, or outside the mainstream. Surely the market place of ideas encourages variety.

Although others might present the subject differently, the important point that should be derived from any historical survey of the subject is that economics is a vibrant form of intellectual discourse, not a set body of principles.

Even in this new millennium, there is increasing evidence that economics continues to ferment. Even among mainstream economists, gnawing questions persist about the nature, scope and method of economic inquiry, and the value and place of economics among competing social sciences. Disagreement persists about the proper boundaries of the subject, the role of the individual versus the group, the method of analysis to be employed, and the usefulness of the field itself.

TASKS