Файл: тексты на семестр.doc

Economics is a vast-scoped subject. It is a study of the possible ways in which people apply their knowledge, skills, and efforts to the gifts of nature in order to satisfy their material wants. To an economist, economic society is a mechanism for survival – a means of enabling people to carry out the tasks of resource raising, production, distribution and sales at a profit. If we look at the different political and social structures that exist in the world of today, and the way in which those systems developed over the years, we are tempted to say that people have made use of, and are making use of, a great variety of economic systems. In fact, it is possible to group these different economic structures into four broad categories. These basic types of economic organization are usually described as ‘traditional economy’, ‘market economy’, ‘command economy’ and ‘mixed economy’.

In traditional societies we find that the division of land and goods among people in a village or a town, the methods and times of planting, harvesting, craft object producing, the selection of crops and working tools, and the ways in which the produce is distributed among different social groups – these are all based on certain traditions. Year by year little is changed; indeed a change in working procedures may be regarded as an offence against the authority or even as an affront to memory of one’s ancestors. Traditional solutions to the economic problems of production and distribution are encountered in primitive agricultural and pre-industrial communities. But even in advanced countries traditions still play some part in determining how economy should work. We are familiar with businesses and professions in which it is customary for the son to follow his father into a trade or occupation.

The market system of economic organization is described as the ‘free enterprise’ or ‘capitalist’ system. The framework of a market system contains such essential features as private property, freedom of choice, competition, a very limited role for government, etc. Unlike it, command economy features a kind of economic plan. Nowadays there is no modern economy without some ‘command’ elements. In all developed countries there is a certain measure of government control too. Most economies in the world are of a mixed type. These countries are basically market economies, but all contain elements of state enterprise. Thus, they are mixtures of the command and the market economies.

Text 2 - economic environment

The economy comprises millions of people and thousands of firms as well as the government and local authorities, all taking decisions about prices and wages, what to buy, sell, produce, export, import and about many other matters. All these organizations and the decisions they take play a prominent part in shaping the business environment, in which firms exist and operate.

The economy is complicated and difficult to control and predict, but it is certainly important for all businesses. You should be aware that there are times when businesses and individuals have plenty of funds to spend and there are times when they have to cut back on their spending. This can have enormous implications for business as a whole.

When the economy is enjoying a boom, firms experience high sales and general prosperity. At such times, unemployment is low and many firms will be investing funds to enable them to produce more. They do this because consumers have plenty of money to spend and firms expect high sales. It naturally follows that the state of the economy is a major factor in the success of firms.

However, during periods when people have less to spend, many firms face hard times as their sales fall. Thus, the economic environment alters as the economy moves into a recession. At that time, total spending declines as income falls and unemployment rises. Consumers will purchase cheaper items and cut expenditure on luxury items such as satellite television and cars.

Changes in the state of the economy affect all types of business, though the extent to which they are affected varies. In the recession of the early 1990s Wall Street banks suffered badly. Profits declined and, in some cases, losses were incurred. This was because fewer people borrowed money from banks, thus denying them the opportunity to earn interest on loans, and a rising proportion of those who did borrow defaulted on repayment. These so-called ‘bad debts’ cut profit margins substantially. Various forecasters reckoned that the National Westminster Bank's losses in the case of Robert Maxwell's collapsing business empire amounted to over £100 million.

Text 3 - modern business community

In order to be able to understand the work performed by managers and the importance of their activities to any organization, an understanding of the environment in which they may be employed is necessary. And for that, an introduction to the subject called commerce is required, as it is a subject which is concerned with the methods by which raw materials, goods and services are transferred - bought, sold, and distributed - to consumers from those who produce the raw materials or goods, or provide certain services.

In most countries there are two distinct types of enterprises. First, there is what is known as the ‘public sector’, and it is run for the benefit of the population as a whole, e.g. a national health service, or to provide security for the nation and its citizens, like the police or the armed forces. The second type of enterprise makes up the ‘private sector’.

Despite the huge variety of objectives, the many enterprises - which collectively form the modern commercial world - can be broadly divided into four large groups: industrial, trading, service-providing and mixed-type enterprises.

Into the group of industrial enterprises there fall businesses such as mines, which extract raw materials (oil, gas, coal, iron ore, etc.) that are in general sold to other enterprises for use as power or in manufacturing. Agriculture and fishery are also classified as extractive.

The range of trading enterprises in this group is very wide, but the common activity is buying and selling of materials, components and products manufactured by the industrial enterprises.

Frequently the services provided by the service enterprises include the performance of some work such as banking, finance, agricultural extension service, real estate agency, transport, maintenance of machinery, etc., or the provision of insurance cover.

There are, of course, some enterprises, which fall into more than one of the above groups. For example, a business may run a poultry-raising farm, processes the poultry produced there on a small plant, and sell the products from its own shop or warehouse, and it is thus a mixed-type enterprise.

All three divisions of businesses are dependent upon each other. For instance, if there were no industrial enterprises there would be no materials available, and there would be few, if any, goods for the trading businesses. Services would have no clientele if not for basic enterprises that produce and trade. At the same time, no industrial enterprise could possibly operate without services of related organizations, or with little assistance of trading companies who ensure the complete turnover of goods and monies.

Text 4 - business partnerships and joint stock companies

In most countries the law defines a business partnerships as ’that relationship which subsists between two or more persons carrying on business in common with a view to profit’. There are great many reasons why two or more persons may get together to start (or take over) and run a business. It may be a matter of knowledge, experience, contacts, finance, assets or a combination of any two or more of those factors.

In some cases, one or more of the partners may provide the skill, experience or technical know-how, whilst others may provide some or all of the finance. Not all partners in a particular business necessarily are involved in the management of the business. Some, commonly known as ’sleeping partners’, may provide the capital and leave the day-to-day running of the enterprise to the ‘working’ partners or to non-partner hired managers. All the partners in a partnership share any profit made by the firm, but not necessary in the same proportion. All the partners, generally in the same proportion as they share profits, share any losses faced by the business. But the liability of each partner is unlimited and in the event of insolvency a wealthier partner could be called upon to meet personally any of the debts of the business, which the other partner(s) cannot afford to meet.

Advantages of partnership firms include the possibility of spreading the workload and responsibilities, whilst at the same time often allowing for specialization by different partners, and of course the short absence of one partner due to holiday or illness may not be felt as seriously as in a one-man business. There may be merit in consultations and discussions before decisions are made, so long as that does not entail lengthy delays and/or inaction. Efficient management is as important in a partnership as in any other business. In case where the partners do not have management ability or training, or where they wish to concentrate on their specialist functions, non-partner managers may be employed and be directly responsible to one or more of the partners.

The capital and ownership of a joint-stock company are divided into ‘shares’ (or ‘stocks’). The quantity and value of the shares in a particular company are generally a matter of convenience or commercial viability, and there is no fixed rule. Those who purchase shares in a company are called shareholders (or stockholders in some countries) or members, and they will in general share - in the form of dividends - the profits made by the company in proportion to the number and value of shares owned by each. Typically, the shareholders elect a board of directors to run the business on their behalf and to protect their interests, although the directors may be shareholders themselves, and that is especially true in smaller companies.

Text 5 - applied fields of economics

There is a basic theory and facts in economics, in which аll economists are interested. However, economics has some main applied fields that deal with specific topics, such as industrial economics, agricultural economics, economics of energy, economics of education, labour economics, etc.

Industrial organization and structure are studied by industrial economics, which also analyzes markets for manufactured goods as well as policies of various enterprises. The degree of concentration and barriers against new competitors in the market have already been analyzed by industrial economics for such important branches of economy as mining, gas development, and oil industries, etc. The behavior of enterprises and supporting companies in industry is influenced by the structure of the industry. Both profits and losses in any industry are affected by the behavior of market players engaged in the industry to be considered.

The economics of energy is known as another important field of applied economics that is closely connected with industry economics. A lot of energy has been used by modern economies in recent decades. Farms, factories, plants, transportation as well as individual families have greatly increased the consumption of various sources of energy since modern equipment and technologies were introduced.

Alone with the apparent shortage of adequately qualified personnel, power deficiency has recently been faced by farm and industrial producers. In the past, wood and coal were used as the main sources of energy. Then, these sources were replaced by gas and oil in industries. However, in the 1970s energy sources became scarce and there was a rise in energy prices. Since that time serious adjustments have been made by industrial economies in order to cope with the energy scarcity.

For the past few decades the problems of energy economics have been discussed by specialists and governments in many countries. Regular meetings are held by OPEC in order to regulate oil prices.

Text 6 - national balance of payments

The different kinds of trade that a nation is engaged in are varied and complex, they are a mixture of some visible and invisible trade. Most nations are more dependent on export than on any other activity. The earnings from exports pay for the imports that they need. A nation’s balance of payments is a record of these sophisticated transactions. By reflecting all of these transactions in monetary terms, a nation is able to combine the income it receives, for example, from exports, tourists’ expenditures, and immigrants’ remittances. This combined income is then spent on such items as manufactured goods from other countries, travel for its citizens to the overseas land, and the hiring of civil and agricultural engineers.

The two most important categories in any nation’s balance of payments are its visible and invisible trade sectors. A third very important category is investments. Investments are the means by which nations utilize the capital of other nations to build factories and develop mines for their own industrial base. For example, the railroads of the United States and of South America were built by the British capital. This capital paid for the costs of construction included materials and wages of the workers too.

Investments can have a crucial impact on a nation’s balance of payments. When an investment is made, capital enters a country, enabling it to import manufactured materials. When the plant is operative, it provides both jobs and taxes for the host country and, over some time, produces new manufactured goods for export. In subsequent years, an investment should yield a profit. Dividends, sums of money paid to shareholders of a corporation out of its earnings, can be remitted to the investing country. From the perspective of the balance of payments, in the year the investment is made, the host country receives certain income to its balance of payments, and the investing country records a debit. Next year the dividends may represent an expense for the host country and income for the investing country.