Task 1. Read and translate the text. Do you agree with Keynes’s idea that the government should actively influence the economy?
Do you agree with Keynes’s idea that the government should actively influence the economy?
In the nineteenth century economists believed that there were limits to human wealth.
In their opinion when one man became richer another grew poorer. If a country wished to improve its standard of living it had to export more than it imported. So in Britain the main argument in those days was about free trade and protectionism.
The owners of textile factories naturally supported free trade. The farmers on the other hand were afraid of foreign competition. Free trade won because Britain at that time was able to import cheap raw materials from its colonies and re-export them as finished goods. If the government had introduced import controls at that time it would have damaged the position of Great Britain as the strongest manufacturing nation in the world.
In America a similar belief in free trade eventually led to the Wall Street crash in 1929. People in the USA benefited from the expansion of the American economy in the First World War. They became convinced that money automatically made more money.
If there had been no excessive speculation in stocks and if people had not become convinced that speculative investments were always profitable the effects of the “crash” would not have been so disastrous.
Following the Wall Street crash the economist John Maynard Keynes introduced a new theory. In simple terms his solution to the problem was that there is no fixed limit to human wealth.
He believed that if government helped factories, factories would create jobs, if factories paid good wages every worker would become a consumer, if people could afford to buy goods, factories would produce more.
For a time, Keyne’s theory was successful. In the 1970s, however, people began to realize that the world’s resources were limited that they would be better off if they had economized. But it is difficult to persuade people to economise, especially when they are used to Keynes’s idea that the less we spend, the more unemployment we create.
Perhaps time and further study will some day reveal whose economic concept are right. But it would be splendid if economists were able to diagnose and prescribe cures for economic problems more accurately.
Economics and Its Great Men
| Text 1. Adam Smith |
Task 1. Sum up what you know about Adam Smith and his investigations
Task 2. Pronounce correctly the following words:
Economics, economy, economical, monopoly, competition, competitive, society, productivity, to export, to import, social, production, substitution, political, wealth, nation, industrialism
Task 3. Write out:
– from sentence 1, para 1 the group of words related to the word science;
– from sentence 1, para 5 the group of words related to the word ranged;
– the subject and the predicate in the last sentence, para 7.