Suport de curs - engleză

UNIT 7: „THE INVISIBLE HAND OF THE MARKET”

I. Read and learn:

„By following their self-own interest in open and competitive markets, consumers, producers and workers are led to use their economic resources in ways that have the greatest value to the national economy – at leas in terms of satisfying more of people’s wants. The first person to point out this fact in a systematic way was the Scottish philosopher Adam Smith, who published his most famous book An Inquiry into the Nature and Causes of the Wealth of Nations, in 1776. Smith was the first great classical economist, and among the first to describe how an economy based on a system of market could promote economic efficiency and individual freedom, regardless of whether people were particularly industrious or lazy.

Smith argued that if people are naturally good and kind, a market economy offers them a great deal of economic freedom to carry out their good deeds, backed up by an efficient system of production which generates more material goods and services for them to use in doing those good works. But what if people are selfish, greedy or lazy?

Anyone who wants to enjoy more of the material goods and services produced in a market economy faces strong economic incentives to work hard, spend carefully, save and invest. And most successful businesses have to produce good products, sell them at market prices, pay their employees market wages, and treat their customers courteously –even if that isn’t their natural way of doing things.

The basic reason for that kind of change in some people’s behaviour is competition. As Adam Smith pointed out, when there are several butcher shops in a community, any butcher who is rude or tries to sell inferior meat at unreasonable prices soon looses business and income to other butcher shops. (…) the more a greedy or selfish butcher wants to enjoy a higher standard of living, the more he or she will try to meet the competition and build up a large base of satisfied customers. Or, as Smith described this feature of market economies, people are led: ‘as if by an invisible hand’ to work and behave in ways that use resources efficiently, in terms of producing things that other people want and are willing to pay for, even though that may have not been part of their original intentions”.

One other factor must be at work for Smith’s invisible hand to function properly: the butcher must own or rent the shop, so that he or she has the rights to its profits. Without this right to private property and to the profits it brings, the invisible hand of competition will not motivate business to offer the best and most varied products at reasonable prices.

By decentralizing the control of economic resources – letting individual producers decide what and how to produce to satisfy their customers – competition and self interest insure that most resources available in a market economy are used efficiently, which is to say in their most valuable uses as directed by what consumers demand and buy”.

II. Find words in the text that have the same meaning as the following ones:

To warrant; hard-working; avaricious; thoroughly; well-known; to benefit; wisely; to put aside; income; characteristic; to provide;

III. Answer the following questions:

1. Who wrote An Inquiry Into the Nature and Causes of the Wealth of Nations?

2. What is the role of competition in a market economy?

3. Can you name the main features that make a market economy different from a command one?

IV. Focus on Grammar:

A. Indefinite Pronouns and Adjectives (Pronumele si adjectivele nehotarâte)

B. Past Tense Simple (Trecutul Simplu)

A.: Pronumele si adjectivele nehotarâte “some”; “any”, “no”, “every” si compusii lor

Propozitii affirmative (+) Propozitii interrogative (?) Propozitii negative (-)

Some- ceva, niste, câtiva, câteva, unii, unele

Any- orice, oricare Any – ceva, niste, câtiva, câteva, unii, unele

Some- ceva, niste, câtiva, câteva No- nici un, nici o, un fel de, deloc

Any- nici un, nici o, nici un fel de

Compusii lui “some”, “any”, “no”, “every”

body one thing where

some Somebody –cineva (+?) Someone - cineva

(+?) Something- ceva

(+, ?) Somewhere- undeva (+?)

any Anybody – cineva (?)

- nimeni (-)

- oricine (+) Anyone – cineva (?); nimeni (-); oricine (+) Anything – ceva (?), nimic (-), orice (+) Anywhere- undeva (?); nicaieri (-); oriunde (+)

no Nobody- nimeni (-) No one – nimeni (-) Nothing – nimic (-) Nowhere- nicaieri (-)

every Everybody –fiecare, toti, toata lumea Everyone - fiecare, toti, toata lumea Everything - totul Everywhere- pretutindeni

Ex: There is some coffee in the cup. (adj. nehotarât)

Some of those students are our friends. (pron. nehot.)

Ask somebody about it. (pron. nehot.)

Can you tell me something about it?