Task 4. You are going to read about three persons expressing their views on the winners and losers in the Russian economic reforms. As you read, make notes in the table.

Speaker 1: Well, in my view the only real winners have been the big business people – especially in the early days after the fall of the old system. I mean if you were in the right place at the right time you made a fortune. But what about the ordinary people? The truth is that for most of us things have got worse. Inflation is still high. In the early days lots of older people saw their life’s savings disappear overnight. Education and the health service are also in a mess. Teachers’ and doctors’ pay has really fallen – lots of doctors have left to make a living somewhere else. No, I don’t think ordinary people have been the winners.

Speaker 2:With the rise in oil prices Russia’s energy sector has really grown. I mean our resources of oil and gas are some of the biggest in the world and the new economic reforms have helped us to exploit that. At the same time, though, Russia’s other manufacturing industries have suffered. For example, we used to have a huge transport industry making aeroplanes, cars and ships – but this has almost collapsed. You see these industries used to be subsidized by the Soviet government. They were never able to compete on the world market. And now their equipment and other capital is old and inefficient. So in truth these industries are dying.

Speaker 3:The new economic reforms have been great for the big Russian cities – especially Moscow. They’ve got new shopping centres and expensive shops and new supermarkets. And of course there are lots more tourists visiting those places. But if you go out of Moscow and go to the other regions of Russia things are very dif. Foreign investment goes mostly to Moscow or St.Petersburg – but in the provinces very little has changed. There are still a lot of ‘one-factory’ towns and there is still a lot of poverty.

Text 2. Economics and the Consumer Society

Task 1. Read and translate the text.

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