Read the text The planned economy

London loses its beautiful red buses

Word origin

Read the article without a dictionary, try to retell it.

At leisure

Volume: a roll of papyrus

In ancient days books were written on papyrus. The sheets were pasted together and «rolled» a stick for con venience in handling and filling away. This process is contained in our word VOLUME, from the Latin word VOLUMEN, which in turn derives from VOLVO, mean ing «turn about» of «roll». There were said to have been more than 700,000 of these papyrus VOLUMES in the ancient Alex andrian library in Egypt, con taining most of the literary treasures of antiquity, but subsequently the library was destroyed by barbarian invasions.

2. Read and translate the proverbs, think of Russian equivalents, give
a situation using them.

— The chain is no stronger than its weakest link.

— Strike while the iron is hot.

3. A glimpse of Great Britain

In December 2005 the last Routemaster bus was retired. Routemaster is the name for the classic red London bus. It is red, has two decks and an open platform on the back. The first Routemaster took to the London streets in 1954, and served the public for more than fifty years. It had a revolutionary design: special brakes, a light aluminium body, and power-assisted steering. Because the platform on the back was open, passengers could easily get on and off the bus. The driver didn’t need to open doors, but he did need to look carefully in his mirrors, to see if anyone was about to get on or off. Of course, because the driver sat in a separate compartment, the bus needed a conductor. There was a special place for the conductor near the platform. He communicated with the driver using a bell system. The stairs to the upper deck were very steep and the conductor (and the passengers) had to climb them while the bus was in motion.

The Routemaster has been replaced by «bendy buses» (buses with two sections connected in the middle, like in Moscow). Some Routemasters 32

will still be used for special tourist routes and can be hired for wedding parties. You can buy one for about 10 000 pounds.

Unit 5

Pre-text exercises

1. Find the transcription of new words in a dictionary, try to read
them fluently: unfortunately, strength, restaurant, afford, commodity,
equal, century, drawback, indicate, warn.

2. Word-building
Compile and translate:
Produce υ. + - tion →
Govern υ. + - ment →
Strong a. + - th →
Grow υ. + - th →

In many ways, the planned economy is the direct opposite of the market economy. In the market economy, the forces of supply and demand decide everything: what is produced, how much is produced, the methods of production and the price. In the planned economy, all of this is decided by the government. In every way when the market economy is free, the planned economy is controlled.

Unfortunately, no economic system is perfect. If there was a perfect system, economists wouldn’t have anything to argue about! Market economies have their strengths, but they have their problems, too. Planned economies try to provide solutions to these problems. For example, the free market supplies the things that people want. However, what people want and what they need are not always the same. Fast food is always in demand, but it’s bad for us. In a planned economy, the government could decide to stop fast food restaurants operating in the market.

A second problem with free markets is that producers always want the highest price. Often the poor can’t afford things. In a planned economy, the government sets prices. They make sure that everyone can afford basic commodities. This is one way that planned economies try to share things equally. Another is to control how much people get paid.

In a planned economy, workers’ wages depend on the service they provide to society. If people can live without their service, you get paid less. This is very different from the free market. In the free market, someone’s salary mostly depends on the demand for his or her work. If people like what you do, you get paid more.

Before 1900 there were few examples of planned economies. During the 20th century, however, the planned economy became the standard for socialist governments like the USSR and China. These countries experienced amazing economic growth in a very short time. In a market economy, it takes a long time for big industries to grow from small companies. In a planned economy, however, huge industries can grow overnight. The government simply decides to spend money on factories and factories appear. Britain, for example, took centuries to develop its steel industry in a free market economy. China developed its in a few decades.

But, as we said, no economic system is perfect. The planned economy has many drawbacks. One of these drawbacks is problems with supply. It is difficult for governments of planned economies to know exactly how much to produce to meet demand. In a market economy, when the price of a commodity rises, this indicates a rise in demand. Companies then supply more to the market. This warning system doesn’t work in a planned economy because price is controlled by the government. The result is shortages.

When shortages happen, governments can do two things: ration goods or raise prices. In this situation, people then start to hoard things, and the problem gets even worse. As the population gets bigger, shortages like this become more common. For this reason, China – once the world’s biggest planned economy – is rapidly moving towards another system: the mixed economy.

Words:

planned economy — плановая government — правительство

экономика unfortunately — к сожалению

to argue — спорить commodity — товар

fast food — еда быстрого wage — зарплата

приготовления shortage — нехватка
to be sure — быть уверенным

Post-text exercises

Working on the text.

I. Find answers in the text:

I. By whom are the forces of supply and demand controlled in the
planned economy? 2. Is there any perfect economic system? 3. Are there
any problems in the planned economy? 4. Is fast food healthy enough for
people? 5. On what do workers` wages depend in the planned economy?

6. What countries had the planned economy during the XXth century?

7. Why did Britain need centuries to develop its steel industry and China did it in a few decades? 8. Are there any drawbacks in the planned economy? 9. Is price controlled by the government in the planned economy? 10. In what period of time did socialist countries manage to get great economic growth?

II. Complete the sentences as in the text:

1. If there was a perfect economic system, economists… 2. The planned economy tries to share… 3. In a planned economy workers` wages depend on… 4. In the XXth century the planned economy became … 5. Britain took centuries to … 6. It is difficult for governments of the planned economy to know…

III. Match the words and phrases with the definitions.
1. commodity	A when the government sets a limit on how
	much people can buy of something
2. standard	B when there is not enough of something
3. socialist	C a strong metal made from iron
4. industry	D something you can buy or sell
5. steel	E what is usual or typical
6. indicate	F all the businesses and companies involved in
	the production of heavy goods, food,
	technology, etc.
7. warning system G describes someone / something aiming to
	share wealth equally
8. shortage	H secretly storing and hiding goods for use
	later
9. rapidly	I work
10. ration	J show

11. solution K very quickly

12. hoard L money paid regularly for work done

13. operate M answer to a problem

14. wages N a system which tells us that something bad

is going to happen

IV. Now read the text again and decide whether these statements
are true or false.

1. In a planned economy, the government decides how products are made.

2. In a planned economy, suppliers can sell anything that is in demand.

3. In a planned economy, a doctor should get paid more than a footballer.

4. Planned economies grow more slowly than market economies.

5. In a market economy, greater demand for something makes it cheaper.

6. Planned economies are difficult to run in countries with large population.

V. Say what you have learned about:

— Planned economy

— Government sets prices

— Workers` wages in the planned economy

— Industrial growth in the planned economy

— Drawbacks of the planned economy

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