Vocabulary Study

Explain the meaning of the following words and word-combinations as they are used in the texts. Translate them into Russian:

shares	in abundance
fair competition	sophisticated technology
a business venture	the supply side of the market
to live up to principles	to provide benefits or incentives
a frontier hero	to keep pace
to be seen on a par	a system of international monetary exchange
to be marred by	to enact protectionist legislation
relocation of workers	real estate prices

Reading

Read the passages about the US economy. Be ready to summarize them and answer comprehension questions.

American business

There exist in the United States two main kinds of business institutions – private and governmental. Private businesses include large companies whose capital is represented in shares which are held by individual shareholders who earn dividends from their shares. In addition, there are non-profit institutions. These are called charitable organizations.

Americans tend to have more respect for private businesses than for government agencies which they consider more bureaucratic.

Americans also believe that it is in private business that the American ideals of free competition, individual freedom and equality of opportunity have their highest level of expression. Most Americans see competition as the major source of progress and prosperity. There has always been a belief that only fair competition based on hard work and a high level of competence ensures success; and vice versa, if a competitor does not play fair and takes unfair advantage of his customers, he will lose out in the long run.

But these ideas are not always adhered to in the everyday conduct of business. In the highly competitive world of American business it sometimes turns out that unfair practices violate lofty principles.

There is one more problem in realizing the high ideals of fair business practice. This is, that if at the time of the early settlements of America conditions for starting a business were, at least in theory, relatively equal for everyone, such may no longer be the case. It is obviously easier for someone who already possesses considerable capital to begin a business venture than it is for someone who does not.

Thus, though the majority of Americans believe that the ideals of free competition, equality of opportunity, hard work, and individual freedom are all exemplified throughout business, there are many who understand that very often American business does not live up to these principles.

The entrepreneur is the symbol of hero businessman who succeeds in creating something out of nothing. The men who built the initial industrial riches of the nation, such as the railroads and oil refineries, were usually entrepreneurs. They often started with few resources and wound up as wealthy heads of huge companies. They were likened in the American mind to the frontier hero who turned the vast wilderness of the United States into farms and towns. The entrepreneur was seen on a par with the frontier hero who through his boundless energy, shrewdness and diligence paves the way for the well-being of the nation while making his own fortune. Another characteristic that endeared Americans to the entrepreneur type was his love of individual freedom and complete independence from authority, a trait that has always been highly valued by Americans.

In the course of time as business matured, a new type of businessman appealed. This is the so-called “organization man” who works within an already established structure. The “organization man”^: however, does not enjoy the heroic status of the entrepreneur because he usually takes over something that was built by other people. The organization man lacks in romantic appeal by comparison with the entrepreneur because even when he is at the top he is not seen as "his own boss" since with the advent of large corporations with boards of directors he or she shares responsibility with others.

Though in America today the road to success lies often through established large businesses, the entrepreneurial ideal continues to inspire many. Perhaps partly because of this a great number of small and medium-sized businesses exist in the United States today. Often when one fails, another comes, to take its place. There are numerous companies with fewer than 20 employees. These companies account for about 60 percent of American business.

The image of the American businessman was seriously marred by the Great Depression of the 1930s. Before the 1930s businessman had dominated the American economy. But during and after the 1930s they were forced to share power with the national government, particularly with federal regulatory agencies. Today most Americans, even with their ideals much shaken by the Depression and subsequent business scandals, still believe that the free-enterprise system of tough pragmatism based on profit-making is the one that best promotes the welfare of the nation.

(from “What it is like in the USA”)

Comprehension Questions:

• Who can be called a shareholder?

• What is a charitable organization?

• What is the attitude of Americans towards competition?

• Did American ideals of fair competition and equality of opportunity always prove realistic in practical life?

• What is understood by an “entrepreneur”?

The United States in World Trade

Market demands are met through increased world trade. The interdependence among trading nations has provided increased busi­ness opportunities. The United States is actively involved in world trade.

International trade develops because certain countries are able to produce some goods more efficiently than other countries. They exchange goods to satisfy their needs and wants. Efficient production may be the result of several factors. A certain climate in a particular country may allow that country to grow agricultural products in abundance. For instance, the climate in the United States is suitable for production of large amounts of wheat. Though there are consid­erable oil resources in the United States it prefers to import large quantities of oil for economic reasons.

Countries with a large pool of unskilled laborers are able to produce products which are labor intensive more cheaply than countries with highly paid, skilled labor forces. So, some designs of machines and even sophisticated technology are sent to Malaya, China, or other eastern countries where goods are produced on the basis of American models.

The Scottish economist, Adam Smith (1723–1790), theorized that in a free market countries produce whatever they can most efficiently grow or manufacture, or what is of the greatest advantage to them. So, competition guarantees that countries import products which are most efficiently produced abroad and export products which are most efficiently produced domestically. Price is determined by the supply side of the market.

There are several reasons why the US government tries to control the imports and exports of the country. One reason is that a country enjoys an advantage if it exports more than it imports. So US government has specialized programs to encourage exports. They are programs that provide marketing information, establish trade missions, subsidize exports, and provide benefits or incentives.

Dumping is selling on a foreign market at a price below the cost of production. Just like other governments, the US government takes measures against such practices. Particularly in times of trade imbal­ances there is a great deal of pressure from manufacturers on the government to enact protectionist legislation to protect American manufacturing from foreign competition. Today, one of the greatest dangers for American car manufacturers lies in the import of foreign cars, mostly Japanese, which are smaller in size than American cars, and thus cheaper to manufacture and more fuel efficient. Some believe that the workmanship in Japanese cars is better. Others think that American cars are less competitive because of inferior design and corporate management.

While America is seen as one of the richest countries in the world, the fact that America imports more than it exports means that the profits of the manufactured goods sold go into the pockets of the foreign manufacturers.

As those profits are reinvested into capital goods, equipment and manufacturing methods, the foreign companies are able to sell then-products for less money than similar American firms. The result of this process was for American firms to reduce their production and workforces so as to keep pace with the cost of their goods as dictated by demand. This slowdown in manufactured growth caused a chain reaction in the marketplace that forced many families to seek employ­ment in the non-manufacturing area.

What has now happened is the relocation of workers who have had to develop alternative businesses that are safe from foreign competition. As in the previous business cycles, American business people are creating new businesses especially in the export of American goods and equipment to the international market.

In order to import and export products, there needs to be a system of international monetary exchange. Currencies are exchanged one for another, and there are no fixed exchange rates. These rates fluctuate according to market forces. The amount of money that goes in and out of a country is referred to as the balance of payments. If a country is exporting more than it imports, it is receiving foreign currency and has a balance of trade surplus. If it is importing more than it exports, it is sending money out of the country and has a balance of trade deficit.

Wall Street in New York and the Fifth Avenue are places which largely hold control of US commerce and finance. The people who work there are employed by great banking houses, such as J. P. Morgan, or giant financial companies like Merrill Lynch. They handle enor­mous sums of money every day. The savings of millions of Americans are also in their hands. Computers work feverishly sending money around the world.

Many Americans are not too happy about leaving their money in the bank. They want to see it grow as fast as possible. That's one reason why many people spend as much money as they can on buying or improving their homes. They know real estate prices rise faster than anything else.

The life of Americans, just like in any other country, is very much dependent on the overall condition of federal and state finance. Thus many people are becoming more knowledgeable in financial matters so that they can provide a prosperous future for themselves.

(from “What it is like in the USA”)

Comprehension Questions:

• What is generally meant by a “market”?

• Why does the US government encourage exports?

• What is the purpose of protectionist legislation?

• Why do many American families seek employment in the non-manufacturing areas?

• What is understood by a balance of trade deficit?

• Why do many Americans want to spend money improving their homes?

Practice

Using your background knowledge and information from US newspapers and the Internet, prepare a report about the Global financial crisis of 2008–2010. Discuss its consequences with your classmates.

Discussion

Comment on the following quotations:

1. Business is like a bicycle. Either you keep moving or you fall down (John David Wright, President, Thompson Products, Inc., Cleveland, Ohio).

2. All people are ordinary. I learned that all men are created equal. The rich boy has money but no initiative. The poor boy has no money. Initiative will get money. This is the thing every kid should be told when he first comes to America (S.B. Fuller, successful black businessman).

3. The American dream is to be better off than you are. How much money is “enough money”? “Enough money” is always a little bit more than you have (Jay Slabaugh, business consult).

Role-Play

Roleplay the following situation:

The company Sandy has been working for has been taken over by a large company. This takeover will involve changes in the number of employees. Some of her present co-workers will be replaced by newcomers. Sandy is afraid of losing her job, and she desperately wants to continue working for the new company. After a long debate with herself, she decides to talk to her supervisor in order to convince her that she is just the sort of worker who should be kept on.

Section 5. THE RUSSIAN-AMERICAN PARTNERSHIP