Unit 5 Central Control of the Economy

In states which have a communistic system, private property and private enterprise are reduced to a minimum. They exist, but are limited to a small area of the economy. Karl Marx conceived of a world in which there would be no private property whatsoever. Communism in theory states that all property should belong to the State. In practice, however, the citizens of state like Cuba are permitted to have personal effects.

The important thing about the communist system is its central planning. The State organizes the whole economic effort of the nation. A central authority with complete power decides what goods and services will be produced. The authority decides what quantities of goods will be produced, and also controls their quality, deciding how they will be distributed and what prices will be charged for them. In addition, the State provides all (or most of) the services which the citizens require. It is responsible for the economy, and is therefore concerned with methods of production as well as with quality and quantity. The national economy must be planned ahead over a number of years.

A Marxist economy is planned. The system is related to the needs of the State as a whole, not to the needs of the private person. The emphasis is on collective effort and not on personal effort, so that the individual is subordinated to the needs of the collective State.

Exercise 1. Answer your questions, basing your answers on the text.

1. What two things are greatly reduced in a communistic system?

2. What area do they occupy in the economy?

3. What did Karl Marx proposed about private property?

4. What is the theoretical communist view on property?

5. What is the position in practice?

6. What does the state do in the communistic system of central planning?

7. What two decisions does the central authority make?

8. What does the authority control?

9. What can the authority do about prices?

10. What is the state responsible for and what must it do?

Exercise 2. Say whether these statements are true or false, and if they are false say why.

1. Private property in a capitalistic state is reduced to a minimum.

2. Karl Marx wanted a world in which there would be no private property.

3. Communist theory and practice are not exactly the same as regards property.

4. Central planning by the state is an essential part of the communistic system.

5. The central authority decides on the quantity, quality, price and place of sale of any commodity.

6. The central authority is responsible for the economy but is not concerned with methods of production.

7. The word "Marxist" is very similar in meaning to the word "communist".

8. Marxism is concerned with the needs of the private individual.

9. Collective needs are more important in a communist state than the needs of the individual.

Exercise 3. Make these sentences passive, omitting the agent phrase.

EXAMPLE: The government reduced private property to the minimum.

Private property was reduced to the minimum.

1. The government limited private enterprise to a small area in the economy.

2. They permit the citizens to have personal property.

3. The workers will produce only essential commodities.

4. That factory produced a large quantity of shoes last year.

5. You will charge more money for these services.

6. The central authority must plan the economy over a number of years.

7. The authorities provided large number of workers for the ten new factories.

8. The government reduced the quantity of shoes produced in tat factory.

9. The State organized the whole economic effort of the nation.

10. The central authority has planned the whole economic programme for the next five years.

Exercise 4. Combine these pairs of sentences, using what and would.

EXAMPLE: This quantity of goods will be produced. The planners decided it.

The planners decided what quantity of goods would be produced.

1. These goods and services will be produced. The central authority decided it.

2. These prices will be changed for the goods. The planners decided it.

c. This quality will be most suitable. The government considered it.

d. This commercial activity will be useful in the next few years. The planning authority decided it.

e. These changes will be made in the organization of the factory. The employers and employees discussed it.

f. These conditions will affect the national economy in the next twenty years. The economists considered the matter.

Exercise 5. Change the listed adjectives into adverbs (-ly or -ally as necessary) and put one adverb in each sentence in order to make sense. Some adverbs can operate successfully in more than one sentence, but each has a letter to indicate the best choice.

EXAMPLE: great – greatly

Their private property was ___ reduced.

Their private property was greatly reduced.

careful (b) scientific (e) considerable (h) usual (j)

rapid (a) systematic (c) regular (i)

clear (f) profitable (g) complete (d)

1. New government worked ___ to change the laws.

2. The central authority ___ controls the quality and quantity of goods.

3. The state ___ plans the economic efforts of the citizens.

4. The economic system changed ___ over the thirty year period.

5. Work in economics should always be done ___ .

6. Their economic system is ___ capitalistic.

7. The employers will ___ discuss the use of new machines in the factory.

8. The city has changed ___ in the last few years.

9. These men work ___ from 9 o'clock till 5 every day.

10. In a free economy there is ___ very little central planning.

Now make up your own sentences with these adverbs.

Exercise 6. Put prepositions in the blanks of these sentences.

EXAMPLE: The central authority is concerned ___ methods of production.

The central authority is concerned with methods of production.

1. His capital was finally reduced ___ nothing.

2. They charged quite a lot of money ___ that commodity.

3. The government is usually responsible ___ the people ___ the conditions of the national economy.

4. Citizens are required to conform __ the law.

5. He agreed ___ the other economists that the system was unusual.

6. He was paid well ___ the government ___ the work he did.

7. The people hoped ___ a reduction in the price ___ essential goods.

8. That man subscribed __ a number of important newspapers and magazines containing information ___ economics.

9. The consumption ___ coal and steel has increased greatly ___ resent years.

10. They have provided many services ___ the citizens ___ that town and do not charge very much ___ the services.

Exercise 7. Combine these pairs of sentences, using which.

EXAMPLE: That is the garage. In that garage the new car is kept.

That is the garage in which the new car is kept.

1. Economics is a science. In that science everything must be studied in an objective way.

2. Cuba has a system. In that system central planning is very important.

3. The USA has an economy. In that economy government planning is limited to quite a small area.

4. Marxism proposes a special economic system. In that system collective needs are more important than individual needs.

5. The British have a certain way of life. In that way of life private enterprise and private ownership of property are very important.

6. The Americans and the British have separate ideologies. In these ideologies there are many similar points.

Exercise 8. Combine these groups of three sentences using would and should. The table shows the relations between will/would and shall/should in sentences of this type.

	direct statement	indirect statement
simple future	will	would
obligation	shall	should

EXAMPLE: These goods and services will be produced. These prices shall be charged. The central authority decided these things.

The central authority decided what goods and services would be produced, and what prices should be charged.

a. These prices will be charged for the commodity. This quality shall be made available.

The planners discussed these things.

b. This quality will be most suitable. This quantity shall be produced.

The government considered these things.

c. These conditions will affect the international economic system in the next ten years.

These plans shall be adopted. The economists could not agree on these things.

d. These changes will be made next year. These crops shall be grown.

The farmers decided these things.

e. These changes will be made in that factory. These wages shall be paid to the workers for the next two years. The employers did not discuss these things.

Exercise 9. Make these words negative by adding the prefix in- and altering it to suit the consonant which follows.

(a) legal – in + legal – illegal

(b) probable – in + probable – improbable

(c) regular – in + regular – irregular

a practical b possible c regular d mobile e proper

f rational g legible h logical i personal j relevant

Make up your sentences with these words in negative form.

Exercise 10. The table shows how words are formed around the verb produce . List all the words you can make from the table and use them in suitable blanks in the sentences.

produc	e	r
	t	iv(e)	ity
		ion

1. The company ___ a new commodity every year.

2. The company's newest ___ is a special blue soap powder.

3. The ___ of soap powders met last year to discuss price.

4. That factory is not as ___ now as is was five years ago.

5. The ___ of that factory has gone down over the last five years.

6. The manager of the factory has decided that they must increase their ___ of packets of soap powder.

Exercise 11. This table shows how certain nouns can be formed from certain adjectives, as for example, activity from active. Make a list of the nouns and put each word in its suitable place in the sentences. NOTE the loss of the letter e in active, secure, mobile and productive.

active equal secure complex mobile liquid

ity

solid regular productive similar rapid

ity

1. The system was complex. Its ___ surprised them.

2. The movements of the products in the factory was rapid. The ___ of the work surprised them.

3. People who have cars are very mobile. This ___ is a useful thing.

4. The National Bank has a solid reputation. Its ___ in money is similar to the ___ of the buildings.

5. The national economy, like a man, should be active. Its ___ is a sign of its health.

6. Your money is secure in the National Bank. Its ___ is important both to you and to the bankers.

7. The workers in those factories are very productive. Their ___ is very useful to the national economy.

8. Those men arrive regularly at nine o'clock. Their ___ is well-known.

9. The American and British economic systems are very similar. This ___ is not surprising.

10. Those two men earn equal sums of money. They have ___ in wages because they produce the same quantity and quality of goods.

11. The exchange of money should be as liquid as possible. The ___ of money helps the economy to grow.

Exercise 12. Write about 300 words on the topic "Economic Systems". Use the material in the texts and exercises.

Essential Vocabulary

1. be reduced бути зменшеним, зниженим; скороченим

2. comprise містити в собі, вміщати, охоплювати

3. charge the price for призначати, правити, вимагати (певну) ціну за

4. central authority центральна влада

5. personal effects особисте майно, особисті речі людини

6. the liquidity of money ліквідність грошей