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11.1Theeconomy

VocabularyEconomicissues

1Whatdoesthisquotationmean?Doyouagree?

‘Thegapinoureconomyisbetweenwhatwehaveandwhatwethinkweoughttohaveandthatisamoralproblem,notaneconomyone.’

PaulHeyne,Economicslecture

2Choosetherightwordtocompletethesesentencesabouttheeconomy

1Thecostoflife/livinginLondonissohighnowthatmanypeopleonlowincomes/revenuesfinditdifficulttolivethere.

2Insecurityinthejob/workmarkethasaffectedconsumerconfidence/trust.

3Thegovernmenthascutalotofpublicsegment/sectorjobsandcontractedtheworkouttoprivate/self-employedcompanies.

4Foreigninvesting/investmentinourmanufacturingindustryhashelpedeconomicgrowth/growingup.

5Theunemploymentratio/rateinsomepartsofthecountryisover20%andthebenefits/subsidythatthegovernmentpaystothejoblessisveryhigh.

6Abroad/Foreignimportsareincreasingandthecountrynowhasabigtradedeficit/shortage.

7Competitionandafree/openmarkethasbroughtpricesdownandhasincreasedpeople’sbuyingpower/ability.

8Thetaxburden/pressureoncompaniesissoheavynowthatmanyofthemaredelocating/relocatingtocountrieswheretaxesarelighter.

3Putthesewordsthatdescribetheeconomyinorderfromthemostpositive(++)tothemostnegative(--).

Stableboomingbuoyantdepressedhealthystagnant

++

-

1

2

3

4

5

6

4Whichbestdescribesyourcountry’seconomyatthemoment?Whatarethereasonsforitscondition?

5Howdoesthewelfarestateworkinyourcountry?

1Arethebenefitspaidbythestatetotheunemployed,thedisable,pregnantwomenandretiredpeoplegenerousornot?

2Doyouthinkthesebenefitsshouldbepaidbythestateorbyprivateinsurance?

READING6Readthearticleabouttherelationshipbetweengovernmentsandbigbusiness.Isitoptimisticaboutthisrelationship?Why?/Whynot?

FinanceWeekly,10September

Thenewphilanthropists

The19thcenturywastheageofcapitalism,the20thcenturysocialism.The21stcentury,itseems,willbetheageofcharity.But,asMrsThatchersaid,‘TheGoodSamaritanhadtoearnhismoneyfirst.’

WarrenBuffet,whenhemadeagiftof$31bntotheGatesFoundation,alreadyworth$29bn,jokedthathischildrenwouldhavetoworkfortheirliving–apartfromabilliondollarhandouttoeach.

Later,whenBuffettandGatesheldapressconferencetoannouncewhattheyintendedtodowiththeirfortune,itwasclearthatchannelingitthroughgovernmentwasnotanoption.‘BillandMelindawilldoabetterjobthan…theFederalTreasury,’saidBuffet. Insteadtheywould‘seekouttalenttodistributetheirmoneyjustastheysoughtouttalenttoacquireit’.

Forthesetycoons,whohaveprosperedinthefreemarketglobaleconomy,governmentandthepublicsectoraremonopolisticandinefficient.Governmentsmayhavebuiltthewelfarestateinthe20thcentury,buttoprovidethemwithfreecashtosupportthesestructures(schools,hospital,etc)wasnotontheiragenda.Insteadtheireffortswillbefocusedonalleviatingworldpovertyanddisease,andimprovingaccesstotechnology.

AdamSmith’s‘invisiblehand’,theeconomictheorythatthemarketwillrunsmoothlyifitislefttodecidewhatproductsaresoldandatwhatprice,hasbeentheguidingprinciplebehindglobalization.InAmericaithasproducedlargefortunesforahandfulofsuccessfulindustrialists:menwhonow,itseems,areturningtophilanthropy.

Opponentssaythatthefreemarketshowsnoregardforsocialconcernsandencouragespooremploymentandenvironmentalstanders.Wealth,theyargue,isnowconcentratedamongahandfulofglobalcorporationswhoseonlyaccountabletotheirshareholders.Theywouldliketoseegovernmentsputabrakeontheactivitiesofbigbusiness.

Butthepowerofgovernments,nationalandinternational,isdwindling.Thewelfarestatesofthe20thcentury,andthepublicsectorworkerswhostaffthem,areslowlybeingreplaced–ifnotbyprivatesectorprinciplesynonymouswithinefficiencyandwaste.

Atthesanetime,theagentsofinternationalgovernment-theUN,theIME,theWorldBankandtheEU-havesubsidizedtoomanyeconomies.Astheirreputationdeclines,theywillbereplacedbythecharityoftheprivatessector.

Childrenofthe60s,likeBillGates,haveexploitedthefreemarketruthlessly,butnowtheyarepreachingfreedomandlovearechoosingtogivebacktosociety.Theirheartsareintherightplace.Buttheyshareoneenemy-moderngovernmentinallitsforms.AsBuffettsaid,onlyafoolgiveshismoneytothetreasury.

Willsuchpeoplemakebetterworld?Whoknows?Buttheymeantotry.

READING1Readingthearticleonpage107againandchoosethebestanswer(A,B,CorD)toeachquestion.

1WareenBuffett’schildrenwill

A.notgetapennyfromtheirfather.

B.getajobwiththeirfather.

C.getabilliondollarseach.

D.havetoearntheirmoneyashedid.

2WhowillorganisethehandingoutofBuffett’sfortune?

BillandMelindaGates.

BillGatesandWarrenBuffett.

TheFederalTreasury.

PeoplespeciallyemployedbytheGatesandBuffett.

3Whatwillthemoneynotbespenton?

SchoolsandhospitalintheUS.

Helpingtheword’spoorpeople.

Helpingtheworld’ssick.

ProvidingInternetandcommunicationstechnologytomorepeople.

4Opponentsinthesixthparagraphreferstoopponentsof

Multinationalcompaniesandtheirshareholders.

Theeconomicsystemthathasproducedglobalization.

PhilanthropistslikeBuffett.

Thesmoothrunningofthemarket.

5Whatishappeningtogovernment,nationalandinternational,accordingtotheauthor?

Ithasbecometoopowerful.

Ithastoomanyagents.

Ithasbecomingcorrupt.

Itislosinginfluence.

6WhatdoesthephrasetheirheartsareintherightplacesayaboutpeoplelikeGatesandBuffett?

Moneyisnotsoimportanttothem.

Theyhavegoodintentions.

Theiractionsaredamaging.

Theyareledbytheiremotions.

2Findawordorphraseinthetextwhichistheoppositeofthefollowing.

1liveoffyourinheritance

2struggled

3supporters

4poverty

5becominggreater

6strengthened

3Doyourthinkthatrichphilanthropistscandoabetterjobthangovernmentsinhelpingtheneedyinsociety?

4Whichoftheseeconomicpointsofviewdoyouragreewith?

1‘Nosocietyeverprosperedbypunishingtherich.Theyaretheoneswhocreatewealthinourcommunitiesandraiseeveryone’sstanderofliving.

2‘Governmentsshouldnotworryaboutrich.Therichwillalwaysfindawaytolookafterthemselves.Itisthejobofgovernmenttolookafterthepoorinsociety.’

GRAMMARConditionals(Types1and2)

5Whatisthedifferenceinmeaningbetweenthesesentences?

1aIftheyraisetherateofincometaxfortopearners,thesepeoplewillprobablyleavethecountry.

2bIfraisedtherateofincometaxfortopearners,thesepeoplewouldprobablyleavethecountry.

2aIfearnalotofmoneyinmycareer,Iwillprobablyalsogivealottocharity.

2bIfIhadasmuchmoneyasWarrenBuffett,Iwouldprobablyalsogivealottocharity.

Conditionals(Types1and2)

Notetheformsofbothtypesofsentence.

If+present,…will+infinitive(withoutto)

If+past,…would+infinitive(withoutto)

.Weusethefirsttypeofifsentenceforsituationswhicharerealandpossible.

.Weusethesecondforsituationswhichareeitherunrealorimprobable.

6Decideiftheformsusedinthesesentencesarecorrectornot.Ifnot,correctthem.

IfIamtenyearsyounger,Iwillaskhertomarryme.Incorrect(×)

IfIamweretenyearsyounger,Iwillwouldaskhertomarryme

IfIseehim,Iwillcertainlygivehimyourmessage.

IfIknewtheanswertothat,I’dbearichman.

Ifyouweregoingtobelate,pleasewouldyoucallmeandletmeknow.

Ifyouareinmyposition,whatwillyoudo?

Wewillhavetolookforanothersupplieriftheycontinuetoraisetheirpriceseverythreemonths.

Iwouldn’tdoyourjobunlessIwaspaidafortune!

IfIhaveabetterknowledgeoffinance,Iwillcomewithyouifyoupromisetodothenegotiatingyourself.

SPEAKING

Socio-economicproblems

7Whichofthefollowingareproblemsinyourcountry?Decideiftheyareaseriousproblem,aslightproblemornotaproblem.

Problem

Serious

Problem

Slightproblem

Notaproblem

1Incomegapbetweenrichandpoor

2Anageingpopulationand/orpensionscrisis

3Over-dependenceonthewelfarestate

4Unemployment

5Shortageofkeyskillsorinadequateeducationsystem

6Heavytaxburden(onindividualsand/orcompanies)

Homelessnessorashortageofaffordablehousing

Poorheathdietorafailingheathservice

9Personaldebt

10Lackofinvestmentintransport,publicservice,etc.

1Discussthelistonpage109withyourpartner.Whatarethemainproblems?Whatisthegovernmentdoingaboutthem?

2Whatmorecouldtheydo?Useifsentencestomakesuggestions.

Ifthegovernmentincreasedtherateoftaxfortopearnersandreducedtherateforthelowestearners,thegapbetweenrichandpoorwouldbecomesmaller.

3Youarethinkingofrelocatingtoanothercountrytosetupasmallmanufacturingcompany.

1Makealistofthemostimportantfactorstoconsiderindecidingwhere.

2Compareyourlistwithapartner.

4Readthetext.WhatreasonsforrelocatingtoNicaraguadoestheauthorhighlight?

Nicaragua?

Yes,please!

Nicaraguaoffersadvantagesfewotherplacescanmatch.Thecostofliving,forexample,isafractionofwhatyou’reaccustomedtobackhome.Youcanemployafull-timemaidhereforabout$100permonth.Youcanseeamoviefor$2andgetyourhaircutfor$1.25.Twopeoplecanhaveanexcellentmeal,includingagoodbottleofwine,forlessthan$20.

Plus,thetaxburdenisverylight.AndasaforeignerqualifyingforNicaragua’sPensionadoprogram,youmaybeexemptfromimportdutiesonyourpersonalandhouseholdgoods;andbeallowedtobringavehicleintothecountrytax-freeonceeveryfiveyears.

Andifyouarelookingtostartabusiness,fewplacesofferbetterincentivesthanNicaragua,whichrecentlypassedtourismLaw306.Thislawallowsyoutoopenatourism-relatedbusinessand(1)paynotaxesfortenyearsand(2)bringin(orbuylocally)allthesuppliesyouneed,fromfurnitureboatstolinensandcashregisters…alltax-free.Year-roundsunshine.

ThesearetheprimaryreasonswehaveinvestedinNicaragua.Thenumbersandthetrendsarejusttoogoodtopassup.Butthesefactsandnumbersdon’tbegintotellthestoryofthelaid-backatmosphereandnaturalbeautyofNicaragua,andofLakeApoyoinparticular.

Nicaraguaisanexoticland,wherethesunshinesalldaylong,onruggedmountainsandtropicalrivers,colonialcities,friendlyandlivelypeople,andthelargestbodyoffreshwatersouthoftheGreatLakes(withtheworld’sonlyfreshwatersharks).

Asthepublisherofanewsletterthatinvestigatestheworld’sbestplacestotravel,buyrealestate,invest,liveandretire,IknowthattheopportunitytogetinonthegroundfloorofaplacelikeNicaraguadoesnotcomealongveryoften.

5Whatismeantbythesephraseinthetext?

1Advantagesfewotherplacescanmatch

2Exemptfromimportduties

3Toogoodtopassup

4Thelaid-backatmosphere

5Getinonthegroundfloor

LISTENINGRelocationexperience

6.11.1Listentothesefivepeopletalkingabouttheirexperiencesofrelocatinghomeorbusiness.

.Thefirsttimeyoulisten,indicateth

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