Collectivism. In the twentieth century a new economic order grew up, which is known as collectivism. Collectivism is the system whereby economic decisions are taken collectively by planning committees and implemented through direction of resources either centrally or at local level.
Under this system planning committees are appointed and they provide the answers to our three central questions. Thus committees take the decision on whether, for example, more cars or more tractors should be produced. They solve the «How?» problem by directing labor and other resources into certain areas of production and, at the end of the day, they decide the «For whom» problem not by pricing but by allotting goods and services on the grounds of social and political priorities.
The mixed economy. By a mixed economy we mean one in which some economic decisions are taken by the market mechanism and some collectively. To this mixture we might also add a dash of tradition and command. When we use the term mixed economy it is usually applied to economies where there is a significant component of both collectivism and free enterprise.
Despite the wave of privatization in the UK significant economic decisions are still taken collectively. Education, health care, defense and social security remain in the section of the government. In the UK 40 percent of all expenditure is undertaken by the state. In countries such as the Netherlands and Sweden over 60 per cent of the economy is state-directed.
We study economics in the belief that through understanding we will be able to increase the wealth and welfare of society, and with the conviction that knowledge is better than opinions, analysis better than supposition. What we understand about economics is terribly important; it influences us all. We can put this need no better than it was put in 1936 by John Maynard Keynesin the closing words of the most influential economics book of the last century: The General Theory of Employment, Interest and Money.
Management of the economy. Whatever political party is in power three main objectives of policy are pursued: control of inflation, reduction of unemployment, and promotion of economic growth. These objectives are not in dispute; they are concerned with the good housekeeping of the economy. Different governments may, however place different degrees of importance on individual objectives.
IX. Обсудите с однокурсниками следующие вопросы и выскажите свою точку зрения по ним:
1. Which definition of economics do you think the best? Why?
2. What are the peculiarities of a mixed type of economy?
3. What are the main objectives of economic policy?
X. Прочитайте шутку и перескажите ее по-английски от третьего лица.
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