Тема 11

What Is International Trade?

When Honduras exports bananas to Switzerland, they can use the money they earn to import Swiss chocolate — or to pay for Kuwaiti oil or a vacation in Hawaii. The basic idea of international trade and investment is simple: each country produces goods or services that can be either consumed at home or exported to other countries.

The main difference between domestic trade and international trade is the use of foreign currences to pay for the goods and services cross­ing international borders. Although global trade is often added up in U.S. dollars, the trading itself involves various currencies. Japanese videocassette recorder is paid for in German marks in Berlin, and German cars are paid for in U.S. dollars in Boston. Indian tea, Brazilian coffee, and American films are sold around the world in currencies as diverse as Turkish liras and Mexican pesos.

Whenever a country imports or exports goods and services, there is ii resulting flow of funds: money returns to the exporting nation, and money flows out of the importing nation. Trade and investment is a |two-waystreet, and with a minimum of trade barriers, international tradeand investment usually makes everyone better off.

In an interlinked global economy, consumers are given the opportunity to buy the best products at the best prices. By opening up markets, a government allows its citizens to produce and export those things they are best at and to import the rest, choosing from whatever the World has to offer.

Some trade barriers will always exist as long as any two countries have different sets of laws. However, when a country decides to protect its economy by erecting artificial trade barriers, the result is often damaging to everyone, including those people whose barriers were meant in protect.

ТЕМА 12

THE WORKING OF LOCAL GOVERNMENT

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Part I

Local councillors are elected for four-year terms, and in May of every year some local elections take place. For the counties and some districts the complete councils are elected at four-year intervals, hut for other districts including most of those which are big towns and for metropolitan boroughs the elections are phased so that only one-third of the councillors are elected together in each year.

Each councillor represents a ‘ward’. Within each council’s area the wards are supposed to be as far as practicably equal in population, so their boundaries have to be revised from time to time There is no proportionality in the voting; as with the House of Commons the candidate with most votes wins the seat. In rural districts several small Parishes may together form a ward; a big town is divided into many wards.

In most local elections only about half of the people use their right to vote, and voting is dominated by the national parties. For some councils, including those of most inner London boroughs and big northern towns, every election leaves Labour with an absolute majority of the seats, others are permanently Conservative.

Every local council has its presiding officer, chosen by the whole council for one year only. In metropolitan and London boroughs the presiding officer has the title Mayor or Lord Mayor: so too in those districts which are called ‘boroughs’ or ‘cities’. in other districts, and in counties, the presiding officer is called ‘chairman. A mayor or lord mayor is surrounded by some colourful ceremonial as the town’s first citizen.

Part II

All local councils work through committees. Each council has a committee for each of the main sections of its work; for example the general management of the schools in a county or a metropolitan district is under the control of the education committee of the county or district council. Some of the committees consist only of members of the council (with the public represented in the same proportion as in the whole council), and some of them have in addition a few co-opted members, i.e. people who do not belong to the council but have been chosen to assist the committee with their special knowledge or other qualifications. For very important matters the committee can only recommend to the council what is to be done, and the decision is made by the council in general session. Meetings are normally open to the public.

The local authorities appoint their own staffs. At the middle and higher levels of the local government service the local government officers arc usually ready to move from one place to another, and it is often necessary to move in order to get promotion. The appointment of the local councils staffs is supposed to have nothing to do with politics, though inevitably politics may have something to do with some of the top appointments. If the political majority of a council changes as a result of an election, it is not to be expected that there will be changes among the professional staff as a result.

The chairman of a committee (for example, on social services or education) has to work closely with the departmental chiefs and senior officers. Individual problems and matters of detail tend to be settled by the officers, though members of the public can try to get their ward councillors to intervene. Officers’ decisions, like those of civil servants, have to agree with the main policies laid down by their committees.

If a single party dominates the council, it may give the chairs — of all the committees to its own party members. A committee chairman also works closely with elected councillors who belong to the same party. Both for committee business and for general council business there may be private party meetings at which the party’s position is decided, and strict discipline is imposed on party members. Party discipline is often very strong in councils with Labour majorities, and in some cases the Labour councillors meetings are the main power centers.

Most local expenditure goes on services which councils arc required by law to provide, though they provide other services too. Part of the money needed is given to them in the form of grants from the central government, fixed by complex formulae and paid for out of national tax revenues. After 1983 the Government took a new and unprecedented power to set limits also to the amounts that local councils could collect by their own local taxes, and soon began preparations to impose on them a completely new system of local taxation.

For the cost of running their services the local councils rely partly on grants from the central government, and partly on taxes which they collect from local residents and businesses which operate in their areas.

In 1990 a new law came into effect, replacing the property tax by a new tax called a ‘community charge. This is a fixed amount to be paid by each person to the local authorities.

A person with a small income may pay only a proportion (a fifth or more) of the normal rate.

Each council estimates its costs for the next year, then decides how much it needs to collect front its residents after taking account of grants from the central government and other revenues. So, the amount to be paid by each person depends on the expenditures of the borough or county and district where he or she lives. But the amount no longer depends on the value of the house.

Before changing the basis of local taxes, the central government had already increased its interference with the autonomy of local councils. In particular it restricted the amounts that local councils could collect from their people. Many local councils, including some with Conservative majorities, complained that it was impossible for them to provide local services of an acceptable quality without more funds. In 1990 Mr. Major’s government began a new review of the whole system. It decided that the new ‘poll tax’ would be replaced by a local tax based on the value of property. It also increased the proportion of local expenditure paid for out of government taxation.

Тема 13

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Forms of ownership

I. A business may be privately owned in three different forms. These forms are the sole proprietorship, the partnership, and the corporation.

2.The sole proprietorship is the simplest organizational form. The is one owner, who usually takes the title of president. He or she can make decisions without consulting anyone. The sole proprietorship is the most common in many western countries. More that 80 % of all businesses in the USA are sole proprietorships. They are service industries such as Laundromats, beauty shop, different repair shops, restaurants.

3.A partnership is an association of two or more persons to carry on a business for profit. When the owners of the partnership have unlimited liability they are called general partners. If partners have limited liabilities they are limited partners. Any business may have the form of the partnership, for example, in such professional fields as medicine, law, accounting, insurance, stockbrokerage. Limited partnerships are a common form of ownership in real estate oil prospecting, quarrying industries, etc.

4.Partnerships have more advantages than sole proprietorships if one needs a big capital or diversified management. They are easy to from and often get tax benefits from the government. But partnerhips have certain disadvantages too. One is unlimited liability.It means that each partner is responsible for all debts and is legaly responsible for the whole business. Another disadvantage is partners may disagree with each other.

5. A business corporation is an institution established for the в of making profit. The shares of ownership are represented by stock certificates. A person who owns a stock certificate is called stock-holder.

6. There are several advantages of the corporation. The first is the ability to attract financial resources. The next advantage is that if the corporation attracts a large amount of capital it can invest it in plants, equipment and research. The third advantage is that a corporation can offer higher salaries and attract ta­lented managers and specialists.

7. The privately owned business corporation is one type of a corpo­ration. There are some other types too. Educational, religious, charitable institutions can also incorporate. Usually such corpo­ration does not issue stock and is nonprofitable. If there is a profit it is reinvested in the institution rather than distributed to private stockholders.

Answer the following questions:

1. what are three different ways that a business can be privately
owned?

2. What forms do most European countries have?

3. Name some businesses that are likely to be sole proprietorships.
Why do you think so?

4. What is the difference between general partnership and
partnership?

5. In what professional fields are the partnerships found?

6. In what businesses is the partnership a common form?

7. What are the advantages of the partnership?

8. What are its disadvantages?

9. Who can own a corporation?

10.What are the advantages of the corporate form of ownership?

11.What kinds of corporations don't issue the stock usually?

12.What world-known corporations do you know?