Key Words and Phrases

relaxation of state incorporation laws	послаблення закону відносно надання статуту корпорації
swift	швидкий, поспішний
irreversible	необоротній
galaxy	плеяда
dual economy	дуальна економіка (суперечлива)
precise impact	точний вплив
merger	злиття, поглинання компаній шляхом придбання цінних паперів або основного капіталу компаній
voting stock	акція, котра надає власнику право голосу на зборах акціонерів
junk bonds	"викидні", високоприбуткові, але ненадійні облігації
leveraged buyouts (LBO)	викуп контрольного пакету акцій в рахунок кредиту
acquisition	придбання

Exercises on the text: Ex. 1. Read and translate the text. Ex. 2. Answer the following questions:

1. What is a dual economy?

2. What opportunities does the growth of the economy create for firms?

3. What is an industrial concentration?

4. When and why did the recession of the LBO movement begin?

5. Did economists agree about effect of industrial conglomeration on the competitive process?

6. When do the sellers have more control over their output and price decisions?

7. Where does the perfect competition lead to according to economic theory?

8. What role does the import competition play in limiting the power of domestic firms in concentrated industries?

Ex. 3. Give Ukrainian equivalents for the following words and word combinations:

an enormous merger; irreversible changes; monopolistic concentration; the galaxy of a few large corporations; interacting forces; antitrust laws; extensive merger activity; industrial conglomeration; to centralize control over the economy; were heavily burdened; to retrench operations; to redistribute income; to bear on legislators; import competition.

Ex. 4. Fill in the blanks with noun, verb or adjective forms. Use your dictionary if necessary.

	Noun	Verb	Adjective
	competition	compete	competitive
	—	consolidate	—
	recording	—	—
	—	—	distributive
	limitation	—	—
	—	determine	—
	indebtedness	—	—

Ex. 5. Give the main idea of the text. Unit 24 Efforts to Combat Monopoly

A great debate over the monopoly question began around the turn of the 20^th century; the debate has waxed and waned ever since. Three alternative approaches have been tried to limit monopolies: (1) antitrust legislation designed to prevent monopoly or foster competition; (2) the regulation of holders of market power through state and federal public-utility laws; and (3) the public ownership of large enterprises (advocated by SOCIALISM).

In the United States the least-used approach has been that of publicly owned enterprise. In Europe and in developing countries, this approach has been a much more common device. Americans have relied mainly on public utility regulation and the antitrust laws to police business behaviour. The first federal legislation to deal with the monopoly problem created the INTERSTATE COMMERCE COMMISSION in 1887 to regulate the railroads.

The SHERMAN ANTI-TRUST ACT of 1890 was intended to prevent monopoly from developing and to strengthen competition. Under the Sherman Act the federal government brought a number of legal actions in the early 1900s that resulted in the breaking up of several large corporations, or trusts as they were then called, including Standard Oil of New Jersey, American Tobacco, and Du Pont. The most far-reaching antitrust settlement in recent years was the 1982 decision that divested the American Telephone and Telegraph Corporation (AT&T) of its 22 local operating companies, although the huge corporation received in exchange the right to enter the field of electronic communications.

The Sherman Act also prohibits conspiracies among competitors to fix prices and limit competition. Hundreds of price-fixing cases have been brought to court through the years, sometimes resulting in mild prison sentences and fines. An important case (1961) involved executives of General Electric, Westinghouse, and other leading electrical equipment manufacturers, who pleaded guilty to an elaborate price-fixing scheme. The companies were required to pay damage awards of about $500 million to other companies that brought suits against them under the law.

Although the Sherman Anti-trust Act and subsequent antitrust laws such as the CLAYTON ANTI-TRUST ACT and the ROBINSON-PATMAN ACT have attempted to strengthen competition, many industries remain highly concentrated, others are becoming increasingly concentrated, and most are likely to remain so unless further public action is taken.

In the 1970s a number of legislative proposals were advanced to deal with the shared-monopoly problem in highly concentrated industries. The most ambitious effort was the industrial Reorganization Act, proposed by Senator Philip A.Hart. It and most other bills failed to gain the support needed for passage. In 1976 a mild reform, the Hart-Scott-Rodino Act, also known as the Concentrated Industries Act, strengthened some provisions of the antitrust laws; among other things, it required corporations to notify the FEDERAL TRADE COMMISSION before consummating mergers above a certain size. Another key provision authorized state attorneys general to bring antitrust suits on behalf of citizens.

Other countries have adopted forms of antitrust legislation. Although none as extensive as the U.S. laws. After World War II the Japanese proceeded to break up some of their family-owned combines, the ZAIBATSU. Japan also established a Fir Trade Commission, but it has been much less active than its U.S. counterparts, the Federal Trade Commission and the Antitrust Division of the Department of Justice.

When Western European nations formed the European Economic Community in 1958, they also adopted a common antitrust law. The law has been generally effective in preventing the reemergence of cartels, or formal agreements to limit competition, that were common in Europe before World War II. It does little, however, to prevent mergers, which have been widespread among European companies in recent years.

Some other nations, including South Korea and Pakistan, also have antitrust laws. These laws are usually aimed particularly at price-fixing cartels. Even Russia and other former Soviet states are in the process of replacing their centrally controlled economies with market-driven systems and are contemplating the adoption of antitrust laws to promote the competitive market process.