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Topics: Market economy, Price of petroleum, Yield management Pages: 19 (7992 words) Published: December 4, 2013
Charles Wheelan Naked Economics
CHAPTER 1
The Power of Markets: Who feeds Paris?

I n 1989, as the Berlin Wall was toppling( валиться), Douglas Ivester, head of Coca-Cola Europe (and later CEO), made a snap (быстрый, экспресс) decision. He sent his sales force to Berlin and told them to start passing out Coke. Free. In some cases, the Coca-Cola representatives were literally passing bottles of soda through holes in the Wall. He recalls walking around Alexanderplatz in East Berlin at the time of the upheaval (переворот), trying to gauge [ei] (измерять, оценивать) whether there was any recognition of the Coke brand. "Everywhere we went, we asked people what they were drinking, and whether they liked Coca-Cola. But we didn't even have to say the name! We just shaped our hands like the bottle, and people understood. We decided we would move as much Coca-Cola as we could, as fast as we could—even before we knew how we would get paid."1 Coca-Cola quickly set up business in East Germany, giving free coolers to merchants who began to stock the "real thing." It was a money-losing proposition in the short run; the East German currency was still worthless—scraps of paper to the rest of the world. But it was a brilliant business decision made faster than any government body could ever hope to act. By 1995, per capita consumption of Coca-Cola in the former East Germany had risen to the level in West Germany, which was already a strong market. In a sense, it was Adam Smith's invisible hand passing Coca-Cola through the Berlin Wall. Coke representatives weren't undertaking any great humanitarian gesture as they passed beverages to the newly liber­ated East Germans. Nor were they making a bold statement about the future of communism. They were looking after business—expanding their global market, boosting profits, and making shareholders happy. And that is the punch line (кульминация, концовка, суть) of capitalism: The market aligns (выравнивать, строить) incentives in such a way that individuals working for their own best interest—passing out Coca-Cola, spending years in graduate school, planting a field of soy­beans, designing a radio that will work in the shower—leads to a thriv­ing and ever-improving standard of living for most (though not all) members of society. Economists sometimes ask. "Who feeds Paris?"—a rhetorical way of drawing attention to the mind-numbing (очень сильный) array (совокупность, количество) of things happening every moment of every day to make a modern economy work. Somehow the right amount of fresh tuna makes its way from a fishing fleet in the South Pacific to a restaurant on the Rue de Rivoli. A neighborhood fruit vendor has exactly what his customers want every morning—from cof­fee to fresh papayas—even though those products may come from ten or fifteen different countries. In short, a complex economy involves billions of transactions every day, the vast majority of which happen without any direct government involvement. And it is not just that things get done; our lives grow steadily better in the process. It is remarkable enough that we can now shop for a television twenty-four hours a day from the com­fort of our own homes; it is equally amazing that in 1971 a twenty-five-inch color television set cost an average worker 174 hours of wages (= 22 дня). Today, a twenty-five-inch color television set—one that is more depend­able (надежный), gets more channels, and has better reception—costs the average worker about twenty-three hours of pay (3 дня).2 If you think that a better, cheaper television set is not the best meas­ure of social progress (a reasonable point, I concede (признавать), then perhaps you will be moved by the fact that during the twentieth century, American life expectancy climbed from forty-seven years to seventy-seven, infant mortality plunged by 93 percent, and we wiped out or gained control over diseases such as polio, tuberculosis, typhoid, and whooping cough (коклюш). Our market...
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