The Market as a Social InstitutionClass 12 Indian Society NCERT Solutions
10 Solutions
Generated by KedovoAI
Solution 1 of 10
Q1Questions
What is meant by the phrase 'invisible hand'?
Solution
The phrase 'invisible hand' was coined by the political economist Adam Smith in his book The Wealth of Nations. It refers to the self-regulating nature of a market economy. Smith argued that the market is composed of numerous individual transactions. While each individual acts out of their own rational self-interest, their collective actions unintentionally create an ordered and functioning system that benefits society as a whole. This unseen force that guides a free market towards efficiency and societal well-being, without any central planning or direction, is what Smith called the 'invisible hand'.
Q2Questions
How does a sociological perspective on markets differ from an economic one?
Solution
A sociological perspective on markets differs significantly from a traditional economic one in its approach and focus.
-
Economic Perspective: Modern economics, following thinkers like Adam Smith, tends to study the economy as a separate sphere of society that operates according to its own internal laws, such as supply and demand. It focuses on issues like price determination, investment, and consumer choice, often leaving out the broader social or political context.
-
Sociological Perspective: Sociology, in contrast, views markets as social institutions that are 'socially embedded'. This means that economies cannot be separated from the larger social framework. Sociologists argue that markets are constructed in culturally specific ways, are often controlled by particular social groups or classes (like caste), and have deep connections to other social institutions like family and kinship. They study how social structures and cultural norms shape economic processes and institutions.
Q3Questions
In what ways is a market – such as a weekly village market – a social institution?
Solution
A weekly village market, or haat, is a social institution because its significance extends far beyond purely economic transactions. It serves as a central feature of social and economic organization in many agrarian societies.
- Social Intercourse: For many visitors, the primary reason to attend the market is social. It is a place to meet relatives and friends, arrange marriages, exchange gossip, and maintain social networks.
- Bringing People Together: The market brings together a diverse group of people from surrounding villages, including traders, moneylenders, entertainers, astrologers, and specialists, creating a hub of social activity.
- Linking Economies: These periodic markets play a crucial role in linking local economies with regional and national economies. They are points where produce from remote villages enters wider circulation and manufactured goods become available locally.
- Cultural Significance: As seen in the example of the Dhorai market, a weekly market can also be a site for religious ceremonies, making it a place where economic, social, and cultural life intersect.
Q4Questions
How do caste and kin networks contribute to the success of a business?
Solution
Caste and kin networks are crucial to the success of a business, particularly for traditional merchant communities in India, for several reasons:
- Building Trust: Business and trade often operate on trust. Businessmen are more likely to trust others from their own community or kin group. This trust is essential for financial transactions, credit, and long-distance trade. The Nakarattars, for example, operated a caste-based banking system where reputation and social relationships within the community assured public confidence.
- Facilitating Trade: These networks allow for sophisticated trade and credit systems to function. For instance, a hundi (bill of exchange) issued by a merchant in one part of the country could be honoured by another merchant from the same network in a distant place, facilitating smooth long-distance trade.
- Creating Monopolies: Because business is often conducted within these networks, it can lead to a caste-based specialisation or monopoly in certain areas of business. This reduces competition from outsiders and consolidates economic power within the community.
- Accumulating Capital: As seen with the Nakarattars, communal institutions based on caste and kinship were adapted to accumulate and distribute capital, which was vital for their business operations.
Q5Questions
In what ways did the Indian economy change after the coming of colonialism?
Solution
The arrival of colonialism brought about major upheavals and fundamental changes in the Indian economy.
- Disruption of Traditional Industries: Colonial policies led to the decline of traditional industries. A well-known example is the demise of the Indian handloom industry, which could not compete with the influx of cheap, machine-made textiles from factories in England.
- Integration into World Capitalism: India was more fully integrated into the world capitalist economy, but in a subordinate position. Its role transformed from being a major exporter of manufactured goods to becoming a supplier of raw materials (like cotton) and agricultural products for British industries and a consumer market for British manufactured goods.
- Emergence of New Markets and Groups: Colonialism created new economic opportunities that led to the rise of new business communities, such as the Marwaris. These groups took advantage of opportunities in colonial cities like Calcutta and established extensive trade and moneylending networks.
- Transformation of Agrarian Economy: The colonial state's demand for land revenue in cash and the opening up of remote tribal areas for resource exploitation transformed local economies. This led to the commodification of forest produce and the creation of a market for tribal labour, often resulting in the impoverishment and loss of land for local adivasi populations.
Q6Questions
Explain the meaning of 'commoditisation' with the help of examples.
Solution
Commoditisation, or commodification, is the process by which things that were previously not traded in a market become commodities that can be bought and sold for a price. It transforms goods, services, or even ideas and relationships into objects of market exchange.
Examples from the text include:
- Labour: Under capitalism, a person's labour power becomes a commodity that can be sold in the market in exchange for a wage.
- Water: Drinking water, which was once a freely available natural resource, is now sold in sealed plastic bottles, making it a commodity.
- Social Skills: Private institutes now offer courses in 'personality development' or 'spoken English', commodifying cultural and social skills that were traditionally imparted through the family.
- Marriage Services: Traditionally, marriages were arranged by families. Now, professional marriage bureaus and websites offer matchmaking services for a fee, turning the process of finding a spouse into a commercial service.
- Human Organs: The text mentions the controversial example of the sale of kidneys, which illustrates how even parts of the human body can be commodified.
Q7Questions
What is a 'status symbol'?
Solution
The term 'status symbol' was coined by sociologist Max Weber. It refers to a product, possession, or service that an individual buys and uses to signify their social and economic status to others. In modern societies, consumption is not just about fulfilling needs; it is also a way to create and communicate social distinctions. The goods people own are closely related to their position in society. For example, the chapter mentions that among the middle class in India today, the brand of a mobile phone or the model of a car that a person owns serves as an important marker of their socio-economic status.
Q8Questions
What are some of the processes included under the label 'globalisation'?
Solution
Globalisation is a complex process through which the world becomes increasingly interconnected economically, culturally, and politically. The key processes included under this label are:
- Increased International Movement: There is a significant increase in the cross-border movement of commodities, money, information, and people.
- Technological Development: The development of technology in areas like computers, telecommunications, and transport, along with other infrastructure, facilitates this global movement.
- Integration of Markets: A central feature is the growing extension and integration of markets around the world. This means that economic changes in one part of the globe can have a profound impact on distant locations.
- Circulation of Culture: It is not just goods and money that circulate. Cultural products, images, and ideas also move rapidly around the world, entering new circuits of exchange and creating new global markets, such as the market for Indian spirituality (yoga, ayurveda) in the West.
Q9Questions
What is meant by 'liberalisation'?
Solution
Liberalisation refers to a set of economic policies aimed at reducing government control and promoting market-based processes. In India, the policy of liberalisation was initiated in the late 1980s and marked a shift away from state-led development. Key components of liberalisation include:
- Privatisation: Selling government-owned public sector enterprises to private companies.
- Deregulation: Loosening or removing government regulations on capital, labour, and trade.
- Reduced Tariffs: Lowering import duties and tariffs to allow foreign goods to be imported more easily.
- Foreign Investment: Allowing easier access for foreign companies to invest and set up industries within the country.
This process is also referred to as 'marketisation', which emphasizes the use of market mechanisms over government policies to solve social and economic problems.
Q10Questions
In your opinion, will the long term benefits of liberalisation exceed its costs? Give reasons for your answer.
Solution
Based on the text, the impact of liberalisation is mixed, and whether its long-term benefits will exceed its costs is a subject of intense debate. The chapter provides arguments for both sides.
Potential Benefits:
- Economic Growth: Proponents argue that liberalisation stimulates economic growth by making the economy more efficient. Private industry is considered more efficient than government-owned enterprises.
- Increased Investment and Competition: Opening up markets has led to increased foreign investment and the availability of a wider range of foreign goods for consumers.
- Global Opportunities: Certain sectors of the Indian economy, such as software, information technology, and specific agricultural exports like fish and fruit, have benefited from gaining access to the global market.
Potential Costs:
- Negative Impact on Domestic Industry: Many domestic producers, such as small manufacturers in electronics or automobiles, have struggled to compete with foreign producers and brands, leading to losses.
- Agrarian Distress: Farmers are now exposed to global competition. The reduction or withdrawal of support prices and subsidies has made it difficult for many farmers to earn a decent living from agriculture.
- Job Insecurity: The privatisation or closure of public sector industries has led to job losses. It has also contributed to the growth of unorganised sector employment, which generally offers lower pay, fewer benefits, and less job security than the organised sector.
Conclusion:
The chapter suggests that liberalisation creates both winners and losers. While it has spurred growth in some areas and benefited certain sections of the population, it has also created significant challenges and hardships for others, such as farmers and workers in the organised sector. Therefore, it is difficult to conclude definitively that the benefits will outweigh the costs; the long-term outcome likely depends on how the negative consequences are managed and whether the gains from growth are distributed equitably across society.