The Market As A Social Institution Class 12th Indian Society CBSE Solution

Class 12th Indian Society CBSE Solution

Questions
Question 1.

What is meant by the phrase ‘invisible hand’?


Answer:

According to Adam Smith, the famous economist, the market economy is made up of a series of individual exchanges or transactions, which creates functioning and ordered system automatically. Every person has their own self-interest and the work to fulfil it. In fulfilling one's own self-interest, the interest of the society is fulfilled. Therefore, there is some sort of unseen force at work, which converts what is good for each individual into what is good for society. This unseen force was called invisible hand by Adam Smith.



Question 2.

How does a sociological perspective on markets differ from an economic one?


Answer:

Adam Smith and other thinkers have developed the idea of modern economics, which says that economy can be studied as a separate part of society that operates according to its own law.

Whereas, sociologists have tried to develop an alternative way of studying the economic institutions and their processes. According to the sociologist’s markets are the social institutions that are constructed in culturally specific way.



Question 3.

In what ways is a market – such as a weekly village market – a social institution?


Answer:

Weekly or periodic market is a social organisation in following manners –

a) In weekly markets people from surrounding villages come to sell their agricultural and other produce and to buy the goods and other items which are not available in their villages.


b) These markets attract traders from outside local limits as well as money lenders, entertainers, astrologers and various other service renderers.


c) In rural India some specialised markets also organised at frequent intervals like cattle market. These periodic markets not only link different regional and local economies but also link them to the wider national economy and to other towns and Metropolitan centres.


d) The weekly haat is quite common in rural as well as urban areas in India and especially in those areas which are relatively less developed. These weekly markets are major institution for exchange of goods.


e) Some people come to periodic market not only for exchange of goods and services but also to meet their near ones, to arrange marriages, gossip and so on.



Question 4.

How do caste and kin networks contribute to the success of a business?


Answer:

The cast and kin networks contributed to the success of business in following ways -

a) In pre-colonial period India had extensive trade connection within and outside country. These were based upon trust, loyalty and understanding prevailing within communities. Some of these communities had their own system of banking and credit, like Hundi system.


b) "Jajmani system" was a kind of non-market exchange system which existed in many villages and regions during pre colonial period also. In this system the villages were incorporated into wider networks of exchange through which agricultural products and other goods were circulated.


c) The Nattukotai Chettiars of Tamilnadu are an example of indigenous trading networks that organised and worked during colonial period. Study of this community during that period shows that how it's banking and trade activities were deeply embedded in the social organisation of the community.



Question 5.

In what ways did the Indian economy change after the coming of colonialism?


Answer:

The arrival of colonialism in India brought major changes in Indian economy –

a) It brought disruptions in production, trade and agriculture. A well-known example of it is the demise of Handloom Industry from India due to excess supply of cheap manufactured textiles from England.


b) In colonial era India was majorly linked with capitalist economy of the world.


c) Before colonialism India was a major supplier of manufactured goods to world market but after the arrival of British, India became a source of raw material in agricultural product and a consumer of manufactured goods which benefited the industries of England most.


d) The expansion of market economy in India provided new opportunities to some merchant communities who were able to improve their position by re-orienting themselves to the changing economic circumstances.


e) In some cases new communities emerged to take the advantage of the economic opportunities provided by colonialism and they continue to hold the economic power even in post-colonial period.



Question 6.

Explain the meaning of ‘commoditisation’ with the help of examples.


Answer:

The growth of capitalisation brought extension of market into places and spheres of life, which were previously untouched. Commodification or commoditisation means treating such things commodity, which were earlier not traded in market. Marx and other critics of capitalism have criticised the process of commoditisation on the ground that it has negative social effects.


The examples of commoditisation are given below –


• Sale of labour and skill


• Sale of human organs


• Arranging marriages through marriage bureaus and website


• Organising the marriage and other such ceremonies through event planners


• Sale of natural commodity like drinking water in form of bottled water



Question 7.

What is a ‘status symbol’?


Answer:

Max Weber, one of the founders of sociology, has pointed out that people buy and use goods which are closely related to their status in society. He has described this relationship by the term social status. He has also explained that how classes and status groups are differentiated on the basis of their lifestyle.

Lifestyle not only includes consumption but also the way of decorating home, the way of dressing, the leisure activities, and many other aspects of daily life.


For example, in today's world the brand of cell phone or the model of car owned by the family is an important marker of the socio-economic status of that family.



Question 8.

What are some of the processes included under the label ‘globalisation’?


Answer:

Since late 1980s, India has entered in new era of its economic history with development of liberalization which led it to the era of globalisation.

Globalisation means the countries in the world become interconnected not only economically but also culturally and politically.


It includes a number of trends specially the international movement of commodities, money, information, and people.


The main feature of globalisation is the increasing extension and integration of markets around the globe.



Question 9.

What is meant by ‘liberalisation’?


Answer:

Liberalisation includes of various range of policies which are –

a) Privatisation of public sector enterprises.


b) Lessening of government regulations and restrictions on capital, labour and trade.


c) A reduction in tariffs and import duties so that foreign goods can be easily imported, and local goods can have easy access in foreign market.


d) It can be defined as marketisation or market-based process to solve economic social and political problems.



Question 10.

In your opinion, will the long-term benefits of liberalisation exceed its costs? Give reasons for your answer.


Answer:

The liberalisation has brought following benefits to the Indian economy –

• The Indian economy has witnessed growth and opened up its market for foreign companies.


• Increased foreign direct investment has helped in economic growth and generation of employment.


• Privatisation has increased the efficiency of companies and has reduced the government burden of running these companies.


At the early stage of liberalisation, it has faced many criticism and many people said that it is just like welcoming another East India Company.


As per my opinion if we do cost and benefit analysis of the liberalisation, the benefits are so very much that they can easily overshadow the disadvantages and cost related to it.


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