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NCERT Class 12 Sociology Chapter 4 The Market as a Social Institution
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The Market as a Social Institution
Chapter: 4
PART – I: INDIAN SOCIETY
TEXTUAL QUESTIONS ANSWERS
1. What is meant by the phrase ‘invisible hand’?
Ans: The “invisible hand” is a metaphor coined by Scottish philosopher Adam Smith to describe how individual self-interest can unintentionally lead to public good in a free market. The phrase invisible hand was introduced by Adam Smith in his book ‘The Wealth of Nations’.
2. How does a sociological perspective on markets differ from an economic one?
Ans: Sociological and economic perspectives on markets differ in their assumptions about markets and how they are studied:
(i) Sociological Perspective: Sociologists view markets as social institutions that are constructed in culturally specific ways. For example, markets are often controlled or organised by particular social groups or classes, and have specific connections to other institutions, social processes and structures.
(ii) Economic Perspective: In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and information. The exchange of goods or services, with or without money, is a transaction.
3. In what ways is a market – such as a weekly village market – a social institution?
Ans: Sociologists view markets as social institutions that are embedded in their political, social, and cultural environments. They are places of economic interaction that are based on a specific social context and environment, and where a specific kind of social interaction takes place.
Functions as a social institution in several ways:
(i) Social Interaction: A social interaction is a social exchange between two or more individuals. These interactions form the basis for social structure and therefore are a key object of basic social inquiry and analysis.
(ii) Norms and Rules: Social norms and rules are shared standards of acceptable behaviour by groups. Social norms can both be informal understandings that govern the behaviour of members of a society, as well as be codified into rules and laws.
(iii) Cultural Significance: Culture is important to sociologists because it plays a significant role in the production of social order. The social order refers to the stability of society based on the collective agreement to rules and norms that allow us to cooperate, function as a society, and live together (ideally) in peace and harmony.
(iv) Economic Roles: Economic sociology is particularly attentive to the relationships between economic activity, the rest of society, and changes in the institutions that contextualise and condition economic activity.
4. How do caste and kin networks contribute to the success of a business?
Ans: Kinship networks are interconnected social relationships between people considered “kin” or family. These relationships can be established through adoption, marriage, biology, partnership, or other close social ties. Caste and kin networks can contribute to business success in various ways, including by providing trust, cooperation, and access to resources.
These trading connections were made by merchant groups who did extensive internal and external trades and mostly they were organised as a community based on their same caste or kinship and they did business on the basis of trust, loyalty and understanding that prevailed within their community.
5. In what ways did the Indian economy change after the coming of colonialism?
Ans: The British colonial rule in India had a significant impact on the Indian economy, transforming it into a supplier of raw materials and a consumer of British manufactured goods.
Some of the key changes include:
(i) Agriculture: The British promoted agriculture geared towards producing cash crops (such as cotton, jute, and indigo) for export to Britain and other colonies. This led to the neglect of food crops and local agricultural needs, contributing to periodic famines in India.
(ii) Industries: The British destroyed the Indian handloom industry with cheap manufactured textiles, forcing weavers into unemployment.
(iii) Trade: India was transformed into a supplier of raw materials (such as cotton, jute, minerals) for British industries. India became a lucrative market for British manufactured goods, resulting in a trade imbalance where India imported more than it exported, draining wealth from the country.
(iv) Wealth drain: A significant portion of India’s wealth was drained to Britain, contributing to widespread poverty and economic inequalities.
(v) Infrastructure: The British invested in infrastructure primarily to serve their own interests, such as building railways and ports for easier extraction and export of resources.
(vi) Exploitation: The British exploited India’s natural resources and cheap labour, paying low wages and creating unsafe working conditions
6. Explain the meaning of ‘commoditization’ with the help of examples.
Ans: The growth of capitalism around the world has meant the extension of markets into places and spheres of life that were previously untouched by this system. Commodification occurs when things that were earlier not traded in the market become commodities. For instance, labour or skills become things that can be bought and sold. According to Marx and other critics of capitalism, the process of commodification has negative social effects.
Examples of Commoditization:
(i) Labour or skills have become things that can be bought and sold.
(ii) Sale of human organs, such as kidneys by poor to cater to rich patients to early money.
(iii) Traditionally, marriages were arranged by families but now professional marriage bureaus and websites help people to find brides and grooms and take a proper fee. Earlier rituals and ceremonies were planned out by elders in the family but now it is given as a contract to marriage planners to plan out the entire ceremony.
(iv) In earlier times, people could not have even thought that anyone could sell drinking water or charge money for it. But today, we buy bottled water as a normal commodity i.e. a commodity we can buy and sell.
7. What is a ‘status symbol’?
Ans: The goods that people buy and use are closely related to their status in society. This relationship is termed as status symbol. Example the brand of cell phone or the model of car (or any other example) that one owns or uses are markers of socio-economic status.
8. What are some of the processes included under the label ‘globalisation’?
Ans: Globalisation is a complex process that involves the increasing integration of economic, cultural, social, and political spheres between nations and communities.
Some key processes included under the label of globalisation are:
(i) Economic Globalisation: Economic globalisation refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies.
(ii) Technological globalisation: Technological globalisation refers to the cross-cultural development and exchange of technology. The speed with which culture is diffused has changed as a result of technological advances.
(iii) Cultural globalisation: Cultural globalisation refers to the transmission of ideas, meanings and values around the world in such a way as to extend and intensify social relations.
(iv) Political globalisation: Political globalisation is the growth of the worldwide political system, both in size and complexity. That system includes national governments, their governmental and intergovernmental organisations as well as government independent elements of global civil society such as international non-governmental organisations and social movement organisations.
(v) Social globalisation: Social globalisation refers to the sharing of ideas and information between and through different countries.
(vi) Environmental globalisation: Environmental globalisation increases global uniformity and connectedness in the language, regulations, and practices of environmental management.
9. What is meant by ‘liberalisation’?
Ans: The Indian economy was liberalised within the year 1991. Economic reforms were passed to achieve a number of goals, including modernisation, growth of the role of personal and capital inflows, and the establishment of a free-market economy.
Liberalisation, simply put, refers to the relief of state restrictions within the areas of social, political, and economic policies. Liberalisation in economic policy focuses on the reduction of government laws and restrictions in place to encourage greater participation by private entities.
10. In your opinion, will the long term benefits of liberalisation exceed its costs? Give reasons for your answer.
Ans: The long term benefits of liberalisation are generally thought to exceed its costs, but the impact can be mixed. Some potential long term benefits include economic growth, increased foreign investment, and improved living standards. However, liberalisation can also lead to increased competition, economic destabilisation, and dependence on global markets.
As I think the costs and disadvantages will be more than the advantages and benefits so as some sectors of Indian industry like software and information technology or agriculture like fish or fruit may benefit from access to a global market but other sectors like automobiles electronics or oilseeds will lose because they cannot complete with foreign products and producers.
