Market Economy And Its Social Consequences

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Market economy and its social consequences

In primitive societies the usual system of exchanging goods vas barter system. At that time the idea of profit did not exist, ‘people accumulated goods not for making profit during the days of scarcity but to gain prestige. The system of trading often consisted if giving and mutual rendering of Services. Economic factors such s wages, Investment; interest and profit were practically unknown n preliterate societies.

In the early part of the Modern Period, the economic activities were generally regulated by the governing powers. It was an economic reflection of the growing unification of European peoples under strong monarchical Governments. The interest of the secular rulers lay in internal unification and this necessarily meant economic as well as political integration.

The mercantilist ideology dominated the period. The economic activities of the people were politically regulated to increase the profits of the king and to fill his treasury with wealth. The nation was looked upon by the mercantilist as an economic organisation engaged in the making of profit. The ownership and use of productive properties were minutely regulated by mercantilist’s law.

Then came the Industrial revolution which changed the techniques of production. The policy of mercantilism also had failed to bring about the welfare of the people. To secure maximum production of usual goods the new do “trine of ‘Laissez- faire’ was propounded. The doctrine preached non- interference in economic matters.

Under capitalism, there is no governmental control over the forces of production, distribution and exchange. It is controlled by the forces operating in the market. There is no price control or regulated distribution by the government. The economy operates freely under the Law of Demand and Supply. The Capitalist Economy is a liberalized or market economy.

Features of market system

 In the broadest sense, capitalism may be defined as the economic system making the widest use of capital in the process of production. In the technical sense, capitalism may be defined as the economic system of production in which Capital Goods are owned privately by individuals or corporations.

 

 

Private Property

The institution of private property lies at the basis of modern economic life. It is the terra ferma of capitalism. In capitalism every person has the right to earn and maintain property. The Right to Property is considered an inviolable right.

Large Scale Production

It is another important feature of capitalism. Capitalism arose as a result of industrial revolution which made large scale production possible. The installation of gigantic Plants and division of labour increased production. More production means wider use of capital and led to more profits.

Profit Institution

capitalism cannot exist in the absence of institution of profit. The capitalists invest Money and out of investments earn profit. Production under capitalism is profit-oriented.

Competition

Competition is the inevitable result of a capitalist economy. In capitalism there is extreme competition between capitalists. Demand is artificially increased and supply is decreased. There is cut-throat competition under capitalism.

Social Consequences of Capitalism

High Standard of Living

Capitalism is the product of industrialisation. Industrialisation has increased production. Now men do not have to toil for bread as they used to do in the primitive days. The necessities of life are easily available.

Economic Progress

Capitalism has led men to exploit the natural Resources more and more. The people exert themselves utmost for earning money. This had led to many inventions in the field of Industry, agriculture and business which have contributed to economic progress.

Exchange of Culture

Capitalism has led to international trade and exchange of know-how. People in different countries have come nearer to each other. The development of the means of transport and Communication has facilitated contacts among the peoples of the world thereby leading to exchange of ideas and culture.

Lessening of Racial Differences:  

Capitalism has also led to the lessening of differences based on race, creed, caste and nationality. In the factory the workers and officials belonging to different castes co-operate with one another and work shoulder to shoulder. Inter-mixing of castes is the off-shoot of capitalism.

Greed for Wealth

Capitalism is based on greed for wealth It has raised wealth to the pedestal of deity. Wealth has become the be-all and end-all of human life. The modern man is mad after wealth. He wants to earn more and more wealth by any means. The idea for morality does not enter into the means of earning. It has thus led to moral degeneration.

Destruction of Human Values

In a capitalist order, everything has come to be measured in terms of wealth. All values of human life such as love, sympathy, benevolence, love and affection are evaluated in terms of silver coins. Every person wants to get the maximum. The sole criterion is wealth, not value.

 

 

Materialism

 Capitalism manifests materialism in its extreme form. Religion and spirituality lose their force. Religion becomes the opium of people. Religion becomes hypocrisy. The big capitalists save lacs of rupees by way of tax through contribution to fictitious charitable institutions. While people are short of goods, the capitalists hoard them to soar the prices.

Artificiality

Capitalism has transformed modern culture into mere artificiality. Today there is false courtesy. One does not find gentility and human touch. One can see false prestige, mere artificiality, and sheer advertisement even in art and literature, nothing to speak of diet, dress and speech etc. Life today has become artificial.

Imbalance in Social System

Capitalism has led to an imbalance in the social system. It has failed to adjust itself to the welfare of Society. It has widened the gap between the haves and have-not’s and created insatiable greed for wealth among the people. It has changed the very outlook of human beings. Wealth has become an important criterion of status.

 It has led to the moral degeneration of man. Obviously, capitalism has failed to bring about the moral development of man. It is injurious both to society and the individual. In short, it has proved a curse to humanity instead of a blessing. Karl Marx was its bitter critic.

 

 


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A market economy is an economic system in which the prices for goods and services are determined by the open market and consumers, rather than by a central government. Market economies are characterized by the following:

Market economies have a number of benefits. They promote economic Growth, efficiency, and innovation. They also give consumers a great deal of choice. However, market economies also have a number of drawbacks. They can lead to inequality, environmental problems, and a lack of Democracy.

One of the main benefits of market economies is that they promote economic growth. In a market economy, businesses are constantly competing with each other to sell goods and services. This competition drives down prices and leads to innovation. As a result, market economies tend to be more efficient than other Economic Systems.

Another benefit of market economies is that they give consumers a great deal of choice. In a market economy, consumers can choose from a wide variety of goods and services. This gives them the power to vote with their dollars and support the businesses that they believe in.

However, market economies also have a number of drawbacks. One of the main drawbacks is that they can lead to inequality. In a market economy, businesses are free to pay their workers whatever they want. This means that some workers may be paid very well, while others may be paid very poorly. This can lead to a great deal of inequality in society.

Another drawback of market economies is that they can lead to environmental problems. In a market economy, businesses are free to produce whatever they want, however they want. This means that businesses may pollute the Environment in order to save money. This can lead to serious environmental problems.

Finally, market economies can also lead to a lack of democracy. In a market economy, businesses have a great deal of power. They can donate money to political campaigns, and they can lobby the government to pass laws that benefit them. This can give businesses a great deal of influence over the government, and it can make it difficult for the government to represent the interests of all citizens.

In conclusion, market economies have a number of benefits and drawbacks. They promote economic growth, efficiency, and innovation. They also give consumers a great deal of choice. However, market economies can also lead to inequality, environmental problems, and a lack of democracy. It is important to weigh the benefits and drawbacks of market economies carefully before deciding whether or not they are the best economic system for a particular country.

What is a market economy?

A market economy is an economic system in which the prices for goods and services are determined by supply and demand. In a market economy, businesses and individuals are free to buy and sell goods and services as they see fit.

What are the benefits of a market economy?

There are many benefits to a market economy. One benefit is that it promotes efficiency. In a market economy, businesses are constantly trying to find ways to produce goods and services more efficiently. This leads to lower prices and higher quality goods and services for consumers.

Another benefit of a market economy is that it promotes innovation. Businesses are constantly trying to find new ways to attract customers and make a profit. This leads to new products and services being developed, which benefits consumers.

Finally, a market economy promotes individual freedom. In a market economy, individuals are free to choose what they want to buy and sell. This gives individuals a lot of control over their own lives.

What are the drawbacks of a market economy?

There are also some drawbacks to a market economy. One drawback is that it can lead to inequality. In a market economy, those who are successful in business can earn a lot of money. This can lead to a large gap between the rich and the poor.

Another drawback of a market economy is that it can lead to environmental problems. Businesses are often focused on making a profit, and they may not always consider the environmental impact of their activities. This can lead to pollution and other environmental problems.

Finally, a market economy can be unstable. In a market economy, businesses are constantly competing with each other. This can lead to booms and busts, as businesses expand and contract. This can be disruptive to the economy and to people’s lives.

What is the social impact of a market economy?

The social impact of a market economy is complex and varied. On the one hand, a market economy can lead to greater prosperity and economic growth. This can have a positive impact on people’s lives, as they have more money to spend and more opportunities to improve their standard of living.

On the other hand, a market economy can also lead to inequality and social problems. For example, the gap between the rich and the poor can widen in a market economy, and this can lead to social unrest. Additionally, a market economy can put pressure on the environment, as businesses may not always consider the environmental impact of their activities.

Overall, the social impact of a market economy is mixed. It can lead to both positive and negative consequences.

  1. A market economy is an economic system in which the prices of goods and services are determined by supply and demand.
  2. A market economy is based on the principle of private ownership of property.
  3. In a market economy, businesses are free to compete with each other.
  4. In a market economy, consumers are free to choose what they want to buy.
  5. A market economy is often seen as the most efficient way to organize an economy.
  6. However, market economies can also lead to inequality and social problems.
  7. One of the main problems with market economies is that they can lead to inequality.
  8. In a market economy, those who are already wealthy are often able to get wealthier, while those who are poor are often unable to improve their situation.
  9. This can lead to a society in which there is a large gap between the rich and the poor.
  10. Another problem with market economies is that they can lead to social problems.
  11. For example, market economies can lead to crime, pollution, and Environmental Degradation.
  12. In addition, market economies can lead to social unrest and instability.
  13. Despite these problems, market economies are still seen by many as the best way to organize an economy.
  14. Market economies are efficient and they allow for individual freedom.
  15. However, it is important to be aware of the problems that can arise in market economies and to take steps to address them.

  16. Which of the following is not a characteristic of a market economy?
    (A) Private ownership of property
    (B) Government regulation of prices
    (C) Competition between businesses
    (D) Consumer choice

  17. Which of the following is a problem that can arise in a market economy?
    (A) Inequality
    (B) Crime
    (C) Pollution
    (D) All of the above

  18. Which of the following is a benefit of a market economy?
    (A) Efficiency
    (B) Individual freedom
    (C) Innovation
    (D) All of the above

  19. Which of the following is a way to address the problems that can arise in a market economy?
    (A) Government regulation
    (B) Social programs
    (C) Education
    (D) All of the above

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