Comprehension : Comprehension

Q 157 / 466

UPSC CSE Prelims 2021

Can a democracy avoid being a welfare state for long? Why cannot mass welfare be left entirely to the markets? There is a built-in tension between markets and democracy, Markets do not work on a one-person-one-vote principle as democracies do What one gets out of the market place depends on one's endowments, skills, purchasing power and the forces of demand and supply. Markets reward individual initiative and skill, and may also lift many from the bottom rungs of society, but some people never get the opportunity to develop skills that markets demand; they are simply too poor and too handicapped; or skill formation takes too long. By creating jobs, markets may be able to help even unskilled people, but capitalism has always witnessed bursts of unemployment.

With reference to the above passage, the following assumptions have been made:

  1. Modern democracies rely on the market forces to enable them to be welfare states.
  2. Markets ensure sufficient economic growth necessary for democracies to be effective.
  3. Government programmes are needed for those left behind in economic growth.

Which of the above assumptions is/are valid?

EXPLANATION

Correct Option (B)

Assumption 3 is valid. The passage explicitly states that certain individuals "never get the opportunity to develop skills that markets demand; they are simply too poor and too handicapped; or skill formation takes too long." It further notes that "capitalism has always witnessed bursts of unemployment." These observations collectively indicate that market mechanisms alone are insufficient to provide opportunities and welfare for all members of society. Therefore, the necessity of government programmes to support those who are unable to benefit from market-driven economic growth is a valid inference from the passage.

Incorrect Options:

Assumption 1 is not valid. The passage highlights a "built-in tension between markets and democracy" and discusses the limitations of markets in ensuring welfare for all. It does not suggest that modern democracies rely on market forces to enable them to be welfare states; rather, it implies that market failures necessitate interventions beyond market mechanisms to achieve welfare objectives.

Assumption 2 is not valid. While the passage acknowledges that markets can create jobs, it also points to their inherent limitations, such as "bursts of unemployment" and the exclusion of certain individuals from skill development and opportunities. The passage does not assert that markets alone ensure sufficient economic growth for democracies to be effective, but rather illustrates their shortcomings in achieving comprehensive and equitable economic well-being and stability.