Chapter – 4

The Market as a Social Institution

In this post we have given the detailed notes of class 12 Sociology Chapter 4 (The Market as a Social Institution) in English. These notes are useful for the students who are going to appear in class 12 board exams.

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Market

A market is a place where consumers (who want to buy a good or service) and producers (who want to sell a good or service) come and trade.

Marketing is a subject of economics so why is it studied in sociology?

• Economics and Markets
• Sociology and Markets

Economics and Markets

• Adam Smith, one of the most famous political economists of the time in the early 18th century, has explained the market economy in his book (The Wealth of Nations)
• According to him, the market economy is a long order of exchanges between individuals.
• That is, it is an arrangement of exchange that has been going on for a long time.
• This system is not deliberately set up by any person.
• It is installed on its own.
• In this system, every person tries to increase his profit, due to which the benefit of every person in society increases and the welfare of society takes place.
• Because every person is a part of society, that is why the benefit to the individual eventually turns into the benefit of the society.

Invisible hands

• Because this system continues in this way on its own, it seems that it is being controlled by an invisible force.
• This invisible force has been called the invisible hand by Adam Smith
• Every person in the market works for profit and if this profit is maintained wisely then it leads to the welfare of both the individual and society.
• This is why Adam Smith has supported open trade.
• There is no interference from the government or other institutions in this type of business and everything is controlled by the producers and consumers themselves.
• So, in this way the market is studied in economics as profit and loss.

Sociology and Markets

• In economics, the market has been seen only as a linking profit and loss.
• While sociology covers the social characteristics of the market
• According to sociologists, a market is not just a place where a person goes and buys or sells goods of his needs.
• Rather, it is a place where people come, socialize with each other, meet other cultures and this market is also created based on society.

For example

• In a market, the shops of the strong people of society are in the center while the shops of the socially weaker sections are around them.
• There are different types of services available in these markets which are associated with different classes.
• These markets are also mainly controlled by the powerful sections of society.
• For all these reasons, the market is seen as a social institution.
•  

Economics, Sociology and Markets

A weekly tribal market

• Weekly Markets: – Those are the markets which take place on a certain day of the week.
• In these markets, people from nearby villages come to sell their agricultural produce or services and at the same time people from these nearby villages come to buy these goods and services.
• Such markets are organized both in villages and towns.
• In rural areas, these markets are also a good means of mutual interaction in addition to shopping.
• Local people come to this market and sell their produce to traders; these traders sell the purchased produce in other areas and the local people buy the goods needed in the market with the money received from the crop batch.
• The main reason for most people to go to this market is to socialize with relatives because by going to such markets they can meet relatives, talk, and do other things.
• That is why these markets also have a social form.

Market is a social institution.

• The social nature of the market can be studied from the weekly market of bastar district.
• Gond tribals mainly live in this district.
• The weekly market here includes tribal, non-tribal and outside traders.
• Mainly made goods, food items, agricultural products and forest products are traded here.
• Most of the buyers are tribals, while most of the sellers are upper caste Hindus.
• Rich and high-class Rajput jewellery makers and middle-class Hindu traders sit in the areas between the market.
• Local tribals, who sell vegetables and household items, sit on the outskirts of the market.

Markets of Pre-Colonial India

• Pre-colonial India refers to the time when India was not ruled by the British
• It is believed that at that time markets and trade were self-sufficient.
• The circulation of money in business was not so popular.
• Even before the British rule, villages were connected to large systems of trade and were partners in trade.
• India’s handloom industry was the most prominent, from where cotton and expensive silk fabrics were also exported.
• The trade organization and banking system in the country was an achievement due to which trade was done inside and outside India.
• The instrument hundi or bill of exchange was used for exchange and credit.
• It used to be like a loan letter and was accepted by traders.

Markets during colonial rule

• Colonial rule This system changed due to the rule of the British.
• The British rule gradually strengthened its grip on the rural areas so that they could use the natural resources present there.
• By constructing roads and rail routes, the region was connected to major regional and state markets.
• Due to this, traders, moneylenders, and people from nearby areas started coming to the area, due to which the tribal community lagged.
• These outsiders made the tribals poor and occupied their lands.
• Because of this, all these tribals remained mere workers.
• These tribals were now kept as labourers in the plantations of their area.
• The nature of markets in India changed during the colonial rule.
• The circulation of currencies increased as the British encouraged currency exchange (transactions in currency).
• The British collected tax as currency, due to which the circulation of currency increased.
• The British encouraged agricultural products in India so that they could take raw materials from here and produce them in Britain and send them to other areas.
• This had a negative impact on India’s textile industry.
  • This happened because raw materials from India were sent to Britain from where clothes were made and brought back to India and sold, these clothes used to be cheap because they were made from machines, due to which the demand for clothes made in India decreased and the handloom industry was negatively affected.
• During this time, some sections of Indian society emerged as traders, for example Marwaris.
• The Marwari people took advantage of the trading opportunities during the colonial rule and established themselves as traders.

New Economic Policy of India (1991)

• India adopted a new economic policy in 1991.
• Under these policies, the Indian economy was globalized, privatized, and liberalized.
• LPG (Libéralisati on, Privatisation, Globalisation)

liberalization

• Liberalization means simplifying the policies of doing business i.e., eliminating licenses and other barriers.

Privatization

• Privatization means promoting the private sector, i.e., giving the private sector a chance to grow and eliminating the obligation on it.

Globalization

• The seamless flow of individuals, goods, capital and ideas from one country to another is called globalization.
• After the adoption of this policy, the pace of development within India increased and trade increased due to simplification of rules.

Consequences of Globalization

Political results

Positive

• • Improvement in governance
  • High level technology for governance
  • Qualitative increase in the functioning of governance
  • transparency
  • Simplification of governance

Negative impact

• End of welfare state
  • The welfare state is called the state which works for the welfare of the people.
• The rise of the least intrusive action state
  • A least intrusive state is a state that is limited only to governance and does not pay much attention to the welfare of the people.
• Less government intervention in industries
• Changes in the role of government

Economic consequences

positive

• Increase in the pace of development.
• High-level technology
• High level utilization of resources
• Increase in employment.
• High quality due to market competition

Negative impact

• The rise of multinational companies
  • Multinational companies are companies that do business in a lot of countries simultaneously.
• Decline of small industries
• Uneven development
• Difficult to do business due to increasing competition.
• Strict visa policy of developed countries

Cultural impact

positive

• Openness of ideas
• Development of mixed culture
• Improving the status of women
• Changes in eating and living habits.

Negative impact

• The Overwhelming Influence of American Culture
• Erosion of the culture of small countries
• Development of unilateral culture
•  

Capitalism and Current Society

• Capitalism has brought many changes to the present society.
• For example
  • Objectification or merchandise
  • consumption

Objectification or merchandise

• Commodityization refers to the situation when something is sold or bought in the market which was not worth being sold or bought before being sold or bought.
• For example
  • Labour or skill
• At present, labour or skill has been objectified or merchandised as it is now sold in the open market, exploiting people as capitalists makes more labour than a person and gives him less amount of capital.
• At present, there are many things that were not part of the market earlier but can now be easily bought or sold on the market.
• For example
  • Earlier marriages were decided by family members, but now they have also been commercialized and there are a lot of marriage bureaus or websites that provide relationships for marriage.

Consumption

• Due to capitalism, the importance of consumption in society has increased.
• Now a person does not consume only to meet his needs, but he buys such things that he can increase his respect.
• Advertising companies also include people from a particular community in their advertising so that it can influence that community.
• Due to capitalism, the goods consumed by the people have become a symbol of its prestige in society.

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