Passage - 1
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 ?

Question

Passage - 1
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 ?

Accepted Answer

Correct Answer: (B) 3 only The passage highlights the inherent tension between markets and democracy, explaining that some people are too poor or handicapped to acquire skills demanded by the market, and that capitalism periodically experiences bouts of unemployment. Therefore, government programs and interventions are essential to support those who are left behind by market forces (making Assumption 3 valid). The passage does not claim that democracies rely on markets to become welfare states or that markets guarantee sufficient economic growth for democracy to function (making Assumptions 1 and 2 invalid).

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