Read the passage given below and then answer the questions given below the…
2025
Read the passage given below and then answer the questions given below the passage. Some words may be highlighted for your attention. Pay careful attention.
Economic norms theory links economic conditions with institutions of governance and conflict, distinguishing personal clientelist economies from impersonal market-oriented ones, identifying the latter with permanent peace within and between nations.
Through most of human history societies have been based on personal relations: individuals in groups know each other and exchange favors. Today in most lower-income societies hierarchies of groups distribute wealth based on personal relationships among group leaders, a process often linked with clientelism and corruption. Michael Mousseau argues that in this kind of socio-economy conflict is always present, latent or overt, because individuals depend on their groups for physical and economic security and are thus loyal to their groups rather than their states, and because groups are in a constant state of conflict over access to state coffers. Through processes of bounded rationality, people are conditioned towards strong in-group identities and are easily swayed to fear outsiders, psychological predispositions that make possible sectarian violence, genocide, and terrorism.
Market-oriented socio-economies are integrated not with personal ties but the impersonal force of the market where most individuals are economically dependent on trusting strangers in contracts enforced by the state. This creates loyalty to a state that enforces the rule of law and contracts impartially and reliably and provides equal protection in the freedom to contract – that is, liberal democracy. Wars cannot happen within or between nations with market-integrated economies because war requires the harming of others, and in these kinds of economies everyone is always economically better off when others in the market are also better off, not worse off. Rather than fight, citizens in market-oriented socio-economies care deeply about everyone’s rights and welfare, so they demand economic growth at home and economic cooperation and human rights abroad. In fact, nations with market-oriented socio-economies tend to agree on global issues and not a single fatality has occurred in any dispute between them.
Economic norms theory should not be confused with classical liberal theory. The latter assumes that markets are natural and that freer markets promote wealth. In contrast, Economic norms theory shows how market-contracting is a learned norm, and state spending, regulation, and redistribution are necessary to ensure that almost everyone can participate in the “social market” economy, which is in everyone’s interests. One proposed mechanism for world peace involves consumer purchasing of renewable and equitable local food and power sources involving artificial photosynthesis ushering in a period of social and ecological harmony known as the Sustainocene.
Why is impersonal market oriented economy favored over personal clientelist economy?
- A.
It generates more revenue for the nation
- B.
It is more productive for the nation
- C.
It promotes peace within nations
- D.
It is liked by the government
Attempted by 159 students.
Show answer & explanation
Correct answer: C
Answer: It promotes peace within nations.
Why this is correct:
Market-oriented socio-economies rely on impersonal market exchanges and contracts enforced impartially by the state, creating loyalty to the state rather than to narrow groups.
Economic interdependence means individuals and nations are better off when others in the market are better off, so harming others (through war or internal violence) becomes economically disadvantageous.
The passage explicitly states that market-integrated nations tend to agree on global issues and that no fatalities have occurred in disputes between them, supporting the claim that market-oriented economies promote peace within and between nations.
Therefore, the passage favors impersonal market-oriented economies because they foster impartial rule of law and mutual economic dependence, which reduce incentives for internal and international conflict.