IGNOU FREE BSOG-176 Economy and Society Solved Guess Paper 2025

Q1. Explain the sociological meaning of economy and discuss the relationship between economy and society.

In sociology, the economy is not viewed merely as a system of production, distribution, and consumption of goods and services, but as a deeply social institution shaped by culture, power, norms, and social relationships. The sociological meaning of economy emphasizes that economic activities are embedded within social structures such as caste, class, family, religion, gender, and political power. Economic behavior is therefore not purely rational or profit-oriented, as assumed in classical economics, but is influenced by social values, traditions, and institutions.

The relationship between economy and society is mutual and dynamic. On the one hand, economic systems shape social life. For example, industrialization transformed traditional societies by creating new classes such as the bourgeoisie and the working class. It changed family structures, urbanized populations, altered gender roles, and created new forms of inequality. Capitalist economy promotes competition, individualism, and consumerism, while socialist economies emphasize collective ownership and welfare.

On the other hand, society also shapes the economy. Cultural beliefs determine what is produced and consumed. Social norms regulate labor participation, wages, and working conditions. In India, caste and gender strongly influence occupational structures. Traditionally, certain castes were restricted to specific occupations, and even today women face unequal access to economic opportunities. Thus, economic opportunities are socially distributed, not equally available to all.

Power relations also influence the economy. Those who control land, capital, and technology dominate economic resources and decision-making. The poor and marginalized remain dependent on them. This creates economic inequality, exploitation, and poverty. Political institutions further shape economic policies through taxation, welfare programs, labor laws, and trade regulations.

Karl Marx viewed the economy as the foundation of society, arguing that economic relations determine social institutions such as religion, law, and politics. In contrast, Max Weber emphasized the role of culture and religion in shaping economic behavior, as seen in his analysis of the Protestant ethic and capitalism. Polanyi argued that the economy is embedded in society and cannot be separated from social relations.

Thus, economy and society are inseparable. Economic systems influence social structures, and social institutions shape economic behavior. A purely economic understanding of development fails unless it is integrated with social realities like inequality, exploitation, and cultural diversity.

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Q2. Describe the main forms of exchange and their social significance.

Exchange is a fundamental economic and social process through which goods, services, and resources are transferred among individuals, groups, and societies. From a sociological perspective, exchange is not only an economic transaction but also a social relationship carrying meanings of trust, obligation, power, and solidarity.

One important form of exchange is reciprocal exchange, which is common in traditional and tribal societies. It involves the mutual giving and receiving of goods without immediate calculation of profit. For example, gift exchange during festivals, marriages, or rituals strengthens social bonds and solidarity. In reciprocal exchange, social relationships are more important than monetary value.

The second major form is redistributive exchange, where goods and resources are collected by a central authority and then redistributed among members of society. In traditional societies, kings or chiefs played this role. In modern societies, the government performs redistributive functions through taxation, welfare schemes, subsidies, and public services. Redistribution promotes social stability and reduces inequality.

The third form is market exchange, based on buying and selling through money. Goods and services are exchanged at prices determined by demand and supply. Market exchange dominates capitalist economies and is guided by profit and competition. While it increases efficiency and economic growth, it also leads to exploitation, inequality, and commercialization of social life.

A fourth form is barter exchange, where goods are directly exchanged without money. This type exists mostly in small communities and during economic crises when currency loses value.

Sociologically, exchange systems shape social relationships. Reciprocal exchange strengthens community ties, while market exchange promotes individualism. Redistribution can promote social justice if effectively implemented.

Exchange also involves power relations. In markets, powerful sellers and corporations often dominate weak consumers and laborers. Global exchange systems also reflect inequality between developed and developing nations.

Thus, forms of exchange are not only economic mechanisms but also social processes that shape trust, inequality, cooperation, and conflict in society.

Q3. Explain the concept of Mode of Production and discuss its major types.

The concept of mode of production is central to Marxist sociology and refers to the way a society organizes the production of goods and services. It includes two main components: forces of production (tools, technology, labor, and skills) and relations of production (social relationships between those who own the means of production and those who work on them). Together, these determine the economic structure of society.

One of the earliest modes is the primitive communal mode of production, in which ownership of land and resources was collective. There were no classes, no private property, and production was for survival, not profit.

The slave mode of production emerged when human labor itself became property. Slaves were owned and forced to work without rights. This mode existed in ancient civilizations like Greece and Rome.

The feudal mode of production was based on land ownership. Lords owned land while peasants worked on it in exchange for protection. Production was mainly agricultural, and exploitation was based on rent and forced labor.

The capitalist mode of production is based on private ownership of the means of production and wage labor. Capitalists own factories and machines, while workers sell their labor for wages. The main aim is profit. This mode creates class conflict between the bourgeoisie and the proletariat.

The socialist mode of production aims at collective or state ownership of means of production, with production organized for social welfare rather than private profit.

Marx argued that history moves through conflict between classes as each mode of production creates contradictions that lead to its transformation. Thus, modes of production explain how economic systems shape class structure, power relations, and social change.

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Q4. Discuss the relationship between class, economy, and social inequality.

Social class refers to groups of people who share similar economic positions based on income, occupation, wealth, and access to resources. The structure of the economy plays a decisive role in shaping class divisions and social inequality. In capitalist societies, class differences emerge mainly between those who own the means of production and those who depend on wages.

The upper class controls wealth, industries, land, and financial institutions. The middle class consists of professionals, small business owners, and salaried employees. The working class depends on manual or low-paid labor. The poor and marginalized often struggle for survival with little security.

Economic inequality leads to unequal life chances. Upper classes enjoy better education, health care, housing, and political influence. Lower classes face unemployment, poor living conditions, exploitation, and social exclusion. Inequality is reproduced across generations.

In India, class inequality overlaps with caste, gender, and region. Dalits, Adivasis, women, and rural poor are disproportionately represented in lower economic classes. Even with constitutional equality, access to wealth and power remains unequal.

Globalization has intensified class inequalities. While corporate elites and middle classes gained new opportunities, informal workers faced insecurity and job losses. Thus, economic growth has not ensured social justice.

Class inequality affects democracy, social mobility, education, and health. It produces social conflict, crime, and political instability. Therefore, reducing inequality requires structural reforms in land distribution, education, employment, taxation, and welfare.

Q5. Examine major contemporary issues related to economy and society.

Contemporary societies face several interconnected economic and social challenges that reflect deep structural contradictions. One of the most serious issues is unemployment and job insecurity, particularly due to automation, contract labor, and shrinking public sector employment. Young people face uncertainty despite education.

Economic inequality has sharply increased. A small elite controls a large share of global wealth, while millions remain poor. This creates social unrest and weakens democracy.

Informalization of labor is another major issue. Most workers in developing countries lack job security, social protection, health insurance, and fair wages.

Gender inequality in the economy remains persistent. Women perform most unpaid care work yet face wage gaps and limited leadership roles.

Environmental crisis is closely linked with economic activity. Climate change, pollution, deforestation, and water scarcity are consequences of unsustainable development.

Globalization and cultural change have promoted consumerism but weakened local economies and traditional occupations.

Thus, contemporary economic issues are not purely economic but deeply social. Addressing them requires integrated solutions combining economic planning, social justice, gender equality, environmental sustainability, and democratic governance.

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Q6. Discuss Karl Marx’s views on economy and society.

Karl Marx provided one of the most influential sociological interpretations of the relationship between economy and society. According to Marx, the economic structure of society forms its foundation, and all other institutions such as religion, law, politics, education, and culture arise from this base. This idea is known as historical materialism. He argued that the way people produce goods (mode of production) determines how society is organized.

For Marx, every mode of production consists of forces of production (technology, labor, tools) and relations of production (social relations between owners and workers). These relations create social classes. In capitalist society, the two main classes are the bourgeoisie (owners of capital and means of production) and the proletariat (workers who sell their labor). The bourgeoisie controls economic resources and exploits workers by paying them less than the value of what they produce. Marx called this exploitation the extraction of surplus value.

Marx viewed society as a site of constant class struggle. He argued that history progresses through conflict between dominant and subordinate classes. Under capitalism, the conflict between capitalists and workers is inevitable due to inequality, exploitation, and alienation. Workers are alienated from the product of their labor, the process of work, their fellow workers, and even their own human potential.

Marx also believed that the capitalist economy is unstable and full of contradictions. Overproduction, unemployment, economic crises, and growing inequality weaken capitalism from within. He predicted that capitalism would eventually collapse and be replaced by socialism, where the means of production would be collectively owned, and exploitation would end.

In Marx’s view, social change is driven primarily by economic factors rather than ideas or values. However, critics argue that Marx gave too much importance to the economy and ignored the independent role of culture, religion, and politics. Despite criticism, Marx’s ideas remain crucial for understanding class inequality, labor exploitation, and power relations in modern society.

Q7. Explain Max Weber’s views on economy and society.

Max Weber offered a different and more multidimensional understanding of the relationship between economy and society. Unlike Marx, who emphasized the dominance of economic structure, Weber believed that economy is shaped by culture, values, ideas, religion, and power as much as it shapes society. According to Weber, economic behavior cannot be explained only through material conditions.

One of Weber’s most famous contributions is his work on The Protestant Ethic and the Spirit of Capitalism. He argued that modern capitalism did not grow only due to economic factors but was strongly influenced by religious values, especially Protestant ethics. The Protestant belief that hard work, discipline, savings, and success in work were signs of God’s blessing encouraged people to invest profits and expand production. This cultural mindset helped the rise of capitalism in Europe.

Weber also introduced a broader concept of class, which included not only economic ownership but also status (social honor) and power (authority). For him, society is stratified not only by wealth but also by social prestige and political influence. Thus, inequality exists in multiple dimensions.

Weber emphasized the process of rationalization, which dominates modern economic life. Rationalization means organizing society based on efficiency, calculation, rules, and predictability. Bureaucracy is the best example of this process. Modern industries, banks, governments, and corporations operate through bureaucratic structures. While rationalization increases efficiency, Weber warned that it also creates an “iron cage” of control, where individuals lose freedom and creativity.

Weber’s approach shows that economy and society influence each other in complex ways. Culture shapes economic systems, and economic institutions reshape culture and social life. His ideas provide a balanced alternative to economic determinism and help us understand capitalism as not just an economic system but also a cultural and social order.

Q8. Explain Karl Polanyi’s idea of embeddedness of economy.

Karl Polanyi made a major contribution to economic sociology through his concept of embeddedness. He argued that in traditional societies, the economy was always embedded in social relationships, moral values, customs, and institutions. Economic activities were governed by social needs and collective welfare rather than by profit alone.

According to Polanyi, in pre-capitalist societies, economic life was organized mainly through reciprocity, redistribution, and householding. Reciprocity involved mutual exchange within communities, redistribution involved central authorities collecting and sharing resources, and householding involved production for family needs. These systems strengthened social bonds and community solidarity.

Polanyi argued that modern capitalism created a “disembedded economy”, where market forces became independent of social control. In capitalist societies, land, labor, and money were turned into commodities, even though they are not produced for sale like ordinary goods. This led to serious social problems such as unemployment, poverty, environmental destruction, and exploitation.

He explained this process through the concept of the “double movement”. On one side, the market expands and tries to control all aspects of life. On the other side, society reacts by demanding protection through labor laws, welfare policies, and state regulation. The welfare state emerged as society’s response to the destructive effects of the free market.

Polanyi strongly opposed the idea that markets are natural and self-regulating. He believed that unregulated markets destroy society and nature. Therefore, economic systems must always be socially regulated.

His ideas are highly relevant today in the age of globalization, where uncontrolled markets have produced massive inequality, environmental crises, and job insecurity. Polanyi’s theory reminds us that the economy must serve society, not dominate it.

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Q9. Discuss the impact of globalization on economy and society.

Globalization refers to the growing interconnectedness of the world through trade, investment, technology, communication, and cultural exchange. It has profoundly reshaped both the economy and society, especially in developing countries like India.

On the economic side, globalization has promoted foreign investment, multinational corporations, export industries, and service sectors such as IT and finance. It created new jobs, expanded consumer markets, and increased economic growth in certain regions. Many urban middle-class groups benefitted from better income, global careers, and modern lifestyles.

However, globalization also produced serious inequalities. Small farmers, traditional artisans, and informal workers often lost livelihoods due to competition with cheap imports and large corporations. Job security declined due to contract labor and outsourcing. Regional disparities widened between urban and rural areas.

Socially, globalization brought cultural change and consumerism. Global brands, media, food habits, and fashion transformed everyday life. While this increased choices, it also weakened local traditions, languages, and community-based economies.

Globalization also intensified environmental damage through mining, industrial pollution, deforestation, and climate change. Displacement of tribal and rural communities increased due to large development projects.

Politically, globalization reduced the control of national governments over economic policies as international institutions and corporate interests gained more power. Welfare policies were weakened in favor of market efficiency.

Thus, globalization has a dual impact: it created growth and new opportunities for some, but also deepened inequality, insecurity, cultural erosion, and environmental crisis. A socially regulated and inclusive form of globalization is necessary for balanced development.

Q10. Examine the problem of informalization of labour in contemporary society.

Informalization of labour refers to the growing trend where a large proportion of workers are employed in insecure, unregulated, and low-paid jobs without legal protection or social security. Today, most workers in developing countries like India are part of the informal sector, including street vendors, construction workers, domestic workers, agricultural laborers, and gig workers.

The rise of informal labour is closely linked with globalization, privatization, and technological change. To reduce costs and increase profits, companies avoid permanent workers and prefer contract-based, temporary, or outsourced labor. Automation and digital platforms have also created gig work that lacks job security.

Informal workers face many problems: low wages, long working hours, unsafe conditions, absence of health insurance, pension, paid leave, and legal protection. Women are overrepresented in informal work and face double exploitation—economic insecurity and domestic burden. Child labour is also concentrated in the informal sector.

Socially, informalization increases poverty, inequality, and vulnerability. Workers remain trapped in a cycle of insecurity with no upward mobility. The COVID-19 pandemic exposed the deep crisis of informal workers when millions lost jobs and had no social safety net.

Although governments have introduced welfare schemes for informal workers, implementation remains weak. Trade unions also struggle to organize informal workers due to scattered workplaces and fear of job loss.

Thus, informalization is not just an economic issue but a major social problem affecting dignity, security, and social justice. Ensuring decent work for all requires strong labour laws, social protection, and inclusive economic policies.

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