Globalisation, liberalisation, and the free market are dominant themes in modern economic thought. Many economists in India are strongly influenced by the idea that market forces should determine everything, especially prices. This belief dismisses any pricing mechanism outside the aggregate decisions of consumers as abnormal or harmful. However, in industrialised societies, price-fixing is not only normal but essential for the functioning of the economy.
The development of modern industry naturally leads to a system where a few large firms dominate. These firms, while competing, also share common interests, especially in maintaining stable demand. As a result, they avoid aggressive price-cutting, not through explicit collusion, but through mutual understanding of their shared economic environment. This form of implicit price-fixing stabilises the market and supports long-term planning.
Economists often overlook this phenomenon because it does not fit the classical model of open, competitive pricing or overt collusion. Furthermore, the belief that the unregulated free market is the most efficient system ignores evidence from non-socialist economies. Many of these countries openly or tacitly practice price-fixing—either through cartels or industry agreements—yet show no signs of economic stagnation or inefficiency. If the free market were inherently more efficient, these nations would have underperformed. However, the opposite is often true, suggesting that price-fixing, far from being detrimental, can be a functional and even necessary aspect of a stable and thriving industrial economy.
Select the most appropriate synonym of the word given in the passage.
Pernicious
Understanding the Synonym of Pernicious in the Passage
The question asks to identify the most appropriate synonym for the word "pernicious" as used in the provided passage about economic theories. To answer this, we first need to understand the meaning of "pernicious" and then see how it fits within the context of the passage.
Meaning of "Pernicious"
"Pernicious" means having a harmful effect, especially in a gradual or subtle way. It suggests something that causes damage or destruction, often over time.
Contextual Analysis in the Passage
The passage discusses economic ideas like globalization, liberalization, and the free market. It presents a viewpoint that emphasizes market forces determining prices, but then contrasts this with the reality of industrialised societies where price-fixing, often implicitly, is seen as normal and essential for stability. The word "pernicious" might be used to describe a belief or practice that is considered harmful to the economy or to sound economic understanding. For instance, the passage critiques the dismissal of pricing mechanisms outside pure market forces, suggesting that such dismissal, or the unrestricted free market ideology itself, could potentially have harmful consequences.
Evaluating the Options
Let's examine each option to find the best synonym for "pernicious":
- Inefficient: While something pernicious can lead to inefficiency, "inefficient" itself doesn't fully capture the idea of causing harm or damage. It focuses on a lack of productivity rather than detrimental effects.
- Destructive: This word means causing great damage or harm. It aligns very closely with the core meaning of "pernicious," which implies causing serious damage.
- Useful: This is the opposite of harmful and therefore cannot be a synonym for "pernicious".
- Harmless: This is also the opposite of harmful and is therefore incorrect.
Conclusion
Based on the meaning of "pernicious" and its potential use in the passage to describe something harmful or damaging, "Destructive" emerges as the most fitting synonym among the given options. It accurately reflects the negative and damaging connotation of the word.
Important Questions from Reading Comprehension
Why, according to the writer can't people be motivated to use a resource prudently?
1. They feel that others may overuse the resource
2. It is possible to substitute the resource
3. Abundance of the resource availability
Select the correct answer using the code given below:
When do people use resources exhaustively?
The self-interest of people affects the use of renewable resources
People rooted in a locality
Which among the following is closest in meaning with the word 'deplete'?
