Q. Consider the following statements:
1. Socialism advocates complete opposition to the market economy.
2. Liberalism promotes minimum role of state.
Which of the statements given above is/are correct?
Exp) Option b is the correct answer
Statement 1 is incorrect. Socialism refers to a set of political ideas that emerged as a response to the inequalities present in, and reproduced by, the industrial capitalist economy. The main concern of Socialism is how to minimise existing inequality and distribute resources justly. Although advocates of socialism are not entirely opposed to the market, they favour some kind of government regulation, planning and control over certain key areas such as education and health care.
Statement 2 is correct. Historically, liberalism favoured free market and minimal role to the state. However, present day liberalism acknowledges a role for welfare state and accepts the need for measures to reduce both social and economic inequalities.
