10th January, 2017 (CSAT)


One of the most fateful errors of our age is the belief that ‘the problem of production’ has been solved. Things are not going as well as they ought to be going must be due to human wickedness. We must therefore construct a political system so perfect that human wickedness disappears and everybody behaves well. In fact, it is widely held that everybody is born good; if one turns into a criminal or an exploiter, this is the fault of ‘the system’. Modern man talks of a battle with nature, forgetting that, if he won the battle, he would find himself on the losing side. The illusion of unlimited powers, nourished by technological achievements, has produced the concurrent illusion of having solved the problem of production. The later illusion is based on the failure to distinguish between income and capital where this distinction matters most. Every economist and businessman is familiar with the distinction and applies it conscientiously to all economic affairs except the irreplaceable capital which man has not made but simply found and without which he can do nothing. For larger is the capital provided by nature and not by man and we do not even recognize it as such. This larger part is now being used up at an alarming rate and that it why it is an absurd and suicidal error to believe and act on the belief that the problem of production has been solved.


1. According to the author, the problem of production has not yet been solved because

(a) inspite of the huge and cry the world over, man is still exploiting his resource base (i.e., nature), to reduce the level of exploitation

(b) of man’s failure to realize that his economic activities are adversely affecting nature

(c) technology is yet to be transferred to developing countries

(d) the detrimental effect that the new technologies have when used for achieving economic goals


2. Identify the statement that cannot be attributed to the author with regard to the control of the systems of society.

(a) Faulty systems tend to breed wickedness

(b) The problem of production is the real reason behind the evils or problems of society

(c) All present-day systems have a certain inbuilt error

(d) A perfect political system would have all good citizens


3. Why would man find himself on the losing side if he were to conquer nature for economic progress?

(a) He is not destined to win this one-sided battle

(b) The benefits of scientific and technological development are merely illusory

(c) In conquering nature, he would be killing the goose that lays the golden eggs

(d) He is handicapped by a faulty understanding of the issues related to income and capital

Tomorrow: Next questions for practice

For previous questions refer yesterday’s post

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