SECTION B
Essay
125 marks
Can capitalism bring inclusive growth?
WRITE IN
90 min
1,000–1,200 words
Reading the topic
The topic asks whether market capitalism can deliver growth that benefits all. The examiner expects a balanced analysis of capitalism's record in creating wealth and its tendency to concentrate it, and the role of the state, regulation and social policy in making growth inclusive.
ThesisCapitalism generates growth efficiently but becomes inclusive only when a capable state ensures fair competition, public goods and redistribution.
Dimensions to cover
- 1Growth: markets have lifted millions out of poverty in China and India through investment and trade
- 2Inequality: returns on capital can outpace growth, concentrating wealth
- 3Regulation: monopolies and crony capitalism exclude small players, so competition law matters
- 4Public goods: health, education and infrastructure must be ensured by the state for inclusion
- 5Corporate responsibility: business can contribute to social goals beyond profit
- 6Models: Nordic economies combine markets with strong welfare, showing inclusive capitalism
Counter-view
- Critics argue capitalism inherently produces inequality and cannot be inclusive. The essay should accept its tendencies but show how mixed economies have made it more inclusive
Open and close
- Open: Open with two neighbours in Mumbai: a tech entrepreneur whose company grew tenfold and a domestic worker whose wages barely moved
- Close: Conclude that capitalism can be inclusive when markets create wealth and the state ensures all share in it
Where marks usually go
- Writing an ideological tract for or against capitalism instead of testing whether it can include the poor
- Treating inclusive growth as only welfare spending and ignoring competition, jobs and crony capture
- Quoting wealth-share figures from memory without year and source
Examples that fit
- ThinkerThomas Piketty argued that when returns on capital exceed growth, inequality rises unless checked by policy.Thomas Piketty, Capital in the Twenty-First Century (2014)
- CaseIndia's 11th Five Year Plan (2007-12) made 'faster and more inclusive growth' its central theme.Planning Commission, Eleventh Five Year Plan document
- CaseSection 135 of the Companies Act, 2013 requires large companies to spend 2 percent of average net profits on CSR.Companies Act, 2013, Section 135
- ThinkerRaghuram Rajan and Luigi Zingales argued that capitalism must be protected from incumbents who stifle competition.Raghuram Rajan and Luigi Zingales, Saving Capitalism from the Capitalists (2003)
- CurrentIn 2019 the US Business Roundtable redefined corporate purpose to serve all stakeholders, not just shareholders.Business Roundtable, Statement on the Purpose of a Corporation, 2019