Breaking down the question
The instruction is to analyse, not merely describe — the examiner wants a reasoned account of how the spread of the market economy reshapes the social fabric of traditional societies, weighing losses against gains rather than cataloguing effects at random.
The key contrast is between two ways of organising economic life. In a traditional society the economy is embedded in social relations — production and exchange are governed by kinship, custom, caste, reciprocity and religious obligation. A market economy inverts this: goods, land and labour become commodities exchanged for money at prices set by supply and demand, and economic activity is pulled out of its social matrix. Karl Polanyi named this the disembedding of the economy. A strong answer uses this framing to organise the social consequences that follow.
How to approach it
Open with the embedded–disembedded contrast to establish the analytical axis. Then move through the principal social impacts in a clear sequence — the transformation of relationships, of stratification, of values, and of institutions — illustrating each with the Indian example of the jajmani system or tribal economies where possible.
Keep the account balanced. The market corrodes older solidarities but also opens mobility and choice, and the best scripts register both faces. Anchor the discussion in named theorists — Tönnies on community and association, Marx on commodification, Polanyi on disembedding — and close with a judgement. The wider theoretical background is set out in our notes on theories of social change.
Model answer
A market economy replaces custom, reciprocity and status with money, price and contract as the organising principles of economic life. When it penetrates a traditional society, the effects reach far beyond the economy into kinship, community, values and stratification.
The most fundamental impact is the commodification and monetisation of what was previously governed by social obligation. Land held under communal or customary tenure becomes a saleable asset; labour once given through kinship or the jajmani system is now bought and sold as a wage. As Marx observed, market relations dissolve the older bonds and leave behind, in his phrase, the “cash nexus” as the link between people.
A second impact is the shift in the character of social relationships. Ferdinand Tönnies captured this as the movement from Gemeinschaft to Gesellschaft — from community founded on kinship, sentiment and shared belonging to association founded on contract, calculation and impersonal exchange. Reciprocal, face-to-face ties give way to instrumental and transient ones.
A third impact falls on social stratification. Traditional hierarchies of caste and status, based on ascription and ritual, are cut across by new class divisions based on ownership, market position and wealth. This can loosen the grip of ascriptive hierarchy and open avenues of mobility, but it also generates fresh inequalities and insecurities as households are exposed to market risk.
A fourth impact is on values and consciousness. The market fosters individualism, competition, acquisitiveness and consumerism in place of collective obligation and subsistence orientation. The rational, calculating outlook that Weber associated with modern capitalism spreads, eroding customary restraints and the moral economy of the community.
A fifth impact is institutional and demographic. Self-sufficient village and tribal economies are drawn into wider commodity and labour markets; artisans displaced by manufactured goods migrate to towns; the joint household weakens as members seek individual wage employment. Polanyi warned that treating land, labour and money as pure commodities threatens the social protections that once cushioned people, provoking counter-movements of resistance.
Yet the impact is not wholly negative. The market can free individuals from the bondage of caste and feudal dependence, widen opportunity, reward enterprise and integrate isolated communities into national life. The analysis, therefore, is one of ambivalence rather than simple decline.
In sum, the market economy disembeds economic activity from its social moorings, replacing community with contract, status with class, and reciprocity with money — a transformation that is at once liberating and disruptive for the traditional societies it reshapes.
Examiner's perspective
For a fifteen-mark answer the examiner looks for analysis anchored in theory, not a loose list of effects. The strongest scripts use Polanyi's disembedding and Tönnies's Gemeinschaft–Gesellschaft as an organising spine, and connect commodification, changing stratification and shifting values into a coherent argument.
The common weakness is a one-sided lament that the market simply destroys tradition. Candidates who acknowledge the ambivalence — new inequalities alongside new freedoms and mobility — and who cite Marx, Weber and Polanyi to ground the claims, present the balanced, evidence-led response the paper rewards. A concluding line on the double-edged character of market penetration gives the answer analytical finish.