Question - 1
Directions (1 - 7): Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.
Brexit has evoked a spate of comments. These comments fall into broadly two categories. The first set of comments focuses on the short-term and medium- term impact of Brexit on the U.K. Europe and the rest of the world including India. The second goes into the reasons behind this decision of the British. Globalisation has been interpreted in many ways. In broad terms, globaalisation denotes the free movement of goods, services, capital, funds, ideas, technology and people across countries. Many people think globalization is a recent phenomenon. This is not true. This has been going on for centuries. What has made it unique in recent times is the speed of the movement. Great Britain and many other countries in Europe have reached the present level of economic development only because of this free movement. In both demographic and geographic terms. Britain is a small country. It is not the size of the domestic market that determined its growth. London could not have emerged as the financial centre of the world but for the free flow of capital.
The gamut of financial services offered by London is geared to meet world demand and not that of Britain alone. Even after the exit from the EU, Britain cannot remain as an isolated island. It has to be part of an international trade regime which allows for free trade. What then could have motivated a little more than 50 per cent of the population to come out of the EU? It has something to do with the nature of the relationship within the EU. The EU has evolved over the last seven decades. Form a loose arrangement, it has become a tight bureaucratic organisation with its emphasis on efficiency (since goods and services will get produced at the least cost centres), can lead to greater inequality theoretically.
Within a country also, the more efficient including professionals gain disproportionately. This situation gets worse if economies are growing slowly. The U.S. has always prided itself on saying that the system they have is ‘people’s capitalism’. Inequalities do not matter much when economies are growing strongly and when new entrants to the labour force find employment easily. Countervailing measures are needed to take care of the adverse impact of globalization. For this reason, we cannot throw the baby out with the bathwater. The developed countries face a serious dilemma. They have reached a stage in their development when further growth will be slow. This will have implications for absorbing the labour that gets added to the market. Complication the situation is technological development which is increasingly labour- saving. New technologies have a twofold impact. First, they reduce the demand for labour in general. Second, in particular they make unskilled and semi-skilled work redundant. They demand new skills for which retraining may be needed. Distribution of income has become an issue which needs to be dealt with directly. Brexit is not a blow against globalization per se. Labour does not stand in the same category as capital, even though both are factors of production. Migration hurts when the economy is at a low ebb. Britain, along with other developed countries, faces a basic problem of coping with a growth potential which is far lower than the growth rate they had seen before 2008.
Question - To What aspect this article is devoted by the author?