English Language · English

Read the following passage carefully and answer the question that follows. Globalisation, liberalisation, and the free market are dominant themes in modern economic thought. Many economists in India are strongly influenced by the idea that market forces should determine everything, especially prices. This belief dismisses any pricing mechanism outside the aggregate decisions of consumers as abnormal or harmful. However, in industrialised societies, price-fixing is not only normal but essential for the functioning of the economy. The development of modern industry naturally leads to a system where a few large firms dominate. These firms, while competing, also share common interests, especially in maintaining stable demand. As a result, they avoid aggressive price-cutting, not through explicit collusion, but through mutual understanding of their shared economic environment. This form of implicit price-fixing stabilises the market and supports long-term planning. Economists often overlook this phenomenon because it does not fit the classical model of open, competitive pricing or overt collusion. Furthermore, the belief that the unregulated free market is the most efficient system ignores evidence from non-socialist economies. Many of these countries openly or tacitly practice price-fixing—either through cartels or industry agreements—yet show no signs of economic stagnation or inefficiency. If the free market were inherently more efficient, these nations would have underperformed. However, the opposite is often true, suggesting that price-fixing, far from being detrimental, can be a functional and even necessary aspect of a stable and thriving industrial economy. What is the central theme of the passage?