Question 1:

What does Schumacher mean when he says "Problem of production is not solved" ?

The Problem of Production according to Schumacher is that Adequate goods can be

produced always, but the fact is that natural resources which are used in production are finite which
is forgot by man most of the times. The assumption that is made by most of the Capitalists is that
Capital = Income which is completely wrong ( Because Free capital like soil, water, oil are treated
as income). But now a days, due to increase in production, Free capital is getting depreciated.( Ex :
amount of petroleum, coal is getting decreased.). They say thay are paying money for the resources
they are using, but that is not sustainable ( as some day, natural resources which are finite get over.).
Basic mistake is "Thinking that Capital is expendable.". But in reality Capital is inexpendable by
definition.(i.e which can be used always). For Ex: If 10 trees are cut and planted again, then it is
sustainable.

Modern man does not think as belonging to nature but as a tool to exploit it. But in that
preocess, he is forgetting that it is he who is going to suffer if he goes in a war with nature. The
techonology now-a-days is in such a way as to exploit the nature. But, man thinks that through
scientific and technological achievements, the problem of production is solved.
Example where the natural resources which is treated as Free capital is getting exhausted is the
forest of Bamboo trees at Kagaz nagar in the outskirts of Andhra Pradesh. The paper Factory which
was set up there consumed almost the whole of the bamboo forest leading to resource depletion
which is not taken care of.

Question 2 :

What do you understand by "Exclusive Market" and "Inclusive Bazaar" ?. Give Examples.

• In a market, all one can talk about is material transactions wheras in a Bazaar, everything is
included(relationships) including material transactions.
• A bazaar is a place where people exchange values.
• The viewpoint towards something is missing in a market.
• Market is where something which is not of any utility is kept out.
• Bazaar is inclusive of relationships.
• Bazaar is a traditional form of Market.
• In modern maket, ethics are kept out, but in a Bazaar they are valued.
• In a market, only money is valued.
• In a market, the only things concerned about are Production and Consumption.

Examples : In olden days, people used to have a market once a week which is a kind of Bazaar,
where people used to have fun, meet their relatives( for some that would be a meeting place too),
children used to have fun. In a Bazaar, some kind of relationship is established between the buyer
and seller. The consumer gets knowledge about how the goods are produced.
The example of a market is the modern day market( Shopping Malls), where people bother only
about the price of the goods they are buying, they do not have any knowledge of how the goods are
produced.