The view, that once markets are properly freed from government intervention, racist practices and caste-based rewards will wilt under competitive pressure and ultimately wither away, is plain wrong. In the case of caste practices we know that these rose to prominence in India when there was very little government and, the logic of this note shows that they can flourish very well in the absence of government. Indeed once we try to understand markets, cutting ourselves free from the chord- call it umbilical if you wish- of methodological individualism, this is not difficult to see at all.from this paper, Participatory Equity and Economic Development: Policy Implications for a Globalized World, by Kaushik Basu. referring to a study on the garment industry in tirupur (so often cited by several analysts to make the point that caste plays a positive role in our economy), he tells us:
....the Gounders- an elite cultivator caste that has had a history of being prominent in business and finance- controls a disproportionate amount of capital. The Gounders are a close-knit community and when they go into business they do so with a greater abundance of capital than do the non-Gounders, who comprise 42% of the exporters of Tirupur in the sample that Banerjee and Munshi study.if it weren't for caste, an equally qualified dalit given equal access to capital would probably be more successful than a reddy in the bulk drugs industry in hyderabad, a rajaka moviemaker would make more successful films than a kamma, a pardhi would be more successful than a gujarati/marwari bania as a stockbroker in dalal street, a pasi would be a better prime minister than a brahmin or a khatri or a rajput.
What these authors manage to demonstrate is that capital in the hands of non-Gounders is as productive or even slightly more productive than in the hands of the Gounders. Output is smaller in a new non-Gounder firm compared with a Gounder firm but the former typically cross over the Gounder firm in five years time.
Why then are the Gounder firms flush with capital? Banerjee and Munshi conclude, rightly, that this suggests the presence of 'community effects'. Clearly community identity matters per se.
thanks to caste, it'll be very, very long...too long before you witness any of those events and not flinch or gasp.. meanwhile, do read and enjoy this piece of wisdom from a commenter on my last post:
look at the quality of non-uppercaste elected members in the parliament and legislative assemblies - so many of them are rapists, murderers, bandits, fraudsters.
Are these role models for the so-called underprivileged, or is it that these are the best they can throw up from their midst?