CASTISM

Congress leader Janardan Dwivedi calls for end to caste-based quotas
TIMESVIEW

Economic criteria matter more

In 1950, the Constitution of India provided for caste-based reservation in government jobs, but only for a decade. The idea was to then observe what social progress it had delivered and re-evaluate what measures were needed for further progress. The idea was never to perpetuate a tyranny of inherited identities. Unfortunately, as caste-based reservation degenerated into a crass tool of electoral instrumentalism, it became anathema for political parties to debate it honestly. Congress general secretary Janardan Dwivedi has made a radical statement in this context, that it is time to dismantle caste-based quotas. Reservation should now be based on people's economic condition.

Dwivedi correctly points out that the prevailing formula does not benefit really needy persons, with all its privileges corralled by a creamy layer instead. Even more boldly, he urges Rahul Gandhi to take the lead in dismantling this dysfunctional system, which may have bolstered the boundaries of caste more than the ramparts of equality. Of course his party politics have hitherto been tied to quota expansionism, including by pushing for caste-based reservations in job promotions. Dwivedi's point is that when UPA-III is being talked about, Rahul should show Congress has the courage to replace failed, illusory policies with future-oriented instruments of justice.

There is a difference between social justice and casteism, as Dwivedi underlines. Caste-based reservation is not at all synonymous with real equality of opportunity. That is dependent on a host of background conditions, such as urbanisation, economic growth, job opportunities and availability of quality education at primary and secondary levels. The last can be a real game-changer, but no political party pays much attention to it. Reservation in jobs or higher education can hardly help those whose basic skill-building has been neglected. It's time for new modes of redressing casteism 67 years after Independence.


COUNTERVIEW

Caste quotas ensure social justice

Chandan Nandy

India must continue with caste-based affirmative action to stamp out generations of injustice and to stop the gap getting even worse. Successive governments at the Centre and in the states have failed to stamp out caste discrimination. Minorities, including not only scheduled castes and scheduled tribes but also those belonging to other socially and economically backward communities, have been denied justice. Claims that all sections of the population can succeed on their own merit without a quota system or additional government measures overlook historical disadvantages suffered by people at the bottom of the social and economic ladder.

In India disadvantages, such as lack of access to jobs or being denied political power, are pervasive. Dalits in UP or Bihar or other low-caste Hindus across states continue to face discrimination and exclusion, besides being made targets of violence. Laws like the Prevention of Atrocities Act, 1989, have benefited very few. Worse, a lack of political will to protect the rights of caste-based minorities has stymied development programmes and welfare measures designed to uplift marginalized groups.

That 33,670 cases of crimes against STs were reported in 2011 is testimony to descent-based intolerance in a stratified society. Instead of fashioning their manifestos and campaign slogans around empty promises of ameliorating the lot of the socially and economically weaker sections, ruling parties must continue with and deepen affirmative action programmes that will guarantee their equal status and human rights. Imposed from top, positive discrimination is the most effective means to gradually end the social exploitation of certain vulnerable sections of the population when powerful forces are as keen to safeguard their social and economic power. Instead of throwing out the baby with the bathwater, what we need to do is refine the quota system so that creamy layers are excluded.

Caste as Social Capital

The Tiruppur Story

Like caste, its defenders too have a number of avatars. The most recent one is being promoted by proponents of the free market and Hindu right-wing ideologues. They view caste as a “driver of development” and as a form of “social capital”. Taking his cue from the book Trust: The Social Virtues and the Creation of Prosperity where Francis Fukuyama argues that culture constitutes 20% of the missing element in economics, S Gurumurthy, ideologue and convenor of the Swadeshi Jagaran Manch,¹ looks at caste as the missing cultural element in the Indian context. He claims that caste is a safety net or a shock absorber that counteracts the problems posed by an expanding individualistic and acquisitive ethic. As he reasons,

Caste is a very strong bond. While individuals are related by families, castes link the families. Castes transcended the local limits and networked the people across. This has prevented the disturbance that industrialism caused to neighbourhood societies in the West, resulting in unbridled individualism and acute atomisation.²

Gurcharan Das, writer and newspaper columnist, and R Vaidyanathan of the Indian Institute of Management-Bangalore (IIM-B), make similar arguments. Das argues that the caste structure provides rules of self-restraint which smoothen market functioning by providing the required trust between economic agents. Caste also, according to him, provides knowledge and capital. He claims,

Instead of morally judging caste, I seek to understand its impact on competitiveness. I have come to believe that being endowed with commercial castes is a source of advantage in the global economy. Bania traders know how to accumulate and manage capital. They have financial resources and more important, financial acumen (Das 2002: 150, cited in Vaidyanathan 2012).

Vaidyanathan argues that given the putative positive role of caste in economic development, the cry to abolish caste is to “semitise” and “homogenise” Indian society and those who are critiquing caste are “rootless” metropolitan elites.He claims that those who use caste in business tend to be productive and upwardly mobile whereas those who deploy it in politics continue to lag behind.

Swaminathan S Anklesaria Aiyar, writing in The Times of India, too proposes a case for caste-based development through the concept of social capital. He argues, it is “the social glue that enables cohesive communities to pull together, help distressed members, mediate conflicts, penalise deviant behaviour and reward desirable behaviour, far more efficiently and cheaply than government mechanisms”.³ According to him, instead of worrying about negative aspects of the caste system, one needs to use it effectively through “caste-based development schemes”.

The industrial town of Tiruppur in Tamil Nadu is often pointed out as an example of how caste as social capital can propel development. For example, the World Development Report 2001 notes,

Tirupur was a world leader in the knitted garment industry. The success of this industry is striking. This is particularly so as the production of knitted garments is capital-intensive, and the state banking monopoly had been ineffective at targeting capital funds to efficient entrepreneurs, especially at the levels necessary to sustain Tiruppur’s high growth rates. The needed capital was raised within the Gounder community, a caste relegated to land-based activities, relying on community and family network (World Bank 2001: 175).

Gurumurthy echoes a similar sentiment:

These are community-driven models...I think it is only social capital which can do it. In my view, the community is the social capital in India. Take Tamil Nadu, for instance. The Naidus, the Kongu Goundars, the Nadars, and the Rajus took to commerce there. These communities developed financially, educationally and socially.⁴

The increasing recourse to the social capital theory in developmental discourse has however been critiqued extensively by Harriss (2001) and Fine (2010) among others. Based on their critique and empirical evidence from the knitwear industry in Tiruppur which has been held as a model for the “caste as social capital” argument, we point out that the proposition validates exclusionary practices and reinforces socio-economic hierarchies.

An Institution for Markets

The new avatar of caste as social capital has to be understood in the light of recent shifts in the discourse of development economics. From merely “getting prices right”, there has been a growing emphasis on “getting institutions right” which has shifted attention to identifying institutions including social ones like caste that can help markets work better. In particular, this shift coincides with the ascendance of what has been referred to as the post-Washington consensus. The call for “getting social relations right” symbolises the failures of the policy structure advocated by the Washington consensus. This has opened up space for the consideration of non-economic factors in economic development. Social capital is one such non-economic factor; and it has been used as an explanatory factor in developmental outcomes like income, education and health in recent years.⁵

There is no singular definition of what constitutes social capital. The World Bank (WB) defines it as “the norms and networks that enable collective action encompassing institutions, relationships, and customs that shape the quality and quantity of a society’s social interactions”.⁶ However, it is broadly defined as social networks based on horizontal and voluntary local associations and as resources that people have by virtue of their social relationships. The evolution of the concept of social capital has come from diverse routes.⁷ The concept of social capital initially developed by Pierre Bourdieu (2008) is much broader in its scope than what is currently being used in policy discourses. His notion of social capital rooted in social structures allows for emergence of social stratification through unequal distribution of this capital and a reinforcement of other sources of stratification. His thesis on forms of capital describes how cultural, social and economic capitals combine to enhance and expand the domain of exercise of power stemming from the economic.

The current version of social capital that permeates development economics is closer to the one developed by James Coleman, a Chicago-based functionalist and a rational choice sociologist (Coleman 1988). According to his argument based on methodological individualism, social capital which is produced through interaction between persons in a given social structure may become an asset in itself – like physical and human capital. This understanding has found its way into institutional and information-theoretic economics that emphasises the importance of social trust and networks in reducing information asymmetries and transaction costs (Fine 2010). Social capitals are divided into three operational categories. The capital that binds the members of a group together is referred to as “bonding” capital. It is supposed to produce a sense of identity and common purpose. The sort of capital that connects people from different social groups is defined as “bridging” capital. Finally, “linking” capital is expected to generate ties between the relatively weak and the powerful.

Coleman’s concept of social capital was applied by Robert Putnam (1994) in his study of Italy, Making Democracy Work: Civic Traditions in Modern Italy. This work has become paradigmatic, inspiring the application of the concept across disciplines. Putnam’s primary contention is that the better performance of northern Italy in comparison to the south is due to an early active engagement in community affairs, a dense network of local associations, and an egalitarian pattern of politics in the region. Critics have however shown that such difference is rooted in a particular agrarian structure and state formation in the northern region which perhaps has facilitated such civic engagement (Harriss 2001). In other words, the emergence of certain patterns of civic engagement too needs to be explained. Importing the concept of social capital to study differences in the US in a subsequent work, Putnam (2000) locates the current problem of differences in health, wealth and happiness amongst Americans in the lack of social capital.

Broadly, the current dominant paradigm of social capital gives primacy to civil society in understanding economic outcomes. It views civil society as a sort of equalising space devoid of power, privileges and conflict. That is, by voluntary association, everybody benefits from mutual cooperation and collectivism. However, what is missing in this story is the aspect of vertical and often exclusive nature of such associations, networks and civic engagements. As we shall see, caste continues to be the primary source of such exclusive networks in India.

Tiruppur: Claims and Realities

Tiruppur is a successful export hub in the country. It produces roughly 15% of the country’s cotton yarn and generates 45% of its knitwear exports (Damodaran 2008). The dynamics of industrialisation in the region have been characterised variedly as a decentralised form of capital accumulation, amoebic capitalism or as transformations of “non-corporate” capital (Chari 2004; Cawthorne 1995; Mahadevan and Vijayabaskar 2012). Indeed the region has witnessed rapid expansion and accumulation for over two decades, mostly through a dense agglomeration of networks of small and medium firms.

This widespread accumulation has been attributed to the successful entrepreneurship among members of the Gounder caste, an intermediate caste group with landed interests in western Tamil Nadu. They have mobilised capital more through family networks than through formal markets or state support, it is argued. Labour too is mobilised through firm-family and firm-farm-family networks. The disproportionate share of entrepreneurs from this caste in the manufacturing sector is revealing. For instance, 56% of the manufacturers registered with the South India Hosiery Manufacturers Association (SIHMA) are Gounders. The same situation prevails in the Tiruppur Exporters’ Association (TEA), a producer association for knitwear exporters (Chari 2004). The role of state intervention in industrialisation in Tiruppur has been circumspect, with Gounders themselves explaining their success in terms of their “toil” or uzhaippuin Tamil (ibid). As Chari points out, this representation as “self-made men” connotes not merely the prevailing social conventions among Gounders but also ways of working and exercising control over labour.

The significant point, however, is that the caste itself is highly differentiated as indicated by the multiple paths of entry into the knitwear industry and their subsequent growth trajectories.⁸ The movement of the richer peasants or those with bigger landholdings has been through investment of agrarian surplus whereas the entry of agricultural workers and many of the small and middle peasants is driven more by push factors rooted in the poor agricultural conditions in the region. Given the vagaries of dry land cultivation, agrarian incomes have historically been supplemented by income from non-farm activities in the form of dairying, seasonal employment in ginning and pressing in Tiruppur, etc. The growth of the knitwear industry and the declining prospects in agriculture led to a new mode of transition into the urban industrial economy. Increasingly, capital for investment in the knitwear industry was acquired through sale or mortgaging of agricultural land to raise capital for investments. This process has intensified over the last decade with the increasing unviability of agriculture on the one hand and rising land prices on the other.

Another route is based on “kashtakootu”, a distinct institution that draws upon kinship networks (Swaminathan and Jeyaranjan 1994). Workers with good work experience in this industry enter into a partnership with a relative who would invest the necessary capital. Thus, while the management of production would be taken care of by the worker-owner, the other partner would be involved in negotiating buyers, accessing new markets, etc. In a few instances, persons with assured access to one or many buyers would team up with a worker to set up a production unit. Yet another route of capital mobilisation, though not an openly acknowledged phenomenon, is through dowry. As a part of the dowry, the son-in-law, in addition to being given money for investment, would also come to establish links with other relatives who would then begin to place orders with his unit.

In addition to such kinship facilitated entry into entrepreneurship, there are a couple of other routes for Gounder workers to enter the industry. These are routes opened up as a part of the bigger firms’ strategy of capital accumulation, helping themselves against market uncertainties and avoiding legal obligations to labour. Bigger firms in order to escape fulfilling legal obligations to labour and to avoid problems of maintaining a large labour force, encourage long-standing workers, most often belonging to the same caste as that of the owners, to move out and set up units of their own. They were invariably supplied with second-hand machinery and orders to work on in the initial phases. Such provision of gratis capital was particularly prevalent during the 1970s and early 1980s. Given the low investment and technological requirements, especially in the earlier phase, workers often teamed up together to start a unit of their own. Mostly, it was done with the help of second-hand machinery with operations being carried out in household premises.

Since then, there has been an influx of white-collared employees from the formal sector, both public and private, teaming up with locals with a good knowledge of the industry to start export- oriented units. Else, they would work for a period of six months to one year in their friends’ or kin’s firms before setting up units of their own. With their social capital more attuned to the process of accessing global markets and loans from formal lending institutions, many of them have succeeded. Caste thus morphs into capital among the Gounders in Tiruppur, facilitating capital mobilisation for entry into the sector. However, the unevenness of the process is missed out in the explanation based on caste as social capital. All routes of entry are not however available to all Gounders. While access to land and certain kinship networks constitute the axes of such intra-caste variations, need for additional attributes to transact with global buyers further excludes sections of Gounder entrepreneurs. Entering into direct exports requires an ability to interact and negotiate with global buyers, an attribute that is unevenly distributed among the entrepreneurs. Lack of formal education among workers and small peasant-turned entrepreneurs is a key factor confining most of them to the position of job workers and subcontractors undertaking work outsourced by the direct exporters. Importantly, as we show next the idea of horizontal intra-caste solidarity mooted by the “caste as social capital” argument collapses in the way caste is deployed by the Gounder exporter-entrepreneurs to negotiate market uncertainties.

Power in Intra-Caste Networks

Kinship-based networks do not preclude unequal exercise of power between different actors. Direct exporters enjoy a high degree of manoeuvrability vis-à-vis the subcontractors. Payment delays, reduction in payment due to minor faults are all frequent complaints of the subcontractors and job workers against the direct exporters. Subcontracting of production helps the bigger firms to pass on the shocks to smaller firms at the lower end of the hierarchy. The impact of price-cutting is felt more by subcontractors and job workers.

A telling example is how “debiting” has been used by direct contractors to exploit their own kinsmen who are subcontractors. A single order obtained by the direct exporter is split into smaller orders and contracted out to different subcontractors. Let us assume that one lot of the entire order has not met the quality requirements of the importer and the corresponding amount is deducted from the amount due to the direct exporter. Subcontractors felt that instead of passing on the loss to the specific subcontractor, the direct exporter would deduct from payments due to all of them. In the absence of any direct contact with the importers, the subcontractors have no avenue to know the extent and nature of rejection. Power and information asymmetry due to intra-caste differences in endowments between the Gounder exporters and Gounder subcontractors enables the exporters to mobilise caste to accumulate at the latter’s expense.

In fact, as a response to such exploitation of the subcontractors, an association of subcontractor manufacturers called the Tiruppur Export Knitwear Manufacturers Association (TEKMA) was formed in the late 1990s to collectively negotiate with direct exporters on these issues and to curtail unhealthy competition among subcontractors that had led to intense price wars. However, this association was not quite effective as subcontractors were worried about loss of orders from the parent firms. To an individual firm, establishment of a stable patron-client relationship with a direct exporter is strategically more advantageous than collaborating with fellow subcontractors to bargain with the direct exporters. The nature of intra-caste relations that we have mapped here is clearly different from the one based on horizontal solidarity and cooperation within caste. Big Gounder capital draws upon internal caste differentiation to accumulate under uncertain conditions of global production. Importantly, kinship networks also exclude segments of capital that fall outside these networks.

Failed Dalit Entrepreneurship

The exclusivity of such social networks is best exemplified by the experience of the state government initiated Tamil Nadu Adi Dravidar Housing and Development Corporation (TAHDCO) knitwear industrial estate at Mudalipalayam on the outskirts of Tiruppur. Meant to improve the socio-economic status of dalits in the state, the TAHDCO promoted, for the first time in the country, an industrial estate exclusively for dalit entrepreneurs on 100 acres along with the Tamil Nadu Industrial Investment Corporation (TIIC), with the state government providing a 15% capital investment subsidy and a 5% share in capital contribution. Given the lower technological and capital requirements of the garment sector and the substantial growth in demand for knitted clothing from the Tiruppur region in the global market, it was anticipated that the first generation dalit entrepreneurs would be able to plug themselves into circuits of global production once the initial start-up costs are subsidised.

However, even in the initial phase, there were no takers for close to 50% of the 100 sheds. Among the remaining 50-odd firms that were started all firms except five or six suffered losses and soon stopped functioning. Apart from some changes in government policy that disadvantaged them,⁹ a major issue reported by the entrepreneurs was lack of access to markets despite having access to high quality imported machinery for knitting and embroidery. Orders have to be invariably sourced through social networks, which are mostly controlled by the Gounders. Despite the fact that many of them had tertiary education and were ex-employees of the public sector, they could not enter these networks. Entrepreneurs are able to enter into such networks either through kinship ties or through having worked with other entrepreneurs over a period. In the absence of either kinship or other social ties, dalit entrepreneurs found it extremely difficult to run the machines at optimal capacity. Caste-based networks thus once again enable some sections to gain even as they exclude by generating strong entry barriers. In other words, while the social capital argument looks at caste in discrete terms, we have pointed out that caste indeed is relational – one caste creating entry barriers to other castes.¹⁰

Following this failure, in 2007, the government helped the sick enterprises to come together to float a new company, the Tiruppur Apparel Park India, that would take care of marketing issues. While there was a revival in the fortunes of some of the units through this effort,¹¹ marketing efforts could not be sustained. Outside the TAHDCO estate, a few dalit workers have tried to become entrepreneurs by taking up job work for exporters and tier-one contractors. They purchased second-hand stitching machines by pooling in some money and undertook only stitching operations for a few firms during peak season. Being a labour intensive operation, they started on the presumption that their capital requirements would be minimal. However, what they had not bargained for was the need for working capital to meet the weekly wage bill of the workers and the possibility of delayed payments by the outsourcing firms. Their ability to rely on credit was severely undermined by their lack of collateral. Gounder entrepreneurs by virtue of their access to land could address this demand much more easily than the dalits. While some of the dalit entrepreneurs have gone back to work as tailors in the export factories, a few of them continue to survive as labour contractors, bringing in teams of workers to different factories as and when demand arises. Caste, by setting the initial conditions of distribution of endowments like land and education, reinforces and enhances hierarchies within a purportedly democratic socio-industrial formation.¹²

Exclusive and Differentiated Social Capital

Though identities based on caste, ethnicity or religion do contribute to reduction in transaction costs, such identity-based networks also exclude those who do not have initial resources or belong to these networks. Such identities may ensure efficiency in the market, but an industrialisation process that reinforces such social divisions may only exaggerate existing inequalities. When an industrial agglomeration like Tiruppur bases its competitiveness on such networks, it reinforces other identity-based inequalities. Developmental strategies based on use of existing caste relations as social capital clearly reinforce multiple inequalities.

Application of social capital analysis to caste has, in general, taken two forms. One assumes caste itself as social capital; and others claim how different caste groups achieve by means of certain social networks and voluntary clubs. Neither recognises the fact that caste is a hierarchical system, but assumes castes to be discrete and horizontal. If castes are seen as relational to each other, then inclusion of some groups would mean the exclusion of others. The process of either inclusion or exclusion thus becomes systemic and structural. Even within the social capital framework, caste clearly lacks both linking and bridging capital. Second, across different castes, one needs to ask how much of social capital is pre-given and how much is accumulated over time. This is important since the initial endowment of social capital might decide future accumulation of the same. Further, accumulated social networks of all caste groups need not deliver equal or similar outcomes.