Dalit Capital

State, Markets and Civil Society in Urban India

Aseem Prakash

• Publisher: Routledge India
• Year: 2020
• ISBN:
  9781000084245
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Dalit Capital explores the relation between caste and Indian capitalism. It explores the ways in which caste and social discrimination reinvent themselves under the guise of modern capitalism. It demonstrates how 'inclusion' holds Dalits at a disadvantage, perpetrated by the state, markets and the civil society.

ONE Introduction

The Context

It has been long argued that any socio-economic relationship configured under the organised political power of the upper castes reinforces the ‘traditional marginality’ of the Dalits. For instance, in the late 19th century, Jotirao Phule, argued that the predominant control of the day-to-day running of all types of government institutions by Bhat-brahmins (due to the unwillingness of top ‘white government bureaucrats’ to learn the true conditions of the people) resulted in the pauperisation of peasants and farmers. The Bhat-brahmins deceived the ignorant farmers drawing support and legitimacy from the principles of Hinduism which mandated the lower castes to serve the labour interests of the upper castes. This hierarchical relationship between castes legitimised by religious doctrines led the shudras and ati-shudras to deeply internalise the belief that they are meant to serve the economic interests of the upper castes. This in turn resulted in rampant social discrimination, economic exclusion or exploitative inclusion in the non-farm economy.¹ Further, reacting to the Swadeshi movement, Phule noted that economic nationalism had become a smoke screen to conceal and preserve the socio-economic and religious superiority of the upper castes.² Likewise, Namasudras in West Bengal refused to align with the dominant economic nationalism of the early 20th century. Bandyopadhyay points out that the Namasudras perceived the colonial state to be the upholder of ‘social equality’. They felt that supporting the Swadeshi movement would weaken the power of the state and reinforce the clout of caste Hindus, resulting in further degradation of the social position of the Namasudras.³ Similarly, Iyothee Thass in Tamil Nadu argued that economic nationalism during the colonial rule was a strategy of the upper caste elites to maintain social and religious superiority over lower castes.⁴

Therefore, the Dalit discourse of the late 19th and early 20th centuries did not abide by either of the two competing nationalist strategies negotiating with the question of caste. Partha Chatterjee points out that the first nationalist strategy was favoured by the nationalist left and the Marxists, who considered caste a feature of the superstructure of the Indian society.⁵ For them, the existence and efficacy of caste was the ideological product of specific pre-capitalist formations, bound to disappear under the impact of modernity. The second strategy, according to Chatterjee, is reflected in the thoughts of Gandhi and Radhakrishnan. Gandhi saw the varna scheme as a non-competitive functional division of labour that did not imply a hierarchy of privileges; Radhakrishnan described the varna scheme as a ‘universal form of organic solidarity of the individual and the social order’. Chatterjee further argues that both the Marxist (Left) and nationalist (Gandhi–Radhakrishnan) discourses accepted the premise of modernity. The former argued that caste is inconsistent with modern society while the latter explained that caste in its ideal form is not oppressive and merely serves the purpose of the division of labour in the modern economy. The discourse of Dalits, while contesting these Marxist and nationalist discourses, draws our attention to two kinds of colonialism: Gavaskar explains that the Dalit discourse makes a distinction between British colonialism and ‘Brahminical colonialism’, the latter preceding the former. The latter has its roots in Hindu scriptures which provide divine justification to caste-based discrimination and domination. Economic exploitation based on extra-economic grounds was part and parcel of the caste-based society. British colonialism, in spite of its negative features, inadvertently, made available certain normative and cognitive tools to fight Brahminical colonialism.⁶ The ideas and views flowing from the enlightenment provided a reason to believe that inter- and intra-social group relationships could be configured on a more egalitarian basis.⁷ These very ideas also led to the demise of the colonial empire in India, ushering in a constitutional regime supporting political democracy. Political democracy, henceforth, became the basis of political equality through a constitutional guarantee of the bourgeoisie liberal principle of citizenship (one person one vote irrespective of social location) and also galvanised hopes for economic prosperity. However, it is increasingly perceived that Indian democracy has provided political empowerment to Dalits but has failed to empower them economically. Gail Omvedt opines that the Nehruvian model and state protectionism retained the caste base of society and restricted social mobility and labour-saving innovations which could have reduced demand for drudgerous manual Dalit labour.⁸ Panini also argues that even private ancillary industries and accompanying economic opportunities which came up under state protectionism were cornered by the upper castes.⁹ In the present context, Omvedt argues that ongoing globalisation has the potential to open a sea of opportunities for the weaker sections, and hence advocates free markets.¹⁰ Similarly, Prasad argues that the principle of the caste system — blood and occupational purity — is dissolving under the impact of the wealth creation endeavours of markets.¹¹ Ramaiah also opines that the state-led developmental regime has excluded the Dalits. Dalits have nothing to lose in welcoming globalisation since it holds the promise of freeing of upper caste-inspired and controlled socio-economic relationships.¹²

Thus, scholars and activists supporting free markets as a means of eliminating discrimination basically argue that the disjunction between political equality and the vast economic inequality between different upper and lower castes can potentially be bridged by free market policies spearheaded by economic liberalisation; the logic being that the market has the potential to eliminate discrimination and bias, because it represents the interaction of free individuals maximising their gains/utilities.

Nonetheless, the support for free market policies is also accompanied by a call for state action to help Dalits to enter the markets. For instance, it has also been aggressively argued that the present narrow definition of affirmative action — translating into ensuring jobs in the public sector — should be expanded to include reservations in the private sector. This is accompanied by strident calls by Dalit intellectuals and activists for the creation of a Dalit bourgeoisie (please also refer to the discussion on the Bhopal Declaration in Chapter Four). Thus the demand for state action to back-up policies in support of the free-market creates a complex relationship of Dalits with the state. In other words, Dalit scholars and activists who support free markets also simultaneously demand an enabling role of the state to ensure that the Dalits are sufficiently equipped and empowered to enter the markets on an equal footing with the upper castes.

It is against this backdrop, that we attempt to analyse the outcome of the political and economic desire of Dalits to enter the market as owners of capital and trade in various goods and services. This is done on the basis of 90 detailed interviews of Dalit entrepreneurs conducted in 13 districts located in six states of India. Dalits choose to enter the market as owners of capital in anticipation of earning their livelihood without compromising their हजूज़ता¹³ [dignity/honour], अपनी औकात पै¹⁴ [by the dint of their own capabilities], and विना किसी के एहसान से¹⁵ [without being patronised or obligated]. Markets are expected to provide them social dignity and end the hitherto oppressive socio-economic relationship often variously described as जजमान-सेवक/हास, मरिक-नौकर, हृकिम-नौकर आदि [master–servant relation ship].¹⁶ Thus, our interviewees anticipated that a livelihood earned in the market would allow them to overcome their traditional socioeconomic marginality. In other words, it is expected that:

• Outcomes in the market are not contingent on caste location but on efficiency and quality.
• Operating as owners of capital brings in material prosperity and social prestige.
• Adverse outcomes experienced in the labour market in the form of low wages, extra-economic compulsions, physical violence, or threat of violence can be mitigated by this route.

The Objective

The objective of this book is to understand the relationship between social identity and outcomes in the markets with the help of business histories of Dalit entrepreneurs. Therefore our concern is not to look at labour market outcomes in terms of wages, or positions held by various individuals belonging to different ethnic/religious/ caste groups in the economic processes (for instance, labour, manager, supervisor, etc.) but to understand and analyse outcomes in the markets when individuals hitherto branded as ‘untouchables’ in the traditional Hindu social order enter the markets as owners of capital and trade in various goods and services. While doing so, the effort is to understand whether the social identity of the economic agent mediates and influences transactions in the markets, and if it does influence them, what is the nature of the outcomes. We try to explore whether the interaction of economic agents in the market is governed by the secular principles of the markets or is mediated and influenced by the social structure and the social contexts inhabited by the economic agents. In this endeavour, the documentation of business histories explores a few crucial interrelated questions:

• What are the institutional factors which facilitate/constraint a Dalit from entering the markets as an owner of capital (entrepreneurs) and undertaking trade in goods and services?
• What are the institutional factors which (dis)allow Dalits as owners of capital to sustain their economic activities in the market?
• What is the role of institutions, both formal (for instance the state and its various institutions) and informal (institutions in the realm of civil society like social identity of caste, social networks, etc.) in influencing outcomes in the markets?
• What is the nature of the inclusion/participation of Dalit owners of capital in the markets?

Defining Markets and Social Identity

Before elaborating on the research methodology, it would be essential to explain how two important concepts — markets and social identity — are explored.

Markets

We will explain the concept of markets through three interrelated characteristics, that is, the constitutive element, the relational feature and aspects determining market outcomes.

Markets are constituted through sustained human interaction where two or more parties engage in exchange of goods and services of various kinds. The exchange is mostly through money and is embedded in a variety of institutions (formal and informal credit, supply and production chain, etc.), norms (informal codes of conduct), formal rules (rules about taxation, goods and services which can be offered and sold), social relations (social networks, capital–labour relationship, etc.) and infrastructure (roads, electricity, physical spaces, etc.). The state often creates and necessarily regulates all types of markets and provides legitimacy to them.

Two or more parties enter into an exchange relationship mostly to earn profit. Profit is the hallmark of any transaction(s) and is one the chief reasons for the markets to exist. The exchange relationships are termed as transactions. Therefore, market interaction is a relationship between buyers and sellers. The relationship is born out of the demand (read want) of the buyer (defined as consumer) who enters into a transaction at certain terms and conditions with the seller (supplier of the good or service). The critical point is to understand how the price of goods to be sold or the services to be offered is determined. This brings us to our third important feature of the markets.

As we know, participants in the market consist of all buyers and sellers of goods and services who influence demand, supply, prices, and profit and in turn determine outcomes in the markets. The prices in the markets are expected to be determined at the intersection of availability of goods/services and the demand for the same. From the standpoint of the seller, the profit is determined by what s/he is able to save over and above the cost price and after meeting all types of transaction costs. Generally, it is understood that price and consequent profits are influenced by economic factors like availability of goods, credit, physical infrastructure, rules of taxation, etc. However, this book contends that it is possible for economic transactions and market outcomes to be determined by non-economic factors along with the economic ones. After all, the individuals entering into market transaction are embedded in their social location (caste, gender, ethnicity, religion, etc.) which in turn can influence their worldview and hence their relationships in the markets. In such a context, there is a possibility that that the relationship between the buyer and seller is not solely carved out of the intersection of quantum of demand and supply. Instead, the social identity of the person can mediate and influence economic transactions and thereby have a bearing on demand, supply as well as profit.

Social Identity

How do we understand social identity in our present context of examining its role in influencing market outcomes?

Generally speaking social identity is an individual’s identification with other members of the society. Among other factors, belongingness to a social group is one of the most important attributes that constitutes the social identity of any individual. In this sense, the individual gets connected to the wider world though his/her location in a particular social group. The social group could be professional (IT workers, bank employees, etc.), social (trekking club, cycling clubs, football clubs) and ascriptive (hereditary in nature such as caste, race, etc.). In this book, we focus on the social identity of individuals emerging from their ascriptive status, that is, caste location. We are taking the specific case of Dalits and exploring the outcomes of their endeavours when they trade in goods and services in ‘open’ markets.¹⁷ Therefore, this book deals specifically with individuals with ‘subordinate’ social identities who have decided to go from being providers of labour to becoming owners of capital (entrepreneurs).

In the course of the investigation, we have tried to re-construct their business histories and engage with their outcomes in the market which are affected and influenced by their ascriptive group identity. The focus on social identity in economic transactions takes our work away from the traditional domain of sociology and should situate it in one of the fast growing disciplines in India, that is, economic sociology. However, this is merely one indication of the expanse of this book.

As already pointed out, modern markets are often created by the state and invariably regulated by it. Therefore outcomes in the markets are also shaped by the nature of state intervention. If social identity can (as it does) influence market outcomes, it can necessarily also influence the state and its actions towards influencing market based transactions. If such is the case, the boundaries of this work further expand to situate it in the discipline of political sociology. Accordingly, this research is sit...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Tables and Figures
• Foreword
• Acknowledgements
• 1. Introduction
• 2. Dalits, Theories of Caste and Transformative Recognition and Redistribution
• 3. Dalit Entrepreneurs in Urban Markets of Middle India
• 4. Dalit Entrepreneurs and the Role of the State in the Markets
• 5. Market-based Profit Accumulation and Civil Society
• 6. Intersectionality, Discrimination and Unfavourable Inclusion
• 7. Conclusion: Caste and Markets
• Bibliography
• About the Author
• Index