IT was my first day in London, my first visit to the 'developed' world. I had been invited to a pub in Leicester Square by a former girlfriend who wanted to show off her brand new husband.
So there I was, spending the evening with a completely estranged woman and a complete stranger.
The pub was quite full, but I managed a bar-stool, when suddenly there entered a handsome young man in a black suit accompanied by three extremely attractive young women.
They ordered drinks and, as luck would have it, I had to pass their glasses on to them, being closest to the bar.
I noticed that the pale yellow drink had a familiar aroma and inquired of the man as to what he was drinking. He said, "Pernod" and added that it was a French drink flavoured with anise (saunf).
This got us talking and the group and I exchanged pleasantries for a while. The conversation then turned to occupation. I said I was there as a student at the LSE.
The man said he was a 'sanitary worker'. I couldn't get what that meant and he explained: Every morning, he puts on his overalls, boots and gloves, gets into a truck, and goes about collecting garbage.
I understood immediately that the market could do more to correct casteism than any amount of state action. In my country this handsome young man would suffer caste discrimination.
In Margaret Thatcher's England he was entertaining not one, not two, but three lovely women in a pub in Leicester Square. An he was not drinking 'country liquor'; he was imbibing Pernod.
I must say that I learned more Economics living in London and observing life than I did in the classrooms of the LSE. When I lived in Hammersmith, I used to pass an undertaker's shop every day on my way to the tube station.
I used to think: In my country, this man would be a dom - the lowest of the low. I moved to West Hamstead and took up a room in a house run by an Indian landlady where many students stayed. Once a week, an English maid would come and vacuum the entire house and clean the loos. She came in her own car!
In New Delhi, anyone in such an occupational class lives in a jhuggi and does not even dare to dream of car ownership.
A recent television debate on caste featured a Dalit leader who kept talking about carriers of night-soil. Obviously, this is an urban phenomenon.
There cannot be such a caste in underpopulated villages. With open markets and urbanisation, this caste would prosper and get absorbed in the larger, more prosperous, and more cosmopolitan society. Very few people had flush toilets in the USA in 1900.
One good thing: the Dalit leader was making noises in favour of globalisation.
I suggest Dalit leaders get interested in the Economics of prosperity. We urban liberals dream not just of making India prosperous; we dream of making India obscenely rich.
The Dalits will gain enormously from open markets, economic freedom and urbanisation. As they claim, in their respective economic niches, a greater share of a rapidly growing pie, and as they mingle with caste anonymity in bustling metropolises, they will find the old caste equations disappearing.
This is already happening: at the TV debate, when the issue was opened up to the audience, many urbanites responded saying that caste was a factor that never entered their lives.
The socialist state's response to the caste question has been insincere.
Politicians have used the state's powers of patronage to promote clientelism.
By refusing to urbanise, and by throttling urbanisation, they have reinforced and perpetuated the 'rural-urban divide'.
There is thus an India where caste does not matter; and there is a Bharat where caste is the sole basis of identity. With free markets and urbanisation, India will take the lead.
Dalit leaders should also read Thomas Sowell's slim book: Preferential Policies: An International Perspective. It shows how reservations have destroyed societies.
And this, from an African-American scholar! In free market India, the state will be so small that reservations will be unnecessary.
Instead of the clientelism and tokenism that reservations represent, Dalits should opt for the prosperity that economic freedom will bequeath to them and the caste anonymity that will certainly follow urbanisation.