Monday, October 11, 2010

Caste and the Market Economy

Caste and the Market Economy by Sauvik Chakraverti


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.

Auction Ayodhya: We'll Have Both Freedom and Justice

Auction Ayodhya: We'll Have Both Freedom and Justice by
Sauvik Chakraverti

Nov 19, 2003, 12.01am IST Times of India

The judiciary is blocking India's liberals. The Bombay high court has been sitting on a public interest litigation filed by the Indian Liberal Group for over five years.

ILG is appealing against the section in the Representation of THE People Act restricting electoral competition to socialist parties. So let us attack socialist jurisprudence, for we have the longest constitution in the world but little justice.

Obviously, there is something wrong with socialist law. An economist commenting on law what cheek, the legal community will cry. I must inform them that great economists have all written on law. Adam Smith's Lectures on Jurisprudence are a classic. Frederic Bastiat's slim volume The Law has been published in India. I guarantee that anyone who reads the book will be convinced that the Constitution of India is not quite all right. Friedrich Hayek wrote The Constitution of Liberty, a book Margaret Thatcher swore by; and there is Murray Rothbard's The Ethics of Liberty.

Let us begin by understanding the origin and purpose of law. It is because of property that law was necessary. That is, it is not because of law that property exists; it is because of property that there is law. The common law evolved to sort out disputes related to the natural right to property. Liberal judges take this as their guiding principle so let us apply it to important issues before our socialist judiciary and see what results we get.

Take, for instance, what a liberal judiciary would do if Parliament passed a law banning cow slaughter: It would simply tear up the law on the grounds that cows are private property. Each man must be free to do what he wants with his own cow and the state cannot interfere. Did any legal luminary speak this language? Now, apparently our rulers want to de-politicise Ayodhya and the issue is before the courts. What did the courts do? They asked the Archaeological Survey of India to dig up the disputed site and discover what lay underneath. Is this the application of our principle? If a temple is discovered under my house, can anyone lay claim to my property? Certainly not.

If liberal jurisprudence is applied to Ayodhya, the solution is clear and simple: There is no clear title to the site; there are various claimants, each possessed of little legitimacy; therefore, the site must be auctioned. Socialist jurisprudence is not justice. Socialists reject the natural law of property and believe that the purpose of the law (and the state) is to redistribute property. Theirs is a Robin Hood ideology but it is time we stopped looking at their legal plunder (what they call redistributive justice) as romantic.

Rent control, for example, is the only cause of slums. They have destroyed the market for cheap rentals. They do not like landlords so they created slumlords. And they did not settle disputes, the first purpose of law. Rather, they prolonged disputes. My uncle spent 20 years of his youth battling a rent control case. A long-term solution is to promote the teaching of law and economics. We have few economists in law schools all over the country. This must be tackled. As far as the short-term is concerned, there is no solution. We in India must face up squarely to the fact that the socialist state which we placed on the commanding heights is reporting symptoms of multi- organ failure. This is entirely because socia-lists apply completely wrong principles to government. Behind this multi-organ failure lies a far deeper knowledge failure. I can personally testify to the poor quality of teaching at the IAS Academy in Mussoorie. I went through my son's ICSE economics textbook and advised him to drop out of school.

I find it amazing that Amartya Sen is recommending mid-day meals in state schools: It is a prescription to assuage physical hunger while ignoring the mind. If, in the short-term, we wake up to the fact that we are faced with a powerful, centralised, nuclearised state that is reporting multi-organ failure, then the medium-term solution would be to challenge what is being taught in economics, political science (or civics), public administration and law. Let us include liberal jurisprudence in law schools. Let us have the political value of freedom included in civics textbooks. Let us teach students of economics how wealth is created, so they value freedom and understand markets. Let us make a bonfire out of Indian economics textbooks, a bonfire of the socialist central planners' vanities. The liberal only appeals to reason, and it is to reason that we must appeal, even if denied entry into the electoral fray.

In this way, liberalism will gain ground and someday soon we will have the critical mass necessary to re-invent every aspect of our government, including the law and the judiciary. A note of hope: We go through life, getting all our needs from the market, usually without recourse to either civil or criminal law. So we don't need courts that badly. Second, we have a proud history of private courts in the cities run by the East India Company. Sir Elijah Impey was a great EIC judge. With sound jurisprudence, simple law, and a short constitution, we can have freedom as well as justice.

DEVIL'S ADVOCATE: Gandhian Violence

DEVIL'S ADVOCATE: Gandhian Violence by Sauvik Chakraverti

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Whereas Gandhi advocated non-violence, his followers have always utilised violence in order to promote their leader's ideas of a good society.

For example, in Gujarat, where Gandhi came from, violence is still used by the police to enforce the prohibition of alcohol.

Gandhi's hatred for alcohol has meant that, all over India, the excise officialdom has obtained political sanction to entangle the retail trade in alcoholic beverages in a labyrinth of red tape, all of which is enforced with violence.

Then there are the ideas of khadi and swadeshi. Gandhi's preference for homespun cloth meant that the government used violence and force in order to promote one kind of cloth at the expense of another.

India's blooming textile industry was made into a bonsai using state violence. As far as swadeshi is concerned, the customs department enforces this idea of autarky.

If any citizen returns from abroad with goodies and gadgets, these armed personnel of the Gandhian government use force and violence in order to deprive the citizen of his rightfully acquired properties, or to charge him a hefty fine if he wants to take them home.

An enormous amount of violence continues to be perpetrated in order to promote Gandhian ideals. This very Gandhian violence is best exemplified by the currency note, which has Gandhi's photo on it.

Even up to fairly recent times, eminent businessmen became victims of violence on the part of an enforcement directorate empowered to ensure that these notes of the Gandhian government could not be privately converted. Gandhian violence is a very real phenomenon.

It exists because Gandhians have never understood the purpose for which a government is constituted. To Gandhians, and this includes all Congressmen, government exists to do 'good things'.

This fatal flaw in their thinking occurs because their master didn't realise that any government is but a monopolist in the use of legitimate force, and that the crucial question political science must answer is to what ends this legitimate violence must be used if it is to remain legitimate.

Since Gandhi and the Gandhians never considered this question, they continue to use violence towards illegitimate ends. Gandhianism lies at the root of bad government.