Release of Book ‘Caste as a Social Capital’ by Prof. R Vaidyanathan

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A seminal book, namely, ‘Caste as a Social Capital’, revisiting Caste as playing an important role in promoting economic growth, written by Professor R Vaidyanathan was released on 9th April 2019 at the Vivekananda International Foundation (VIF), New Delhi. The author is a distinguished economic thinker who retired as professor of Finance at the IIM Bangalore. He was also the former member of the National Security Advisory Board.

The book was released by Shri S Gurumurthy, Chairman, VIF, and a well-known economic and political analyst amidst presence of a prominent panel including Dr. Bibek Debroy, former Chairman of the Economic Advisory Council to the Prime Minister, Dr. Surya Prakash, Chairman of the Prasar Bharati and Dr. Arvind Gupta, Director of the VIF.

Dr. Gupta, in his opening remarks lauded Prof. Vaidyanathan saying that he was an original thinker and his analysis was based on facts and data. Commenting on the book, Dr. Gupta said that while caste is commonly identified with oppression and discrimination, there are also positive aspects which are not adequately researched. Caste can also serve as creator and promotor of social capital in the society. It is this important aspects that is emphasized in the book. The book looks at role of caste in promoting education, entrepreneurship and networking among individuals. It gives several examples and various case studies on how caste promotes different entrepreneurship in areas such as construction, trade, real estate, transportation, tourism to name a few among others. Prof. Vaidyanathan’s plea at the end of the book is that the important role played by caste in building social capital should be recognized and not overlooked.

Following up, Shri S Gurumurthy came forward to deliver the key note address. He began by emphasizing that India has traditionally been an economy based on a communitarian production system. This book presents a study with a new lens to view caste as champion of economic prosperity by giving examples of caste led economic development from different parts of India. He said that he finds a complete alignment between caste and entrepreneurship in the country. Within a caste, if somebody becomes an entrepreneur, it triggers a competitive spirit among the entire caste which no university or engineering college is able to generate such motivation. One finds that both competition and collaboration moves simultaneously in a community. He said that when caste is looked at with a political lens, it is considered to be backward and discriminatory but it works well with economics. He said, “Caste and politics is a bad companion but caste and economics produces prosperity.” He quoted data from the book, that in 1998, the Scheduled Castes (SCs) owned about 7.7 per cent of the total micro, small and medium enterprises, which rose to 11.4 per cent in 2013. The Scheduled Tribes (STs) owned about four per cent in 1998 increased to 5.2 per cent in 2013. The Other Backward Classes (OBCs) owned a total of 34 per cent in 1998 and grew to 40.8 per cent in 2013.

Shri Gurumurthy underlined that dominant entrepreneurship has come from those designated as backward classes. He stressed that business was not discriminatory. The caste community is able to work together by facilitating mutual trust and building relationships. Caste produces entrepreneurship and circulates by mutual trust the savings of people so that the disadvantaged section of society rise up through the very relationships which are said to be discriminatory and problematic. Hence, Prof. Vaidyanathan has tried to inverse the present paradigm on caste and highlighted on what the caste can deliver.

The author, Prof. Vaidhyanathan talking about his book, started by saying that the word, ‘caste’ has sadly assumed a problematic connotation in India, similar to the word ‘holocaust’ in Germany. He said that Caste was not an idea. Each caste is a ‘sampradaya’, which roughly translates to a tradition or a school of thought. Hence, discussions about abolishing caste seems to create confusions because it directly refers to abolishing a tradition. Further, one would not want to destroy elements that contribute immensely to the country’s economy.

According to the economic census of 1998, 2005 and 2013 conducted by the Central Statistical Organization (CSO) that studies all kinds of economic establishments, stated that in 1998, 45 per cent of all establishments were owned by the SCs, STs and OBCs. This increased to 51 per cent in 2005 and significantly increased to 60 per cent in 2013. Professor concluded that the reports suggested that ‘Vaishyavaisation’ of India was taking place. Everybody is becoming a Vaishya, even Brahmanas and Kshtriyas are becoming business oriented communities. He disagreed with Nehruvian model which states that the government that should do all business activities and recommends that it must be the society that carries out business activities. He suggests that the government should do only the Kshatriya job.

Professor further mentioned that reservation had only aided one particular person has but entrepreneurship had economically boosted the entire caste community. Caste that focused on electoral politics has not succeeded as much as caste that ventured into business, entrepreneurship and commerce. Castes who got into business saw that their entire caste did well both socially and economically.

Dr. Bibek Debroy appreciated the book saying, “It is a wonderful book with a wonderful idea.” It presents a very strong and powerful hypothesis of seeing caste from the vantage point of economics. However, he disagrees with the nomenclature, that is, with the usage of the word ‘caste’. He said that what is intended while using the word ‘caste’ can mean differently for different people. However, he emphasizes that the argument in the book is much beyond just caste. It is much more about community, jati and family. He also stated that the ‘Vaishyavaisation’ that the author is talking about is not a new phenomenon but was always present. This is so, because the scope of doing the activities ascribed to Brahmanas and Kshtriyas were always limited and hence the larger sections of the population were involved in the activities of the Vaishyas.

Finally, Dr. Surya Prakash praised the book stating that book makes very significant observation on clusters which are usually looked at superficially. He said that the book sheds light on role of caste in promoting economic growth through business, entrepreneurship and commerce. The book highlights a very important relationship and fine balance between competition and cooperation. There is fierce competition within a cluster and cooperation when faced with external challenges, which is missing in western economic models.