How Free Markets Have Improved Life for India’s Dalits
Since independence in 1947, the Indian subcontinent has remained bound to its ancient caste system, which can generally be understood in this descending order, albeit with significant variations and subcastes depending on region:
- Brahmans (priests)
- Kshatriya (warriors)
- Vaishya (merchants and traders)
- Sudra (artisans and laborers)
A fifth caste, the Dalits, are treated as the lowest of the low; they are characterized as untouchables and historically have been subjected to violence. The Dalits have very little socioeconomic mobility, only being granted jobs which entail cleaning sewers and disposing of dead animals. Untouchability has also manifested in members of higher castes refusing to drink the same water as Dalits or eat food that they have consumed. There are even instances of Hindu vigilante groups and police officers colluding to murder Dalits who attempt to marry outside of their caste.
While belonging to a higher caste has mostly become a source of unearned prestige in modern Indian society—as opposed to denoting actual religious or communal duties—discrimination toward Dalits has persisted, also despite the use of quotas for the representation of Dalits in education and government. Dalits and other Hindus have often been encouraged to convert to other religions to escape discrimination. The great reformer Dr. Bhimrao Ramji Ambedkar set an example for this when he began the Dalit Buddhist movement. However, the bigotry toward Dalits has often transcended Hinduism and followed the converts into Islam and Christianity, as evidenced by the use of specific labels to identify them, such as “Dalit Christian.”
Cushioned Capitalism
A turning point in the social condition of the Dalits came in 1991; the beginning of the free market in India came when the government repealed many of its antimonopoly laws, including the 1969 Monopolies and Restrictive Trade Practices Act. These laws had been introduced to keep big business in check and reflected the admiration that India’s first prime minister, Jawaharlal Nehru, held for Stalin’s central economic planning, as Deepak Lal explained in Reviving the Invisible Hand.
Thomas Sowell in Basic Economics terms this collusion of capital and government a “cushioned capitalism” that only benefitted leading industrialists of that time, who held an interest in maintaining state supervision over the flow of capital and the labor market. The formation of the Bombay Club in the 1990s is an example, consisting of leading Indian industrialists who were opposed to rapid economic liberalizatio
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