Caste, socialism and social capital

Some new research by Dan Ariely (of Predictably Irrational fame) and co shows some interesting correlation between a socialist/communist upbringing and attitude towards lying (The Economist reports this research under the headline “Lying Commies“). While I’m not particularly convinced about the research methodology (sample of 250 respondents under a simulated environment – but then most behavioural research suffers from this problem) I find this research interesting since it supports another hypothesis that my wife and I came up with a few days ago – that India’s low social capital is a consequence of the caste system.

I’ve long maintained that the Indian caste system is perhaps the earliest example of a socialist economy. Assuming that reproductive rates across different castes were similar (there is no reason to believe otherwise) what the caste system ensured was that the relative supply of labour across different occupations remained constant even in small geographical areas, and consequently the relative prices of goods remained broadly constant. We can thus think of the caste system as an instance of a socialist model where each one’s profession is determined at birth, and relative prices are fixed. I will go as far to say that there is no better example of a planned economy than the ancient Indian caste system.

One of the inherent problems of Indian society is the lack of social capital. To use my co-INI blogger Nitin Pai’s framework, Indians value Swaartha (self-interest) over Paraartha (interest of others) to an extent that is far beyond the optimal level. The hypothesis goes that there is an optimal mix of Swaartha and Paraartha that should enter one’s objective function while making decisions in everyday life. For example, do you allow the other car to pass before you so that you avoid the traffic jam or do you rush ahead just because there is space in front of your car? Do you over-graze the commons just because it is there or do you consume it in moderation so that others have something to consume, too? A society with a high degree of social capital gives a higher weight to Paraartha in these objective functions, and people in such societies cooperate more and collectively take decisions that make more sense at the societal level.

Now, societies where life is tough (due to geographical or environmental factors) generally face a higher degree of social capital than those where life is easier. One way to experience this would be to drive from Punjab to Himachal Pradesh. On the wide roads of the Punjab plains, it is dog-eats-dog on the road – people overspeed, overtake like crazy and don’t give too much consideration to others on the road. Once you enter the hills of Himachal Pradesh, though, the whole equation changes. Here, a confrontational paradigm doesn’t get you too far – the narrow roads and winding curves mean that drivers need to cooperate more in order to get their way. Social capital in such societies is naturally higher.

Social capital is sticky in one way – if a particular generation in a particular location has high social capital, it is extremely likely that the preceding generation also had high social capital. The reverse, however, is not necessarily true – social capital can sometimes be destroyed in double quick time (think, for example, of the Lebanese Civil War between 1975 and 1990). Thus, the fact that social capital in India today is low could either be because it was always low, or because there was a particular event that destroyed social capital. Since it is unlikely that there was one event which destroyed social capital in the entire country, it seems more likely that social capital in India has always been low.

Social capital is important in a society where there are no rules – if you have a traffic signal at an intersection, for example, the lights will ensure that there is no jam. However, in the absence of rules (or lights) high degree of cooperation is necessary between drivers in order to lead to higher throughput from the signal. One way of combating a society with low social capital is to have lots of rules – these rules rather than social conventions can then drive the society. The converse is also true – in a highly rule based society there is no real need for social capital, and thus social capital can wear off down the generations.

As explained earlier, the caste system meant that the ancient and medieval Indian society was highly planned and rule based. Complex caste rules ensured that there was a rule for any possible social occurrence which might otherwise require cooperation. A brahmin’s cart and a shudra’s cart on the same one-lane path? There was a rule regarding right of way. Two people reaching the river at the same time to bathe? A rule governed who might swim upstream. And so forth.

My hypothesis is that the rule-based society ancient India had due to the caste system meant that there wasn’t much need for social capital. And thus India has never been a high social capital country (except of course for tracts such as Himachal Pradesh where life has been difficult). To put it another way, we see that a socialist economy from the past ages has led to consistently low social capital.

Which is not that far off from what Ariely et al say in their paper.

4 thoughts on “Caste, socialism and social capital”

  1. As a current resident of a Himachal village, the relatively high level of social capital in the society there over those in the plains is definitely striking. My own reasoning for this was initially similar – that taking care of your neighbors was a survival strategy in such places like Rajasthan, Kutch and the Himalayas where scarce resources need to be shared rather than exploited to ensure a future.

    Now what might be interesting to note is that the caste system is still very prevalent in the society here and strongly dictates your social standing. Is social capital then more closely linked with actual capital than the caste system?

  2. I am not sure your theory of “social capital” and caste=socialism makes sense in all Indian contexts.

    I suspect in many places the severe resource crunch is what contributes to lack of social capital. Earlier in Howrah station, seats on the trains to Asansol (Coalfield Exp., Black Diamond Exp.) used to be such a premium that touts used to board the train at the siding in Liluah, and then sell of the seats for a few rupees. They needed the money, people who were going the full length (or greater part thereof) of 4-5 hours to Asansol or Howrah needed the seats – and the market ruled.
    Once there were more trains (Asansol Express), buses (Volvo), and other transportation alternatives, this demand and supply has gone away. But has the “social capital” improved? I am not so sure.

    On a recent visit to Allahabad for a marriage, I noticed that guests at the wedding – most of whom I did not know – were fairly rudely elbowing each other at the dinner buffet. Many of the expat Indians here in Los Angeles have also commented that they feel in many instances Indians are pretty rude to each other. I suspect often this is because of resource crunch.

    As the Pink Floyd song Money says:
    Grab that cash with both hands and make a stash
    Money get back
    I’m all right Jack keep your hands off my stack.

    1. Not necessarily. I assume guests at your wedding would be from the middle class and above sections of society and can’t claim to have been suffering from a resource crunch.

      I suspect that the lack of social capital that we see in India has also to do with urbanisation. The social capital built up in rural India, useful for a rural context, is utterly irrelevant in urban India, which is a completely different society in so many ways.

      We are still in the process of figuring out the rules of how to share the resources in urban India in a reasonably efficient manner but I fear that that is not going so well with urbanisation outstripping our ability to adjust to the urbanisation.

      I fear that our inability to have minimum common agreed rules (and not just laws) on how to live in an urban society will lead to a fatal collapse.

      1. Guests at the wedding, at least the ones I am referring to, were surely from the middle class.

        In Calcutta, Salt Lake City in particular, it is almost impossible to get a cab when you need it. Same story in another location (Mukundapur).
        I have had considerable difficulty getting train reservations for travel between Allahabad and Calcutta. The reverse, while easier because of starting from a terminus, has also been difficult at times.
        My father keeps mentioning how many a times certain products will be almost impossible to find – either there is insufficient seasonal supply (summer fruits like kala jamun, golap jaam, even some varieties of mangoes, monsoon time Hilsa fish), or perhaps artificially created scarcities of essential commodities. The availability of cooking gas in Calcutta is a perfect example. The lack of continued power in Allahabad is another example.
        Last visit to Allahabad we had considerable difficulty in finding ATMs that would work on a particular day.
        The pervasive sense of resource crunch is certainly present for the middle class, at least the one I am aware of.

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