Feb 10, 2013

Dalit Capitalism for Nepal

Despite the almost universal acceptance of free markets as the most superior system for economic growth and prosperity around the world, the concept does not resonate well with policymakers and public intellectuals of Nepal.In this context, free market as a means of social transformation may sound like a paradox but that is precisely what it is. An example from Nepal can shed light on this phenomenon.

Going by the law

Caste-based discrimination is arguably the worst social evil facing Nepali society today. Although it was officially abolished in 1963, the problem persists and is prevalent across the nation, especially in remote parts. Oppressed castes have been historically denied access to decision-making as well as power sharing. The untouchable castes are estimated to be around 15 per cent of the total population and almost half of them are below the poverty line, which is much higher when compared to the national poverty rate of 25.16 per cent. The government has passed the Caste-based Discrimination and Unaccountability Act 2011 to prohibit caste-based discrimination in both public and private spheres but the effectiveness of the law to prevent such practices is yet to be seen.

As long as these people languish in poverty and are economically dependent on people of 'higher castes', people of lower castes will have a hard time trusting legal remedies as a recourse for their ailments. Letting the socially oppressed economically empower themselves by encouraging them to participate in the market process, however, can be an effective way of discouraging discrimination. As Nobel Laureate Economist, Milton Friedman once said, “The great virtue of a free market system is that it does not care what colour people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.” Thus free market is an antidote to discrimination based on caste or other ascribed values rather than merit. 

Changing scenario

In fact, this transformation is in progress in many rural parts of the country. Foreign employment, which is estimated to be engaging more than three million Nepali workers already, has been a popular source of economic empowerment for people of oppressed castes who find little or no employment opportunities outside their traditional jobs in the current social system of Nepal. “As dalits have started to go abroad, they have started getting richer and more confident about their rights. And in many cases, people of higher castes have started to become financially dependent on them for loans and borrowings. In such a scenario, it is undesirable and difficult to discriminate against dalits,” a school teacher from Hodaa village of Kalikot district told this scribe during a visit to the region.

Such economic empowerment can be a more sustainable solution to the problem of caste-based discrimination than enactment of new laws or use of force to change people’s behaviours. Similarly, development of entrepreneurship among dalits within the country is also contributing significantly in their empowerment. A study titled Social Inclusion of Dalits through Micro-enterprise included in Micro-enterprises Development for Poverty Alleviation report by Ministry of Industry notes that 83 per cent of dalits engaged in entrepreneurial activities in Nawalparasi district have started getting respect from non-dalits, whereas 28 per cent of them have started approaching police, courts, local groups and government offices as compared to just nine per cent in the past.

Practical and effective

The idea that free markets are beneficial to oppressed castes has been corroborated by India’s experience since the economic reforms of 1991. Chandrabhan Prasad, a well known anthropologist and dalit activist in India, has termed the transformation of dalit people of India after the economic reform as ‘dalit capitalism’. In his study titled Market and Manu: Economic Reforms and its Impact on Caste in India, he argues, “The market has the potential for neutralizing caste in India’s public life and finally leading India into a caste-free zone. Unlike the State, the market operates from within caste society, as an internal force, and hence has the inherent capacity to rip apart the very fabric of the caste order.” And much to the credit of his hypothesis, Dalit Indian Chamber of Commerce and Industry which was formed in 2005, now boasts of more than 1,000 dalit entrepreneurs as members, majority of whom were able to embark on their entrepreneurial journey after the economic reforms of the early 1990s.

Hence, liberalization and market-oriented economic reforms could be a more practical and effective solution to one of our worst social evils. Unlike the picture painted by politicians and public intellectuals about markets, as demonstrated by the case of India, free market whose main value system is merit rather than caste, can be a perfect antidote to the unfair value system created by the caste system.

--Surath Giri