Saturday, January 03, 2009

Lazy journalism?

In The Next World Order Gurucharan Das states "The speed with which India is creating world-class companies is also a shock to the Chinese, whose corporate structure is based on state-owned and foreign companies.
I have no satisfactory explanation for all this, but I think it may have something to do with India’s much-reviled caste system. Vaishyas, members of the merchant caste, who have learned over generations how to accumulate capital, give the nation a competitive advantage. Classical liberals may be right in thinking that commerce is a natural trait, but it helps if there is a devoted group of risk-taking entrepreneurs around to take advantage of the opportunity. Not surprisingly, Vaishyas still dominate the Forbes list of Indian billionaires."
This sounds plausible but I wish that he has given some numbers, sources and more evidence instead of just a list of billionaires. One could have also said that Indian democracy unleashed entrepreneurial forces kept in check under colonialism or caste system or whatever. In any case, browsing through an old paper of John Harriss (THE GREAT TRADITION GLOBALIZES: REFLECTIONS ON TWO STUDIES OF .THE INDUSTRIAL LEADERS. OF MADRAS ), I find:
"Much in the business world of Madras/Chennai appears to be little changed. Most of the major companies of Singer's time are still important today; and the pre-eminence
of Brahman families amongst the business leaders of Chennai is as marked as it was in 19641. Amongst his 17 industrial leaders Singer found nine Tamil Brahmans(seven Smarta Brahmans, or Iyers; and two Srivaisnava Brahmans, or Iyengars); four Chettiars; one Mudaliar; one Kamma; two Muslims; one from a Gujarati merchant Hindu family; and one from a Syrian Christian family. The nineteen family or other ownership groups. which I identified amongst the 31 leading companies include: eight Tamil Brahmans (six Iyers and two Iyengars); three Chettiars; three Reddys; one Saiva Mudaliar (not the same as in 1964); one Kamma (the same family as in 1964); one Syrian Christian (the same as in 1964); one Raja and one Marwari. The Brahman-
owned family businesses of 1964 have, with only one exception (that of the ill-fated
Standard Motor Company), consolidated their positions; and they have been joined by
highly successful new companies, in software products and in chemicals, also owned
by Brahmans. The largest single group of the new software entrepreneurs is constituted by Brahmans. This new generation of Brahman entrepreneurs comes generally from a different social background, however, from that of the first
generation of Brahman industrialists. Singer referred to the fact that Four of the
Brahman families had come from such localities of Tirunelveli District as
Kallidaikkuricci and Alvarkkuricci, where Brahmans have been noted as traders and
bankers for more than 300 years, and others also came from relatively privileged backgrounds. The new generation of Brahman entrepreneurs comes, however, from families of white collar workers, minor officials, or smaller business."
This was a 2003 preprint published later. There is a more recent book by Harish damodaran India's new capitalists: Caste, Business, and Industry in a Modern Nation which I have not read. From the index here, it appears to be more of study of south and west India.
Businessworld reviewhere, The Hindu review here and
The Telegraph review here. The last review was discussed in Entertaining Research.
According to the Businessworld review "The Central Statistical Organisation’s 1998 economic census (that reviewed business ownership) provides some startling data. The census itself was enormous — it covered over 30 million businesses engaged in all forms of business activity except hard-core agriculture — construction, trading, hospitality, finance and other services. Other backward castes, scheduled castes and scheduled tribes owned almost 45 per cent of all business enterprises."
An interview with Harish Damodaran here.Excerpt: "Simply put, what I saw was a diversity of ownership by caste in the South, unlike in the North where every industrialist is a Bania or Khatri. In the South, the farmer could be Gounder or a Kamma, as much an industrialist could be from these castes. All this set me thinking and, around mid-2004, I started researching and examining the database of BSE-listed companies to try and trace the caste origins of the promoters. I ended up creating a database of around 5,000 companies and all this eventually led to my writing the book." Much more in the interview.


Rahul Siddharthan said...

Gurucharan Das is not a journalist, but a former industrialist I believe, and this was an opinion piece. But that is not an excuse. In my opinion, columns such as this, written without deadline pressure, should show more, not less, attention to facts. As Rahul Basu says, neither Narayana Murthy nor Azim Premji are Banias; nor, one could add, is Ratan Tata or the Godrej family or quite a few others. These names are among the first one thinks of in Indian industry. The Indian industrial world doesn't consist of the Ambanis alone... But as Rahul B suggests, Das is not so much making a serious argument as trying to push a particular agenda.

gaddeswarup said...

Thanks Rahul for the corrections and references.