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Dialogue Between Rajiv Malhotra and Prof. R Vaidyanathan – Part A – Benefits Of Jati System

Dialogue Between Rajiv Malhotra

Rajiv : I wanted to start by asking you about the Jati system. A very controversial topic, the moment you say Jati, people immediately jump on you and say oppression, ‘it’s very bad’, ‘Hindus are to be blamed’. Then Hindus get defensive and say no! But you have a very different view. You are saying that actually Jati structure is very good for the economy and it is not oppressive, it is actually protecting people. So can you elaborate on that?

Prof Vaidya: You brought up this interesting issue of the Jati system. I’ve always maintained two or three important things in this.

First thing is, when we talk about Jati, it doesn’t mean we talk about Caste discrimination. These two are totally different things. People immediately jump and then, second is I think you’ve been writing also, you know quite well that this whole idea of Caste is taken from Portuguese language, prior to this we were not having it. It was not hierarchical, it was made hierarchical with the British in order to suit their own idea of how Bharat should be viewed, because they have this in the Government service in Britain, the A, B, C, D classification, so which is one. If I recall correctly, in 1881, the first to Census, brought in this whole idea of Caste enumeration and hierarchically bringing it. If my numbers are right, some 1300 and odd castes were listed at that time. In 1881, first Census of Bharat, prior to this there was no regular census.

Rajiv: But Jati was different.

Prof Vaidya: But they…

Rajiv: …they turned into castes. So how is Jati economics?

Prof Vaidya: So that’s what they did and you know that is very interesting, In 1881 census, there were quite a number, nearly 100 plus were one-member castes. Only one member claimed under. And then they decided, based upon their own idea, how to make it hierarchical. Till then there was no idea of hierarchical because there is a huge churning that is always taking place. What we consider today as so called lower-groupings in the communities, they came in the higher-grouping in the communities and vice versa. If you for instance, talk to lower-grouping, they will never recognize themselves as lower-castes. They will say we were Kings.

Rajiv: But still I am trying to get what is the economic purpose of the Jati?

Prof Vaidya: Actually what has happened is, we have an uncanny ability to deride anything on which we can leverage. If you look at it, I use the word caste itself, significant amount of economic progress in various clusters, there are some 870-900 defined clusters of economic activity in the country. Not Bombay, Delhi type of thing, there is Tirupur, there is Sivkashi, there is Morbi, there is Punjab. So like that various places. All of these clusters have thriving economic activity,are boom centres and almost all of them are caste based structures.  

Rajiv: Not the upper castes?

Prof Vaidya: No! Not at all.

Rajiv: Okay! That’s important.

Prof Vaidya: Including the schedule castes. I have seen in Agra and other places. It facilitates in several ways. One is, risk mitigation for instance.

Rajiv: Ok, so now we have started the real point. First benefit of caste is risk mitigation.

Prof Vaidya: If suppose somebody fails, other don’t look down upon him as a failure or anything. They go and help him.

Rajiv: Do they support each other?

Prof Vaidya: Yes. They support each other.

Rajiv: So it is an economic club.

Prof Vaidya: Yes. Credit is made available without much security or paperwork because they know that there is a caste pressure on him to repay. It’s more a question of honour, not rule. It is more relationship based. We are a relationship based society, not rule based society. Relationship based society has got ideas of concern about fear of God, more than fear of love. The urban people in Bharat, the middle class and merchant banking groups, they don’t have a fear of God.

Rajiv: So is it like a chamber of commerce?

Prof Vaidya: Sort of. You can call it.

Rajiv: There is a chamber of commerce of people who are in one industry or another industry.    

Prof Vaidya: Yeah, I accept this chamber of commerce what we loosely call, ‘suited-booted-tied’ people. These people don’t have any of those type of things. They are mostly dhoti-clad, pan chewing and they do not even speak English.

Rajiv: But what is the secret to that they say we’ll be a club, we are all fisherman or we are all growing the same thing, we are not competing against each other, so what is the secret to cooperation not competition.

Prof Vaidya: Secret to cooperation is because their view of the world in terms of business is, the opportunities are so large. So there’s no need for cut throat competition. The other thing is also very interesting, that is an opportunity to take over the activities of another caste person from the same location in Tirupur. I was talking to him why he did not grab it? He said no sir, that is not normally done.

Rajiv: So they will not do hostile takeover? They will not try to wipe out the competitor.

Prof Vaidya: No. He says it’s not required.

Rajiv: It’s not within the honour?

Prof Vaidya: It’s not within the honour. It’s much larger opportunities and other thing is they don’t operate on ‘greed is good’. No! They don’t operate on that. They accumulate wealth and then they share it. Very important. Many of them have told me, the greatest of characters in Mahabharata is Karna. Not Arjuna, not Krishna. For the simple reason, he shared. So, that is what we should do. Our life is short. I think we have to understand this whole groups’ approach toward the business and activity is totally different.

So, risk mitigation, credit, market access – these are the benefits of Jati.  

This system also encourages youngsters. For instance, the Patels who started the Motels in the western coast of US. Practically, they have captured the entire motel business. They have encouraged large number of people of their own community.

Rajiv: Yeah. If you are a Patel, they’ll set you up. They’ll get you a motel. You are in business.

Prof: Correct. Or you go to this Antwerp, a small group of people, Jains actually, they are called Malankar Jains, they are a very small group but they have captured the diamond business in Antwerp. When I was visiting Brussels, some hotel had this Jain food counters. So I was puzzled. Why Jain food? Vegetarian food is okay but Jain food. Since the customer base is like that. To an extent, Wall Street Journal wrote an interesting article because the Jews had 70 percent of the diamond business in around 1970’s-1980’s. Today, these people (Jains) have 75 percent of the business. So, Wall Street Journal wrote a very interesting article, first time, the Jews have been defeated without violence. That’s the most important part of the story. Again they have operated as a very small cluster or a group. Very important is, Caste is a good cluster to leverage on it.

Author: Rajiv Malhotra

Published: May 04, 2017 (First published on

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