Reservations in India

Like millions of others, I have discussed this matter with friends, but I know precious little. However, it appears that the Supreme court is taking the matter up, so I better hurry and get my opinions out before they do.

So, here are my ill-considered thoughts. I don't know enough Indian history to base them on facts, so have tried to go back to basic theory. It would be great if someone who actually knows Indian history can tell me what makes sense here, and what is nonsense.

It appears to me that there are at least 5 possible arguments in favor of reservations/quotas:

1. The beneficiaries are poor. Ensuring that they receive a certain percentage of the jobs available is a kind of redistribution from the relatively wealthy to the relatively poor. However, no-one is using this as the main argument in favor of reservations. The argument seems to be that people from the Scheduled castes/ Scheduled tribes (SC/STs), and now the Other Backward castes (OBCs) should be beneficiaries of reservation regardless of their current economic status.
2. The beneficiaries are discriminated against. I considered this matter in this post. They are just as capable of doing the work required, but employers would rather not hire them. This, however, should be unsustainable in the long-run, because those employers who do overcome their aversion would be able to get good employees at bargain wages, and would, other things being equal, ouperform and outgrow their bigoted competitors.
   Perhaps the employers would love to hire them, but are afraid of the reaction from other employees and from customers? This is possible, and would be a good argument for reservations- the employers can now hire whoever they want, and can blame the government. However, almost 25 per cent of India’s population belong to the Scheduled castes and the Schedules tribes. With such a large population, it seems implausible that discrimination could be sustained in a competitive market for workers. (Hmm. But does India as a whole have a properly competitive market for labor?No- but thats mostly a rural phenomenon. More later)
   Also,this argument should imply reservations for Muslims as well- they are 12 per cent of India’s population, and are significantly worse off than Hindus, but I don't see any great demand for reservations for Muslims. If I were Muslim, this would have angered me quite a bit.
3. The beneficiaries are not terribly capable- reservations gets them jobs that they would not have got in a properly competitive market, but this is not their fault e.g. because of neglect or degrading treatment in schools that prevented them from learning. I can imagine this possibility- esp in villages and small towns where there is just one school accessible to the poor, or when poverty makes it difficult for parents to move their kids. However, is reservations the solution for this problem? I am not sure.
4. It takes a couple of generations for the effects of deprivation to be eradicated. Even if we assume that the beneficiaries were not discriminated against in school, they sure would not have been able to make the most of the opportunities that they had- their lives at home made it almost impossible. See the comments posted by "Steve" here for an impassioned voice in support of this view. I believe that growing up in a home full of books, with educated and knowledgable parents who let me think for myself, and who I could discuss stuff with, made me less of a dolt than I otherwise would have been. By bringing the most talented of people from the SCs/STs/OBCs into the professional class, even if they are not the best people for the job, you change the environment that their children grow up in, and prevent the formation of a permanent underclass based on caste.
5. The wealthy and powerful are what they are at least partly because their ancestors were able to extract wealth from the ancestors of those who should now be beneficiaries of reservations. However, I am not convinced that is the case. India has long been a poor country, and most of the wealth is new- the result of technology- rather than inherited. It can be argued that even the African-Americans of today have gained economically from the horrors perpetrated on their ancestors- certainly you see plenty of modern Africans apply to migrate to the US, but hardly any traffic in the other direction. A similar point can be made regarding India. In pre-modern India, practically everyone, regardless of caste, was poor. The wealthy would have been mostly high-caste (unless muslim?), but most of the high caste people around would also have been poor. (Hmm.. yes, most Indians were poor, but still perhaps the differences in wealth today are largely explained by caste? e.g. did lower-caste people have access to work in the mills of Mumbai? Did they have access to schooling? Chris Dillow considers enclosures here)

Personally, I consider only points 3 and 4 to have any weight. Against these points, I can see some arguments against Reservations. They have been thoroughly discussed in the media, so I just glance at them:

1. They are immortal: I cannot see any government at anytime being able to abolish them. Never.
2. Reservations for OBCs in particular are troublesome because the very definition is unclear
3. They ignore others who need help- muslims for example, who are also traditionally at least as oppressed as OBCs. And at all levels of society, women are worse off than men at the same level.
4. They distract us from what matters: most Indians will never benefit from reservations. The 50% of Indian children who are malnourished will never be able to benefit, regardless of caste
5. The entire idea of reservations, as well as the 50% upper limit that the Supreme Court set sometime back, epitomize the top-down, static, "quota and target" mentality of central planning. Another example is the Mumbai high court's ruling on mill lands. Grant McCracken offers a wonderful contrast.
6. They misunderstand the nature of the problem: crimes of caste in India are based on differences in power, not wealth. They are no different from other crimes against marginalized people across the world. They can only be fought by redistributing power, not wealth. Wealth will follow.
7. They misunderstand the nature of the solution: India is still a desperately poor country. We have no business fighting over the division of a pie we have not baked.

On balance, I am against reservations (what a surprise!), and especially against reservations in the private sector.

What would I suggest?

1. More urbanization, more commercialization: "Stadtluft macht frei". Marx had several good things to say about the bourgeoisie. One was "It has created enormous cities, has greatly increased the urban population as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life." He goes on to praise imperialism- in the Communist Manifesto! Rural life subjects the individual to the collective. It encourages sanctimonious behavior, and helps perpetuate prejudice. This is typical of the village mentality. Fierce competition in commercial life puts huge pressures on businesses to not discriminate. Schools need to keep their students, and parents have a choice of schools. This is not a panacea, but is a necessary first step.
2. More reservations (for how long?) in government services: especially in the Civil Service and the Police, coupled with moves toward limited government. Power remains very unequally distributed in India. For now, most Indians will remain in villages and small towns. The fact that some 22% of seats in the Indian parliament are reserved for SC/ST candidates helps. The intent is that vulnerable people in trouble should always have easy access to powerful people from similar backgrounds. This can prevent cruel crimes intended to "keep them in their places". However, this could also end as prophecied in this great book:

   Twelve voices were shouting in anger, and they were all alike. No question, now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.

   To prevent this would require a conscious move towards a limited, watchdog government. A govrnment whose role would be to protect the rights of the individual- that creature that is so rarely seen in India.

There, that should make everyone mad!