Dr. Kaivan Munshi is professor of economics at Cambridge University (UK) and a winner of the Infosys Prize 2016 for social sciences

Networking is a relatively new buzzword increasingly being recognised as a prerequisite of success in business and industry. But your research studies seem to indicate it’s an ancient phenomenon. Please comment.

Networks describe economic arrangements in which socially connected individuals interact with each other. This is distinct from the classical model of the market economy in which individuals and firms do not share social ties and do not create long-term relationships. Networks arise when markets function imperfectly. This is true of the traditional pre-market economy, as well as in many sectors of the modern market economy, particularly those undergoing rapid change. Thus, the motivation for networking is always the same, but the circumstances may be different.

India’s ancient caste system is almost universally condemned for restricting, indeed blocking, upward mobility for several centuries, if not millennia. Yet your studies seem to suggest that it offers social protection to members in adverse circumstances.

Although the discrimination, prejudice and exploitation associated with the hierarchical structure of the caste system are known to restrict mobility, there’s another aspect of this system which has received inadequate attention. It has to do with solidarity and internal cooperation within castes or jatis. There are approximately 4,000 castes in India and recent genetic evidence indicates that Indians have been marrying within their castes, almost without exception, for over 2,000 years. The resulting web of marriage ties has created networks of exceptional strength and scope within castes.

These networks have been used for centuries to provide mutual insurance to their members in the face of major contingencies such as health and income shocks, and to support economic mobility. Castes have supported the migration of members from village to cities where they help them find jobs and have supported their transition into business. This role goes back to the colonial era and continues to this day. While caste networks may be very effective in supporting group mobility, it is important to also acknowledge that these networks can restrict the choices of individuals. My work has shown that caste can thus be mobility-enhancing or restricting, depending on the circumstances.

You have conducted some research studies in Kenya. To what extent have caste and community networks contributed to the rise from modest occupations to the (under-appreciated) business success of the Indian community in Kenya?

My research in Kenya was not on the expatriate Indian community. However, the same caste networks that are active in India have been transported overseas to countries like Kenya.

Similarly, it’s arguable that caste and community networks are to a great extent prime factors behind the success of Indian communities in the UK, US and Europe. What’s your comment?

Caste and community networks have certainly supported their members in the UK, US, and Europe. However, this support is restricted to particular occupations in which the networks can be effective — the dominance of the Patels from Charottar in the US motels business is a well-known example. However, in other economic areas such as the corporate sector, caste networks are ineffective — and absent — in India and overseas. It’s important to understand that caste networks serve a specific function, to smooth out market imperfections, and this function is only relevant in particular economic activities.

Despite the sustained effort of political leaders, and especially the intelligentsia, to eradicate India’s iniquitous caste system and its hierarchies, caste continues to be a dominant force in Indian politics. What’s the explanation?

Internal cooperation within castes is used to support economic activity when markets function imperfectly. For example, by finding jobs for their members, and providing credit. And this can be extended to the political system. Clientelist politics describes an arrangement in which groups vote as a block for a candidate in return for patronage and targeted transfers once the candidate is in office. In the Indian context, the natural social unit around which clientelist politics can be organised is the caste or jatis, and major political parties have used such arrangements to their advantage since independence. 

What are the socio-economic development prerequisites for the fading away of the caste system and caste consciousness in Indian politics and society?

Once market institutions start to function effectively, caste networks will become less relevant and the caste system and caste consciousness will naturally fade away.

What is your current area of research and your future plans?

I am presently extending my research to the role of communities in the development process to (i) understand the role played by social networks in the unprecedented growth of private enterprise in China, and (ii) to examine the long-term process of assimilation in the South Asian community of the UK.