PLSC 270: Capitalism: Success, Crisis, and Reform

Lecture 17

 - The Case of Mister Balram Halwai


Professor Rae discusses Aravind Adiga’s novel The White Tiger. The novel reveals the difficulties developing countries face dismantling entrenched inequalities. Corruption and chronic rent-seeking behavior can be major obstacles. Other aspects of the novel, including India’s religious history, the role of caste structure, and entrepreneurialism, are also explored. Links are made between themes from the novel and previous class discussions on the nature of capitalism.

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Capitalism: Success, Crisis, and Reform

PLSC 270 - Lecture 17 - The Case of Mister Balram Halwai

Chapter 1. Introduction [00:00:00]

Professor Douglas W. Rae: Well, this is what a well-worn copy of White Tiger looks like. The style of it is pretty striking. Anybody want to take a shot at other novels that it remind you of? Yeah.

Student: [Inaudible]

Professor Douglas W. Rae: Not the cover.

Student: It reminds me of Salman Rushdie’s Midnight’s Children.

Professor Douglas W. Rae: Okay, that’s one interesting suggestion. Sophie Quinton, where are you? What do you think?

Student: What do I think of the book, or is this related to the warm call email you sent me the other day?

Professor Douglas W. Rae: The warm call.

Student: Well in the back of White Tiger there’s sort of reading group discussion with the author, and one of the thing’s the author says that is kind of interesting is that his inspiration for Balram was — he’s sort of a composite character that came out of the author’s experience just hanging out in slums and train stations, and in servants quarters, and listening to what, basically, the underclass of India are saying, and how they are thinking, and it’s sort of — it’s interesting that Balram, who’s such an angry character, is the embodiment of something very real that Adiga, I guess, felt talking to people on the streets.

Professor Douglas W. Rae: Okay that’s good. In the — he also mentions three American novelists in the back, did you notice that?

Student: No, I did not.

Professor Douglas W. Rae: Okay. Well it’s interesting, the — I’ll quote him — the influences on White Tiger are three black American writers of the post World War II era: Ralph Ellison, James Baldwin, and Richard Wright. It has many ways to look at it, it is written in a very straightforward style that is — each paragraph is pretty straightforward. The subtext about how it’s being told is a little more complicated, and one of the other things he says in the back which — and this goes to the point Sophie made, is that while none of the characters or incidents are copied out of journalism, which is the author’s business, all of them are meant to be representative of something real in Indian life, so that the book is literally fiction, but has a purpose like many of the best works of fiction, has a purpose of describing something that is very real. Are there ways in which fiction can do a better job than social science of telling the truth about a country? Anybody got a thought about that? Yes?

Student: Well it’s an art form, and something like social science can’t really say well this makes me feel this, or this is like the nuance of that, and that’s where art plays in. I mean — also, I mean, it’s mass media too in a lot of ways, so you can reach a lot more people through this and have it easily understood.

Professor Douglas W. Rae: Okay, its mass media, but it actually does something that most non-fiction written by academics can’t do; economists, political scientists, people like that, by and large a little wooden and rigid, little category bound, a little obsessed with methodology. And this book covers a huge swath of very complicated aspects of a society which, as far as I can tell, is top half dozen in the way of complexity in the world. I mean the structure of — the historical structure of India and the incredible rate of economic and sociological change have very few equals elsewhere.

Chapter 2. White Tiger: Darkness [00:04:35]

Evia, have I got that name right? Again and again the concept of the darkness comes up in the book; help us to try to understand that.

Student: Yes I think it’s sort of literally and figuratively the darkness of India, the parts of India that have sort of left behind in the all the development and globalization, where there’s no electricity so, like, literally it’s dark when the sun goes down, and where there’s also a lack of like basic necessities, like sanitation. And, like, proper food, and I think also the darkness of sort of corruption and bribery, and like, theoretically there being resources, but those getting funneled into the hands of, like for example, the great socialist whose campaign to sort of lift the darkness out of the darkness, but ended up just getting sort of sucked into the bribery of people in the upper castes in the town and continuing to take advantage of the lower caste, like of the [inaudible].

Professor Douglas W. Rae: From the point of view of village India, deep in the darkness, is it clear one way or the other whether the economic — miracle may be too strong a word, but the incredible progress in overall development that’s been made since about 1990, is a good thing or a bad thing?

Student: I think — like I think it kind of goes both ways, and I think he talks about it in that — I guess he sort of talks about it as the difference between the north and the south or what like the two cities he was in. When development gets kind of entrenched in corruption and then it ends up being a bad thing, and ends up taking advantage of people at the bottom. But I think, to me, it seemed a little optimistic that it can be a good thing in places where it’s been done properly.

Professor Douglas W. Rae: Okay, you have it in the back of your mind an idea or two about what doing capitalism properly means?

Student: Well not really. I guess —

Professor Douglas W. Rae: I’ll bet you do.

Student: You know not corruption, not bribing policemen to —

Professor Douglas W. Rae: Okay, not corruption, not bribery.

Student: I mean there — I don’t know if it’s — there are I guess a lot of things but I think that’s what he tells us.

Professor Douglas W. Rae: Now let’s go on and we’ll find some of them.

Chapter 3. White Tiger: The Stork, the Raven, the Wild Boar and the Buffalo [00:07:11]

Sudir — there’s a passage in — I think it’s the first night in the book about — I think it’s four animals, am I right?

Student: Yeah.

Professor Douglas W. Rae: Who represent people — can you help us with it?

Student: Sure I think — the first point is that Adiga’s making a statement of how — and quite unabashedly, landowners as animals, who in this case quite literally feed off [inaudible] physical and human resources. The other obvious point is that the animal’s Adiga chooses to represent the landlords aren’t particularly glamorous. I think he has a view of landowners as tacky, crass, lazy, and it’s clear that one of the few reasons or main reasons that they hold a position of power in society is they’ve probably descended from families of landowners who have a long kind of history of exploiting and extorting from the poor.

Professor Douglas W. Rae: Okay. Now here’s an interesting parallel. If you think about the — about Clark’s Farewell To Alms, one of the big lessons there is that land is the primary basis of economic return in pre-modern societies, and loses its relative standing with development. If Adiga is right are the stork, the raven, the wild boar and who else?

Student: Buffalo.

Professor Douglas W. Rae: And the buffalo — are they basically fossils of a previous era grasping for the last straws of a powerbase that will go away, or given the nature of rural India will they persist in that position generation after generation, do you think?

Student: You know it’s hard for me to kind of identify the trajectory of India’s development persisted — I don’t know how much of — I guess I mean rural India is a large — makes a large chunk of the country and the economy, for what it’s worth, so I think there are probably, in the foreseeable future, there’s probably a very good chance that characters like these four will still retain a good deal of influence in those spheres. I mean obviously corporations are making their way into these — into rural areas and setting up innovation camps and large offices, but to the extent that India is — the rural base is strong, I think these people will thrive.

Professor Douglas W. Rae: Okay, and if capitalism seeks economies of scale as its want to do, small landholding will be eventually undermined by large-scale landholding, and agricultural development on a vast scale. That would be the textbook hypothesis. If you look at what’s happening in Brazil, for example, development on the scale of farms twenty-five or thirty-five miles square, twenty-five by twenty-five say, is commonplace. Maybe India’s different, and the reason it may be different is that the indigenous — the density of indigenous rural population is much higher, and the process by which land would be aggregated may happen quite a lot slower. Maximillian? Where did the title of the book come from and how do you understand it?

Student: He calls it The White Tiger because Balram stands out of all the other servants like a white tiger stands out of — white tiger stands out of their — I don’t know other animals who are not albinos because they’re so rare. There’s one incident leading up to Balram coming to white tiger that is, I guess, where they are on the way with the two sons of his masters to bribe the minister and Balram reaches out to a beggar intuitively to help him and he gives him some money, and the sons of his master get really angry with him giving him the money, and they start to complain about how many taxes they have to pay you and that they are already helping the poor. Yeah, that’s how he realizes that the entrenched inequalities in Indian society will perhaps persist despite India’s new prosperity.

Professor Douglas W. Rae: Okay good. Do you remember the part about the schoolhouse early on where there’s a surprise inspection, does anybody remember this? Am I drawing a blank here? Over there —

Student: Yeah in the beginning I believe there’s a surprise inspection and he’s — the inspector comes in an asks the students a bunch of different questions, and really nobody’s able to give any good answer except for Balram, and he then asks him, I guess, what’s the — he asks him a certain question. I forget exactly what the question is but the answer was that it’s a White Tiger, that’s the most unique.

Professor Douglas W. Rae: Okay so he gets named White Tiger for being uniquely talented in a situation where talent is not being developed. How does the schoolroom operate, do you remember that?

Student: Well it’s interesting that Balram didn’t actually blame the teacher, because I guess the teacher like would steal the uniforms and all the resources that came, but I think the one point Balram even says, like, well, I mean, no one really blames him because his payment also gets taken by someone else. So the teacher — there’s just like a chain of corruption that ends and the teacher basically stealing the resources that were meant for the kids and just sleeping all day or — and while the kids do whatever.

Professor Douglas W. Rae: Okay they’re — quite often there’s a mention of the fact that the teacher was snoring while the students were supposed to be learning somehow from one another. You’re right in that. I think the narrator says something like, “Those who live in a dung heap can’t be expected to smell well.”

Student: Right.

Chapter 4. White Tiger: Is Corruption a Fairly Major Issue in Indian Society? [00:14:17]

Professor Douglas W. Rae: So there’s a kind of environmental explanation — social environmental explanation. What do we think? Is this a man bites dog story, or is corruption a fairly major issue in Indian society? Who’s got an opinion?

Student: I think it’s a fairly major issue because even when you make the transition into the lightness in the book, you still get severe corruption of course with — you know the — Balram’s boss going to give the big bags of money to the government. So I think it’s corruption that pervades every level, and kind of the light is a little bit of a deceptive name for what Balram was into because even at the height of his success the only way he can succeed is by killing someone and then by paying off the policeman.

Professor Douglas W. Rae: Okay, that’s elegantly put but its evidence from fiction about fiction. What — the judgment I’m looking for is, is his claim that the book represents broadly truthful patterns in the society or not? You buy it or not?

Student: Well I mean having — I was in India myself several times, and having many friends from there, I’ve definitely heard considerable stories of corruption. I mean I’m not in a position to judge the society as a whole but it seems like it would have an element of truth to it certainly.

Professor Douglas W. Rae: Okay, has anybody glanced at one of the world rankings from, say, Transparency International or other organizations which evaluate levels of corruption? Okay the Socratic Method stops here. India is near the top of the world table in corruption as an issue perceived by people in business as problematic. Anybody with substantial experience want to contradict or elaborate on this point? Yes. We need a microphone in the middle.

Student: For large part of people staying in India, especially doing business there, corruption has almost become a way of life, so they see it — they’d rather call the system flexible than calling it corrupt. If you want to get a government sanction, which would generally take three months, you can get it done in three days if you pay an additional amount and that’s the premium — that’s the premium not corruption, so for a large part of the society it’s a flexible system rather than a corrupt system.

Professor Douglas W. Rae: Okay, and the good American economist would call it?

Student: The efficiencies in the market that is exploiting them.

Professor Douglas W. Rae: Inefficiencies due to rent-seeking, right?

Student: Exactly.

Professor Douglas W. Rae: Rent seeking, I love the concept. Danielle , right on the — are you here Danielle? Hi, Dr. Rampundi is it, Pambi?

Student: Something like that.

Professor Douglas W. Rae: Something like that. Tell us about that incident in the book and give us something about what you think it means.

Student: Okay so on page forty-one in the book there’s — when they’re all sitting in — and the White Tiger has taken his father to the hospital and they’re sitting in the waiting room waiting for a doctor who won’t come, and an old Muslim man starts telling a story about this fictitious doctor, Dr. Rampandi and he talks about how the socialists sells off plots of like districts to doctors, and the doctors buy these districts, almost like a feudal system, and then the doctors in those districts will — he’ll take part of the salaries from these doctors and then tell them oh well now you can just go off and work for a private hospital, you don’t have to worry about these people, I’ll write it down in my ledger that you’ve been there. Basically the government is on a totally different strata, and all the money or benefits just get written down or written away, and these people are left dying or with wounded legs, like the Muslim man, and he’s just sort of laughing about it. There’s this sense like — with the Muslim man and all the people in the waiting room they’re sort of laughing about their problems or bragging about them because — I mean his father dies in the end, Balram’s father dies in the end because his doctor never comes, so the corruption and the resources are just like strewn about and there’s just that.

Professor Douglas W. Rae: Okay, now that passage is actually quite polemical the way it’s written. It probably overstates, right — there are probably a hell of lot of places where you actually can see the doctor, and the doctor does pay attention to people he’s supposed to pay attention to, but the general pattern described there — what’s wrong with corruption? Corruption — I mean, it — there are serious people who think corruption is not altogether a bad thing. For example, there are people who write about American cities and say if you have to choose between corruption and civil service bureaucrats who do everything to the letter of the law, take corruption. An example is — historical example was the Fulton Fish Market in New York, which was run by the mafia for a long time, and ran pretty efficiently. There was some rent seeking and some buyons but it worked, and then Rudy Giuliani took it over and put in clean bureaucrats to run it, and people thought well it may not actually run as well this way. Now but there is — there’s counterpoint to that. There’s some big themes about why corruption is, from the point of view of growth and development and human welfare, probably not on average a great thing. Did you have a comment?

Student: Well yeah we can almost go back to Adam Smith in this regard, but not what he’s most famous for, but he’s — he kind of gives us self interest, but it’s not this naked, isolated form of self interest. He said capitalism only functions upon a foundation of ethical participants, and if not, it’s brutally, grossly inefficient because you can’t get the right information around the right time.

Professor Douglas W. Rae: Terrific, right? This is a huge point in understanding Smith. Smith is a moralist, Smith in his own time his famous book wasn’t this it was The Theory Of Moral Sentiments, and Smith is saying, “Articulate self interest frankly pursued, within a framework of honest communication, and with a government in the background that enforces contract and prohibits fraud, within that framework self interest creates an upward draft on an economy. But if you take away that framework, the ethical aspects of people’s beliefs and the proper functioning of the government in enforcing contract and related things, you take all that away, thus the invisible hand story works if anything in reverse. We’re inclined to just assume that to just march too quickly by the issue of that foundational issue.

The — have I asked you this? How many of you have done Ben Pollack’s course on Game Theory? That’s really — I recommend it to all of you, but think about this problem. Suppose you are operating in a system where everybody else is willing to lie in order to profit, and each one of those other people assume that about all the people she or he is dealing with. How do you form a strategy to make a business run? The answer is that it is virtually impossible, because you cannot anticipate the way people respond to straightforward incentives. It’s a big deal and getting out of that dilemma right — another way to put it is there’s a famous philosophical example, one version of which is a sentence written inside a box which says this sentence is a lie, or the sentence in this box is a lie. How do you interpret that? True or false? False if true, true if false, you can’t get anywhere with that; very hard to live that way.

Chapter 5. White Tiger: The Caste System in India [00:24:02]

Vivek? Caste is a really complex cultural structure which I’ve read a little about and talked to Indians a little about, and it’s obviously important. Help the uninitiated here a little bit.

Student: Sure. I did some research last night but I think I got my most profound revelation when I talked to one of my best friends from India. He gave me an incredible perspective on caste and most people don’t actually know about that; I didn’t know about it and I’m going to go a little bit into the history of caste, because it’s — it’s honestly fascinating. Caste actually started out as a really advanced complex system that we see in today’s capitalist world. It started as division of labor. It started off as promoting specialization. Caste — a caste wasn’t a bad thing when it first started. It just means that people were specialized in certain trades. For example, we have blacksmiths and we had traders, and we had people on different sectors of the economy here.

Similarly we had castes in India, and they weren’t, sadly, constraining, they were just indicating what you are best at, its division of labor. Caste actually started degrading, unfortunately, and it’s actually gone through some de-evolution. This was catalyzed when the British came. When the British came they didn’t grasp caste as — and the advanced system of division of labor and specialization, they grasped caste as a more feudal system, and so they started perpetuating this thought that once you’re born in a caste you’re stuck in a caste forever, and that’s what started bringing the negative connotations toward caste.

That’s what started making caste constraining and that — I guess the best way to put this is that the — after the British came, it basically started destroying the cult. People started being born in castes and they started think — believing they were relegated to these castes. If you look at the book, Balram ended a passage of the quote that there are only two destinies: eat or get eaten up. And that just shows the caste evolved from being an advanced concept of division of labor, or specialization to something that you’re constrained too. I think that today the only thing that separates caste from an advanced capitalist structure is mobility. In the caste, there’s not mobility because you’re born into a system and you’re stuck with it forever. And in the American system for example, you at least have the hope and the ability to move from caste — from trade to trade, from caste to caste, and I think that’s a trend that’s going to be reversed.

Professor Douglas W. Rae: Well — and at the foundation of India as a democracy in 1947 there was a huge emphasis on the dalit, the untouchables, and on making sure that they had opportunities similar to other people. Anybody know anything about that effort? Yes.

Student: There — The Mundill Commission started this program where — kind of like affirmative action here, but much more restrictive in the sense that they are numerical quotas. So there are quotas for three types of people: OBC’s, other backward classes, which is not necessarily as much cast, or jati, but more about economics. So a brahmin, which is the highest caste can also be part of this caste — I mean part of this relic designation, if they do not earn as much as they are supposed to, like ten rupees a month or something like that. Then you have Adivasis, which is a scheduled tribe system, and then you also have a scheduled caste system which goes back to the original caste. Now what’s really interesting about the caste system as — it was just mentioned that there is no mobility, but in essence, there’s still differences going on in India right now, so people do move around — can move around. For example, they can go in and out of the OBC category, so that still exists. Then these designations happen in government positions, so in IIT’s which is — as you know Hyundai was from IIT, and all these other institutions that are government institutions like the proportion of the population that is in any of these designations have to have those seats in those institutions.

Professor Douglas W. Rae: Good, admirably done. Jasmine, I asked Jasmine to think about the passage which begins with chopping onions unusually early in the morning, and then the discoveries which followed that, and what it might tell us about the role of religion.

Student: Yeah. On page ninety in The White Tiger it talks about like a discovery of Balram, about the number one driver Ram Prasad, and basically he just — he found out that Ram Persad was a Muslim because he was observing Ramadan and he was not eating. He was chopping up onions in the dark because he has to fast during the day, and so Balram was able to use this fact as an advantage to him, and basically because the landlord is a Hindu and there is kind of like a religious tension between the Hindu majority and Muslim’s in traditional parts of India, so when he talked to another servant about this and he was able to make his way to Delhi because he was using this fact to his advantage.

Professor Douglas W. Rae: Okay, so historically this cleavage between Muslim and Hindu has been a huge actor in the history of South Asia?

Student: Yes. Basically I guess a lot of Hindu’s thought that Muslims was like an invader culture, and also in like the 1947 when they had — well basically India was subdivided into Pakistan, like the Muslim subcontinent — Muslim country and the, like, now modern India.

Professor Douglas W. Rae: Good. The other layer is captured in the line in the book, “there is no hatred like that of the number two servant for the number one servant.” That close conflict we recognize — you see that everywhere around here, you see it even on the faculty. Susie Park? That’s the question. I was going to ask you about servant hostility to servant and so on.

Student: Well I guess — well basically it’s kind of similar to servant hostility to masters, I think, because, like, when you look at, like, the person to person, like you’re not actually hating the person themselves, but more like — because you’re — like he has this, kind of like, bitterness at the system itself, but then, like, in some parts of the book it said they don’t dare, like, blame the bigger government, like the nation itself, but they’re more about like blaming like the local like smaller like level, and like the landlords — so it’s kind of like they are — like the White Tiger was more into like hitting the number one driver rather than like the system itself.

Professor Douglas W. Rae: Right and so the idea is the displacement of hostility to the huge system onto the little system within the household. Nafez the — there’s — I think one of the great lines in the book is the one about the coop; the chicken coop is guarded from within. What’s all that?

Student: I mean the way I interpret it was it’s more like a social construct, where I mean if you just look at the back of the book it says, Balram Halawi is a complicated man servant, philosopher, entrepreneur, etc., but when you’re inside the coop you’re only thinking of how can I be a better servant. So it’s a social construct whereby, I mean, we can even relate it to the hatred of servant one — servant two to servant one is because the servant — you’re not thinking of becoming a master, what you’re aspiring to is servant one, and it just scares you to get out of that social construct and the only way to get out of it is to resolve to something extreme like killing your master.

Professor Douglas W. Rae: Okay so that often the victims of a hugely oppressive situation are hostile more to people who are their peers or near peers then to people who are their vast superiors, and that’s a pretty good generalization actually. Sebastian? There we are. Tell us about the car accident.

Student: All right, so in page 137 there’s a — Pinky Madam decides that she wants to drive, tells the driver to get out, then she comes back, she’s very drunk at this point, comes back, gets in — tells the driver to get back in the car and then drives off and hits something. At first we don’t know what it is, we quickly discover it’s a child, and everyone’s kind of in shock and I think — I don’t know if you want me to say more of the details of the accident, but the biggest implication is that then Balram is asked to take the blame for this accident, this master’s wife committed. Instead of thinking of how he cannot take the blame, he kind of starts automatically assuming how am I going to survive in jail, what am I going to do to survive? I think it goes back to that thing that we were just talking about on the rooster coop, where it’s just absolute perpetual servitude; it’s kind of very much intrinsic.

Professor Douglas W. Rae: Okay, good. Now — and what this is straightforward — straightforward criminal corruption. It’s a criminal act that the Kosh couple are committing and The White Tiger basically just lives with it. Later in the book — Ann where are you? Later in the book the concept of rage gets to be center stage, I think on page 196 is it; help us with that, what’s going on with that?

Student: Well I think to a certain extent he realizes that the only way for him to escape kind of from the rooter coop is to do something extreme. One thing that he talks about when he describes the whole rooster coop analogy is that like he mentions family as part of that explanation. He says that family is like the thing — that family is the thing that keeps you in the coop and so I think like he needs a really powerful emotion to counteract the family ties in order to break free.

Professor Douglas W. Rae: Okay, so he’s in two different coercive networks, one to do with his own family and another to do with the family which employs him. Jake are you here? The most dramatic passage in the book has to do with the ulterior uses of a whiskey bottle.

Student: Right. Balram uses the bottle to kill the son of his employer, and he does this to steal the money that Ashok was going to use to bribe officials and he’s go off, takes it, and starts his own life.

Professor Douglas W. Rae: Okay, how do you interpret what he does?

Student: I saw it sort of emblematic of the new India, sort of taking over and sort of replacing the old India, that Ashok and his family are sort of representative of because he’s the son of a landowner, he’s wealthy, and he’s using his money to try to keep himself in power by bribing these officials, and Ashok takes that money — or Balram takes the money and he goes and uses it to sort of start his own business and get himself up to the top.

Professor Douglas W. Rae: As he says an act of entrepreneurship.

Student: Right.

Professor Douglas W. Rae: There was a huge amount of parody in this. Do you think — how do you judge him for this?

Student: I mean I would say that it was — I wouldn’t condone it, but I can sort of understand it.

Professor Douglas W. Rae: Would you go so far as to say justifiable homicide?

Student: Not justifiable in the sense that he — the man that he murdered deserved it, but for him it was the only way to break out of the life that he had been living and — to me it just sort of — it really captured just how traumatic for a society — a change like modernization can be. Everyone’s scrambling to get themselves ahead and in the process people get stepped on, people —

Professor Douglas W. Rae: Okay so you see it as a rational act?

Student: Yeah.

Professor Douglas W. Rae: Not an act of rage?

Student: Yeah I think it was definitely a rational act, but I don’t know if that justifies it.

Professor Douglas W. Rae: Okay well I don’t think it justifies it. I’m not much on justifiable homicide as a cultural trope, but it makes it easy to understand, doesn’t it? Amy Chu in the law school has a book about — it begins with a story from her own family in the Philippines, and in it her grandmother is murdered by the family chauffer. The police record where motive is recorded as just one word: revenge. And the relationship between people who are completely dependent servants of arbitrary — families who behave arbitrarily and cruelly, this is an ancient story, and it’s one that’s easy to understand. Now let’s get back to bigger picture. Why is Balram so weak? Well there’s — I had another — I asked somebody about English language, who did I ask? Okay then I’ll ask myself. English plays a huge part in the class structure of a society like India. And the —

Chapter 6. White Tiger: Balram’s Economic Weaknesses [00:40:09]

Let’s just list Balram’s weaknesses economically. One is English is not his first language, his family and the debt to The Stork, was it —

Student: And the debt was the brother and sister dowry.

Professor Douglas W. Rae: Yeah. The debt which gets him jerked out of school and which is a constant burden to the family, that’s another weakness. He drops out of school because his uncle rips him out of school actually, forcefully. Other weaknesses? Caste, he is not from an advantaged caste. Sweet makers, I don’t quite understand why that disadvantage but — what about the world demographic transition? The world demographic transition bearing down on this young man at all? Yes because the huge surge of population in the darkness of India creates a devastatingly plentiful supply of unskilled labor so that the market equilibrium price of unskilled labor is very, very low. The standards you have to use in treating employees in unskilled or semi-skilled jobs in order to keep them with you are near zero. Rickshaw puller, rickshaw pullers have essentially no market power and it has everything to do with demography. It also, of course, has to do with educational opportunity, command of the lingua of the country, all those things, but when we talk about the demographic transition it’s this ultimately benign story about going from short lives and many babies, to long lives and fewer babies over a period of time. But there’s a huge coercive aspect to the way it works out during the transition for people who don’t have demographic luck. Luck of a — luck — big time luck, historical luck is a pretty big thing.

I’ll give you another example, New Haven had very few black citizens before World War II, and at the time that World War II, when southern agriculture was pushing labor off the land most of the black families who ever came to New Haven came here in about a fifteen-year period, and they came in search of industrial employment. Exactly a decade before that industrial employment collapsed, and went guess where? South. The industrial employment went south seeking lower energy costs and cheaper labor so that the economic — it’s of course a much more complex story, but the timing couldn’t have been worse, and Balram’s timing in demographic history couldn’t have been much worse.

Chapter 7. Video: India Background and SELCO [00:43:43]

Now Wednesday’s case about Selco [Video 43:53-47:15]. A couple of announcements in closing. The case is in two parts, A and B; both are posted on classes V2 for Wednesday’s class. On Monday I will be here only by video. I’m in Washington Monday and I’m going to speak the lecture to a lens and play it in my own absence, but otherwise everything will be normal and the exams will come back on Wednesday. My impression is that the grade s are outrageously high.

[end of transcript]

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