The Maharashtra government has extended its caste hiring quotas into the booming private sector. Because if you happen across an avian that lays ovoids of gold, the first thing to do is to throttle her.
“We’ve already been suffering under many constraints, like socialist economic planning and labour restrictions,” says Rahul Bajaj, chairman of Bajaj Auto, the world’s largest manufacturer of scooters and motorcycles and one of India’s largest companies. “If we implement reservations, we’ll have no way to become internationally competitive.”
It’s another example of legacy capture, where programs intended to be temporary are never discontinued. The system adjusts to the new baseline, the constituencies sucking on the taxpayer teat spend part of the windfall on lobbying, and the subsidies are only ever expanded (e.g. U.S. timber subsidies, weapons programs that the Pentagon doesn’t want but can’t cancel):
Many say the constitution intended reservations as a temporary measure. But the rising political clout of low-caste Indians (who make up some 50% of the population) prevented the programme from being discontinued. Instead, it was expanded to include Indians from lower-middle positions in the caste hierarchy… Singh’s reforms made a mockery of the affirmative-action policy, entitling over 90% of the population in some states to reserved jobs.
And the new regulations provide yet another stream of bribery revenue for government employees to look the other way:
Perhaps the haphazard and incomplete enforcement of reservations in the public sector offers a clue to the likely fate of the Maharashtra law. In the end, it might only apply to companies in which the government holds a stake.
The debate closely echoes that over affirmative action in the U.S.:
“Take the Nadars [a South Indian caste]. They’re filthy rich and yet they get preference over [higher-caste] Brahmins everywhere in Tamil Nadu. For all the things Brahmins did [to the lower castes] 100 years ago, you can’t keep penalizing them,” says K. Mahesh, chairman and managing director of Sundaram Brake Linings.
The reservations restrict the hiring market, similar to a no-bid government contract. But a Dalit leader conflates business efficiency with racism:
When industry suggests that requiring companies to fill positions with Dalit personnel will erode efficiency, it implies that Dalits are by nature incompetent, he argues. “I would say the very tone and tenor of these reactions against reservations from the corporate leaders constitutes reason enough for reservation in the private sector.”
Maharashtra has sparked a debate on whether the Indian government should adopt its quotas. For a nation still struggling with the yoke of a centrally-planned economy, that would be a major step back. Helping the poor get a leg up is a worthy goal, but it’s best accomplished via economic growth and transparent markets. Let’s hope prime minister Manmohan Singh, a free marketer and financial reformer, shoots down this trial balloon.
I blogged this here three months back.
two more points…
1) This is what will happen in the US if mass immigration of racial preference recipients continues
2) The only reason India was booming is because the upper castes (who make up the vast majority of the tech workers) were able to use the internet to insulate themselves from the economic dead weight of the government and the low castes. With the web they could engage in business with other groups abroad rather than dealing with the abysmal local infrastructure.
But with the advent of private sector quotas for incompetents, the leftists have now well and truly poured sugar in the tank. This is the consequence of the BJP’s loss: economy destroying leftists were empowered. I suppose they’ll be happy once India falls off the cover of Businessweek and Wired and stops participating in “imperialist” globalization. Back to Gandhi’s spinning wheel in every home…
While it is disheartening to read of reservations extending into the private sector, that does not mean market forces will disappear. If a company like Bajaj, Tata, or Wipro finds itself hamstrung in hiring the people it wants in one state, it can shift operations to another, less intrusive state. Or, like Infosys, you can set up a small operation in China, and threaten to make that the new base of operations. If this policy is extended to foreign companies, they too can simply shut down operations and move to another promising upstart such as South Africa, Russia, or the Phillippines.
I don’t pretend to understand the situation in India, but I must point out that using the terms “affirmative action” and “quota system” interchangeably is incorrect and harmful.
Affirmative action favors a minority candidate only when two equally qualified persons apply for the same position. Those who wish to dismantle affirmative action here have (rather successfully) disseminated the false idea that it’s a quota system.
Probably the best solution to inequity is equal access to quality education for all, preferably financed at the federal level (because local, property-tax-based financing perpetuates wealth inequity).
Educating entire populations takes many years. In the meanwhile, affirmative action has proven itself to be a reasonable short- and medium-term solution in the US. By giving minorities a slight edge—but only if they excel—affirmative action encourages and rewards excellence.
Quotas, on the other hand, do nothing to encourage excellence, and are in my opinion almost always a bad idea.
I don’t pretend to understand the situation in India, but I must point out that using the terms “affirmative action” and “quota system” interchangeably is incorrect and harmful.
1) First, because you don’t understand the situation in India, you don’t realize that they use the word quota explicitly and make no bones about it being a quota. In that sense at least they’re more refreshing than the transparent American subterfuges of “top 10%” programs.
You are totally incorrect. Any objective metric (SAT scores, GPAs, etc.) shows that it’s not a “tie breaker”, and that non-Asian minorities are admitted to college at far lower standards than whites and Asians. For example, at Michigan they had an explicit points system:
Now of course they’ve just driven that explicit points system underground with the latest Supreme Ruling.
But it’s not hard to show from reasoning similar to the pigeonhole principle that the vast majority of racial preference recipients (especially at elite universities) are underqualified relative to their peers. Consider
Even with recentering, you are not going to find too many above a 700V. You can estimate the exact number but it will not increase by a order of magnitude. You can now add up the black populations of Harvard, Stanford, MIT, etc. and compare to the reported SAT stats for their admits. Given that there are tens of thousands of students at these schools (UPenn + Cornell are especially big), and around 8-10% are black, you can calculate the degree of black overrepresentation. Repeat the process for Hispanics. I leave the exercise for the reader, or you can see here for a full calculation.
Bottom line: Racial preferences/AA are quotas in everything but the name. If you don’t get X % of blacks and Hispanics in your class or company, you get sued by the EEOC for disparate impact. So they are a de facto quota.
If this policy is extended to foreign companies, they too can simply shut down operations and move to another promising upstart such as South Africa, Russia, or the Phillippines.
Methinks you’re too optimistic here, KXB. All such operations will add dramatically to the cost of doing business. One of India’s biggest advantages is cheap quality manpower. Now they’re going to force companies to hire incompetents or else bribe officials, driving up the cost of manpower.
What a disaster.
Affirmative action favors a minority candidate only when two equally qualified persons apply for the same position. Those who wish to dismantle affirmative action here have (rather successfully) disseminated the false idea that it’s a quota system.
Bud – you’re correct to a point. Fed Law does NOT expressly require set asides / reservations. BUT, the problem is that affirmative action places the burden of proof upon the employer to prove that it did NOT discriminate AND in practice, judges / juries do use statistics as a priori proof of discrimination.
So, you run into situations where a company is accused of discrimination by an employer and his lawyer simply carps the line “women make up 50% of the population but only 5% of WalMart’s exec’s”.
Whether the Feds mandated a quota or not, Wal-Mart is now effectively being held to one with all the attendant, potentially devastating, costs.
I’ll freely grant the point that affirmative action is abused in the US. Michigan was probably the most egregious example; that system was struck down precisely because it flouted the intentions of affirmative action.
McWhorter’s famous only-184-over-700 statistic more than anything else offers strong evidence that non-Asian minorites don’t have equal access to education. This is the central problem.
It’s by no means the only problem, and I’m sure some of McWhorter’s assertions about black culture are correct. But as with the reservations system in India (I did understand it was explicitly a quota system, BTW), I’m an outsider and don’t feel it’s my place to criticize.
Racial inequity continues to be a major problem in the US, and should be a major concern to all Americans. Having large portions of a country’s population with little or no opportunities often leads to Very Bad Things (see Germany, 1930s or Saudi Arabia today).
Of course no preferential system can be perfect, or perfectly accepted. The disadvantaged will always game a system for all they can, and those whose bread is already well-buttered will oppose any such system.
We’ll all be better off when affirmative action and other corrective measures are no longer needed. Better ideas are always welcome. No one here has proposed any such better ideas.
Do you deny that any problem exists?
Bud, sorry if I came across more blunt than I intended. I just wrote it in an offhand way. but to consider your points…
The problem is the lack of meritocracy, not racism. South Asians, East Asians, and Jews are heavily overrepresented at the highest levels of academia/business/etc.
So yes, I deny that the “racism” issue is a legitimate one. Blacks and Hispanics do worse than whites on most socioeconomic stats. East and South Asians do better than whites on the same stats.
This is a non sequitur, for two reasons:
1) Jews in Weimar Germany were not poor – they were the richest and best educated segment of society and as overrepresented in academia, media, etc. they are in the US. In fact, the Nazis banned IQ tests because the Jews scored so well.
2) There is a big difference between having a poor minority that is left behind vs. actively exterminating a rich minority.
1) black Americans are fellow Americans. If I am to be criticized for my ostensible racism, saddled with taxes, and burdened with anti-Asian racial preferences, I am going to have some say in whether or not blacks have brought their troubles upon themselves or whether it’s really my fault.
2) In the case of India, if you’re doing business, it is very important to know what the climate over there is going to be like. If preferences are put into place in the private sector, the whole internet sector will go belly up as the cost of labor will rise dramatically. China will eat India’s lunch (they’re already doing that, but it will become a rout).
One last point: do you agree that racial preferences are de facto quotas, given the EEOC doctrine of disparate impact? If you can be sued on the basis of a numerical disparity, and if you can present evidence that the preferred candidates have lower qualifications (as cited above), then I think it’s actually a misrepresentation to call racial preferences anything other than de facto quotas.
In re: Germany, 1930s, I wasn’t speaking of the Jews, but of the vast numbers of unemployed ‘white’ Germans.
Meritocracy is a great idea, very similar I think to what the US founding fathers had in mind. Maybe it’s irrelevant to the discussion that when they proclaimed that “all men are created equal,” they implicitly referred only to white, land-owning males.
Then again, maybe it’s pefectly relevant.
Although we’d like to believe it is, “merit” isn’t entirely our own doing.
I believe the reason certain groups of people are “overrepresented at the highest levels of academia/business/etc” is that members of these groups have attended better schools, have received more financial support and have benefitted from better friend/family networks than have members of other groups.
Similarly, if deep-seated prejudices affect members of these groups at all, the effects are positive.
A good question to ask is whether such concerns are up to governments to solve. One’s answer depends largely on one’s position and on one’s belief system.
I don’t think the question of ‘fault’ is terribly important.
If for no other reason than pragmatism, I believe it is everybody’s problem that some of us are struggling. I believe working to create prosperity for all through truly equal opportunity (which I realize can never be perfect) will increase our economic power. I believe this, above all else, is what has made the US the world’s leading economic power.
As to your last point, maybe I am a bit naïve about the abuse of affirmative action. It wasn’t intended to be a quota system, and shouldn’t be one. Anyway, I’ve long believed that the best solutions to inequity need to be economically- rather than racially-based.
But then, I’ve never suffered from discrimination simply because of what I look like.
Maybe it’s irrelevant to the discussion that when they proclaimed that “all men are created equal,” they implicitly referred only to white, land-owning males. Then again, maybe it’s pefectly relevant.
Well, if we’re going to be bashing them for that, we should also point out that white males were the ones who came up with a democratic political system in the first place while much of the rest of the world was mired in autocracy. But that’s neither here nor there.
I believe the reason certain groups of people are “overrepresented at the highest levels of academia/business/etc” is that members of these groups have attended better schools, have received more financial support and have benefitted from better friend/family networks than have members of other groups.
I think that you are putting the cart before the horse. Look at the Vietnamese immigrants:
They came over with just the shirt on their backs while fleeing the Communist re-education camps. Yet they’re wealthier on average than whites today.
I should also note that many of the things you are stressing are rather right-of-center family value type things. There are societally useful functions to shaming single mothers and fathers who don’t marry their children’s mother, not least because they leave the rest of us to pick up the tab.
If for no other reason than pragmatism, I believe it is everybody’s problem that some of us are struggling. I believe working to create prosperity for all through truly equal opportunity
I don’t believe I should be responsible for someone else’s economic or academic failure, particularly if you deny me a say in what sort of behavior they should engage in to avoid those failures in the first place. A safety net? Ok, a minimal one, but make sure you stress individual responsibility and minimize the time on the public teat as a deterrent to making the net a hammock.
Moreover, making me responsible for someone else’s screwups penalizes me unfairly. It is easy to express such words and deny that the other person’s screwups were at all evitable…but when push comes to shove you are probably not going to voluntarily fork over your job or salary to someone else out of a desire for “truly equal opportunity”. That is the difference between expressed preference and actual preference.
The bottom line, though, is that “truly” equal opportunity can only come about by handicapping and taxing the competent. You will never make Michael Moore run as fast as Michael Johnson, but you can kneecap Michael Johnson so he’s as slow as Michael Moore.
The idea that people’s school and economic performance comes only from their environment and is totally a function of society is probably the root difference between you and me. I suggest you read The Blank Slate by MIT professor Stephen Pinker (also see here). It may change your views on this matter.
“The bottom line, though, is that “truly” equal opportunity can only come about by handicapping and taxing the competent. You will never make Michael Moore run as fast as Michael Johnson, but you can kneecap Michael Johnson so he’s as slow as Michael Moore.”
Forget about fast, I don’t think he can run at all.
Seriously speaking, the middle class is the key to a nation’s success. In the early 90’s the quota system was placed and many students did not get seats in colleges despite their advanced grades as a result. It was quite a tumultous period where students in protest actually burned themselves alive.
These were not ‘uppper middle class’ kids. They were students who were not of a Dalit or ‘BC’ class. Their parents were not rich, and since the Indian education system is so rigid in slotting people, without their Electrical Engineering or Medical school slots, these regular folks got screwed bad.
Instead of taking the right and long term approach of getting everyone well educated, to appease a segment of the population such quotas are placed. As previously mentioned, such temporary programs become permanent and people believe they are entitled these benefits.
Forcing the private sector into a quota system is simply wrong. Discrimination does exist for lower caste folks, but instead of giving them the tools to empower themselves, we are stripping away the prosperous. The discrimination needs to be dealt with education, enforcement of law, and with common sense laws. None of these exist to provide fundamental support to help the disenfranchised.
Interesting discussion on reservations in india. In states like Andhra pradesh, even to get into engineering or medical professional schools, despite giving an entrance exam to proove your merit, you still need to go through reservations. 25% seats are for BC’s, 15% seats for sc’s and another 6% for ST castes and then 33% of the seats are for girls. If you are a girl , you have a special advantage as 33% of the seats are reserved for girls, u will surely get an admission even if you score less in the entrance exam compared to guys. So for guys who have merit and who score better than girls, its a big disadvantage and they cannot get into professional courses because of reservations. So much so that now a days most of the girls in AP are engineers or doctors while the guys do not have professional degrees.check this site out. http://www.apcolleges.com/cetinfo/eamcet_reserv.html The same reservations apply for jobs too at most places. Government should encourage low income or low class/caste groups by providing them better oppurtunities to earn or better oppurtunities to educate themselves. But too many reservation quota’s hurt people with real merit and talent. Considering India has a lot of rural poor population, income based reservations would be better than caste based reservations specially WRT to jobs, though ideally merit based admissions into jobs and professional schools would be great for india’s economic growth.