Use India’s social capital for economic development
Social capital is the product of the network of relationships that exist among people. It enables societies to function smoothly. It is not visible like other assets. But it is critical to the functioning of the societies, and the economies.
Relationships remained the basis of life in the traditional societies. The modern western approaches have resulted in encouraging unfettered individualism, leading to the destruction of natural relationships. Harvard economist Stephen Marglin argues that the western economic theories of the past few centuries have resulted in destroying relationships, leading ultimately to the destruction of the close knit community networks.
Studies of the noted political scientist and Harvard Professor Robert Putnam show as to how close relationships have been declining in the United States over the past decades. When the relationships decline, the result is the loss of social capital. In his Bowling Alone: The Collapse and Revival of American Community published in 2000, he measured the decline of social capital with different sets of data to show that many of the traditional civic, social and fraternal organizations — such as the bowling leagues — had undergone a massive decline in membership, even when the number of people bowling had increased.
Different studies establish that many of the developed and the western parts of the world have been witnessing steady erosion of social capital. The situation is particularly alarming in countries such as the United States and the United Kingdom. It is important to note that their academic system, establishment and the intellectual circles have all played a role in it leading to the present situation.
As a result, they are facing serious problems on several fronts. We have to understand that social capital is not just about personal kinships, friendly groups and close contacts alone. It is the relationships that determine the behaviour and course of actions in the social, cultural and economic fields of different groups. In fact the nature and direction in the movement of different societies are influenced by the approaches, attitudes and behaviour of people among themselves and towards others.
India, by nature, is a relationship oriented society. The lives of Indians revolves around the network of families, friendships and a whole lot of contacts. The family networks and kinships go on expanding and are the products of relationships accumulated over many generations. Besides, the Indian tradition treats even strangers as their own. As a result, Indians may perhaps be the people with the largest number of relations and contacts in the world.
The relationship base of our people is helping India in many ways. Maintaining peace and order at different levels in the society becomes easy. Villages and localities continue to be largely managed by the local communities without any need for much help from the state. This is especially true in the traditional societies that continue to keep their interdependent ways of life intact.
In different parts of Arunachal Pradesh the entire population of the villages assemble on specific days and take up all the common activities together. It may be laying of roads, constructing places of worship or other village related works. Besides, on all important occasions in families, everyone in the village takes part. There is a complete community orientation in all their family and social activities. With the result, no one is allowed to feel as an individual. Each one of them is a part of the village, with his/her own role.
In the coastal regions of northern part of Tamil Nadu spread over different districts, the life style and functioning of the pattinavar community of fishermen are organised around their villages and the close knit society. All decisions concerning the villages are taken by them in their regular meetings and executed by their representatives chosen unanimously by the respective villagers. In all important matters relating to the families, the elders and the community leaders are involved. As a result, the society functions as a coherent unit without much disputes and rivalries. Hence there is a little requirement for the law enforcing agencies of the state. If anyone faces personal difficulties or financial problems, the entire village supports him/her.
Even in the main lands, there are huge social and community mechanisms working at different levels in our country. Such arrangements exist not just within specific communities, but also between the different communities of diverse backgrounds. These native mechanisms help keeping the functioning of our villages and towns less acrimonious, enabling people to lead peaceful lives.
Social capital plays a very important role in economic and business transactions, paving way for development of the economy. The growth of Indian economy over the years after independence, has been facilitated by the relationship base of the Indian societies. The family and social relationships enable entrepreneurs to mobilise savings easily and get all the possible support of others around them in their pursuits.
Studies reveal that most of the funds required for investments in the initial stages for entrepreneurial activities are raised from close sources, based on relationships in different parts of the country. Besides, the local communities evolve their own methods of raising funds using relationships. Mahamai in southern Tamil Nadu was a novel method developed by the local community when they realised the need for funds to promote own initiatives. Ultimately it has transformed them as one of the very vibrant business communities in the country, by making them the dominant players in different fields such as cracker manufacturing, match industry and retail trade at the national and regional levels.
We all know that one of the main reasons for the success of traditional business communities such as Marwaris is their close knit relationship base. The same holds good for the new business communities that have emerged successful over the past few decades after independence. It is acknowledged that the close knit relationship base of Patels have played a critical role to make them emerge as dominant players in the global diamond industry and the US motel industry.
The Indian society is built on an inclusive approach. Hence people from different backgrounds are naturally accepted as one among them, especially in business related activities. This is the reason why one could see people of diverse shades, irrespective of their linguistic, regional and even religious backgrounds engaged in different businesses working closely with all others in different parts of the country.
Social capital enables faster economic progress in many ways. Closer coordination, faith and goodwill based approaches, lesser transaction costs and speedy movements are possible when there is mutual relationship among the transacting parties.
Hence the strong social capital prevailing in the country should be used for the faster development of the economy. Suitable policies have to be devised for this purpose. Here more emphasize need to be given for the development of those sections who are yet to move up in the ladder.
1. Stephen Marglin, Dismal Science: How thinking like an economist undermines communities, Oxford University Press, New Delhi, 2008
2. Robert Putnam, Bowling Alone: The collapse and revival of American community, Simon and Schuster, 2001
( Yuva Bharathi, Vivekananda Kendra, Chennai, Jan. 2015)