Capital democracy, laugh if you must!

by Chandra Bhan Prasad

The stunned TV anchor had laughed. In a panel discussion on DD1, during the last Lok Sabha elections, Kanshi Ram was asked about his political agenda. He said, "We want to create social democracy in India."

The anchor, now hosting a programme on BBC World, could not believe what Kanshi Ram was saying, and he laughed. Kanshi only smiled at his host's ignorance who, when it comes to commenting on Indian politics, seems to be a school drop-out attempting to sneak into a laboratory of the physical sciences. But he nevertheless, does make political commentaries. To be an anchor on TV or the editor of a newspaper in India, what one needs is to be born into the "correct" community, a "correct" accent and the "correct" connections.

The anchor, like most Varna intellectuals, refuses to read Ambedkar, and hence, perpetuates his ignorance of the Dalit world. According to Dr Ambedkar, "Democracy is essentially a form of society, and not a form of government. Political democracy pre-supposes a democratic form of society." Dr Ambedkar's theory of social democracy, outlined 57 years ago, is more relevant today than when it was in 1943. Today's political instability is more a part of the anti-democratic character of India's social organisation than anything else.

Both arms of the order - Left and Right - are at liberty to laugh, and must laugh if they can, at the notion of "democratising capital". But the notion has come into being and is being practiced. Not here but in the United States of America. Yes, the same America, dreamland of our myriad netizens who spend hours and days on the Net, but do not tell this country that in "their" dreamland, "their" White brethren in the US have come up with this wonderful notion - that American capital, largely controlled by White society, lacks in democracy as the Blacks and other ethnic minorities have had very little access to it and that, by sharing it with them, it can be and it must be democratised.

In this on-going series, we are trying to understand how White society in the US has, of late, decided to share American assets and institutions with the Blacks. In India, too, the Dalits have virtually no access to capital, they stand nowhere in our industry, trade and commerce. The US Government, in its site,, confesses that: "empirical evidence demonstrates that there is a disparity in credit accessibility among certain demographic groups". It further stresses: "evidence also shows that minorities are more often denied credit, and pay higher rates for credit, than do White business owners." The paper gives a graphic description of the "great divide,' in terms of access to capital and the prejudices of White society.

The Federal Government, keeping in mind the battles the Blacks and others have been waging, and also the call of their own conscience, theorises that: "the future of the nation's economic growth depends upon the inclusion of minority-owned business. And access to capital for minority-owned firms is absolutely essential for the healthy development of this growing sector of American business".

What are the corrective methods the US government has taken? Believe it or not, it is quite simply, fantastic! Consider the following: the US government, like any government in any part of the world, buys from private suppliers to help run state machinery. Total expenditure, on this count, came to US$ 195 billion in 1998. Of this, purchases worth US$ 11.3 billion, or 5.5 per cent of the total, were made from black and other ethnic suppliers. This means, several thousand Black/ethnic suppliers turn into millionaires.

In 1977, the US government enacted a legislation called the "Community Reinvestment Act" (CRA) making it for banks and other financial institutions to cater to the credit requirements of "underserved" (read underprivileged) groups, including lending to the elderly, inhabitants of central city areas (areas inhabited by Blacks) and to small businesses. So for, a trillion dollars have been invested or lent out to "underserved" communities. These are only a few examples. There is an entire host of initiatives, institutions and policy packages to help boost Black/ethnic business. And the impact?

Black/ethnic minority-owned business registered a growth rate of 17 per cent between 1987 and 1997, six times higher than business, as a whole, in America. Further, sales for all firms rose by 13 per cent annually, for Black/ethnic minority-owned firms, sales rose by 34 per cent, more than twice the national average. Till about two decades ago, Black/other ethnic groups were considered "incompetent" in the running of a business, but they are now surpassing the Whites. This is the wonder reservations in business does in America! What lessons can India learn? If the government in India reserves five per cent of its purchases for Dalit suppliers, in less than a decade there would be a host of Dalit millionaires. But, like society, capital too remains un-democratic in India!

Referred by:Dr. K.P. Singh
Published on: February 14, 2001
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