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Reservation and free markets

(in reply to Puneet)

Affirmative action in USA (similar to reservations in India) has been
found by the Supreme Court to be compatible with Title VII of the Civil
Rights Act that sets a general nondiscrimination standard. California
recently repealed affirmative action through a referendum but I believe
it has got stuck with the Federal govt. 

Equality of opportunity is the underlying principle behind affirmative
action. Private companies have been encouraged to train people who are
from disadvantaged communities leading to the increase, for example, in
the case of Kaiser Aluminium and chemical Corporation, of black workers
on the shop floor from 2% to 39% in the 1970s. Much of this was provoked
by collective bargaining and political action on a case by case basis
rather than by mandate as in India.  [see Ehrenberg and Smith: Modern
Labor Economics]

The fact is that there is this hugely untapped brain power of the
'backward' classes in India which needs to be tapped in order to enhance
social productivity. You and I and everyone would gain enormously from
the use of this untapped talent. But talent per se is meaningless unless
it is polished and made usable.

Therefore I would support individual political action on a case by case
basis by labor unions and political groups to ensure that the
downtrodden get better training and better educational access than they
get now. However, the governmental reservation system is best phased out
- as proposed about 8 mths ago on this list by me.

This is essentially a social reform issue and economics does not have
much to say on this. The only thing that 'free market' thinking would
recommend is that we need to get the BEST possible productivity for
India while ensuring that everyone gets the essential human rights. I
don't see much other 'guidance' from economics on this issue. Maybe
others who have thought more on this can comment. 

Let me assure you that this is a hotly debated topic even in the USA
where the terrible history of slavery parallels in a way the terrible
oppression of the Harijans in many parts of India (even today). This
topic does not have very obvious solutions: we need to keep our
sensitivities open.


On Thu, 26 Nov 1998, Puneet Singh, wrote:

> Hi everyone,
> What is the group's stance on reservation?
> Is it required? For how long? For whom?
> Based on caste? Religion?  Sex? Income? Region? State?
> Is it a local government or national policy? Can it be enforced on
> state
> firms? Private firms? Should it be?
> Are there studies, results showing how reservation policies may have
> influenced/ hampered growth?
> Is reservation at conflict with "free market"?
> If provided, how do we ensure it goes to the needful? What tracking
> systems are in place?
> If refused, how do we explain to those currently benefitting from it
> that it is for the good of the overall society?
> Thanks,
> Puneet

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