Baniya Capital Is Not Mercantile Capital: An Extract from Kancha Ilaiah Shepherd’s “Post-Hindu India”

08 October, 2017

In mid September, members of the Arya Vysya community in Telangana and Andhra Pradesh began holding protests against the work of the academic and writer Kancha Ilaiah Shepherd. The nature of the protests was vigorous: while some Arya Vysyas ambushed Shepherd’s car and pelted stones at it, others burnt effigies in his likeness. On 18 September, during a meeting of an Arya Vysya organisation, TG Venkatesh, a member of parliament from the Telegu Desam Party, said that Shepherd was a “traitor” who deserved to be “hanged.” Shepherd registered a complaint with the police, saying that he feared for his life, and confined himself to house arrest until early October.

The Arya Vysyas, also referred to as Kommatis, and understood to be an upper-caste Vaishya group, had taken grave offence to the contents of a short Telugu-language book, Samajika Smugglerlu: Kommatullu, or “Social Smugglers: Kommatis.” The Telugu book is an adapted extract from Shepherd’s book Post-Hindu India, which was published in 2009. The Samijika Smugglerlu argues that the Baniya community—often referred to as Vaishya, the term from which the Arya Vysyas derive their name—has maintained a monopoly over business in India, and excluded Shudra, Dalit and Bahujan groups from the benefits of capital growth in the country. An interview with Shepherd, in which he discusses “social smuggling,” can be read here.

In the introduction to Post-Hindu India, Shepherd writes that the book covers “Dalit-Bahujan cultural, scientific and economic knowledge systems, analyses their overall relationships with each other and also with the Hindu religion as a spiritual system.” In addition to the chapter on the Vaishya community, the book contains individual chapters on various communities residing in India, and, based on their traditional occupations and knowledge systems, analyses the development of the Indian economic structure. It theorises that the Hindu religion’s failure to reckon with the evils of caste oppression will lead to its demise. Shepherd writes: “If a religion does not have the inner strength to gradually move towards institutionalising the spiritual democratic course of equality and transformation within its inner structures, it is bound to fade away.” 

The following is an extract from “Social Smugglers,” the chapter from Post-Hindu India whose adaptation became the focus of Arya Vysya anger. In it, Shephard argues that, unlike in the West, industrialisation in India did not promote social mobility, as capital was made inaccessible to Shudras, Dalits and Adivasis.

In the European context, the children of the servants and also of vagabonds entered into business, which, in their context, was based more on individual entrepreneurship rather than on communitarian or caste entrepreneurship. Since the feudal lords looked down upon the business activity, the youth from the rest of the civil society found an opportunity to start businesses on competitive basis. The spiritual society did not impose any restrictions on the process of business enterprise.

In India, the social process of the emergence of business took place on altogether different lines. The caste system constructed social blocks to the process of free enterprise. The Hindu religion intervened and assigned even the process of business to a community called Vaishyas. In ancient India, the pre-business Baniyas called the Vaishyas in the Hindu texts were characterised as field supervisors. Later on, with the sanction of the Hindu texts, they were promoted as exclusive traders. It was done by drawing spiritual boundaries around the Baniyas as well as other communities and by denying rights to handle the trade economy to other communities.

The Hindu religion sanctioned exclusive rights to some communities and assigned exclusive duties to other communities. The Brahmins sanctioned to their own selves an exclusive right to deal with divine agencies and they also sanctioned an exclusive right over business to the Baniyas. The Brahmins did this while sanctioning themselves the exclusive right to draw upon that wealth through spiritual means. With this contract between the Brahmins and the Baniyas, they too were sanctioned the spiritual right of dwija-hood. In this contract the other communities were never a party. With the emergence of a dwija Baniya caste, who agreed to be their spiritual subordinates, the Brahmans acquired a permanent base of social wealth for their human and spiritual consumption of national wealth and resources.

One of the socially accepted laws of the European “Christian feudalism” was that the business of the feudal economy was supposed to have a system of open transactions. The class-based social structures allowed social mobility within the market. The most important thing in the whole process of business was that the price structure was based, to some extent, on the labour power consumed for the preparation of the commodity. Though Marx said that the labour power utilised in the making of the product was never taken into consideration by the bourgeoisie, labour power was taken into consideration to some extent in all class societies. In caste-based systems, however, labour power expended by the labour force has no social respect at all. When labour does not have any dignity in the society, its economic value becomes a lot cheaper.

In a class economy, the social position of the buyers and the sellers could change—in other words, an erstwhile businessman could change his position to become a labourer, and a labourer could become a buyer of labour or a businessman. The availability of a mobile social structure changed the economic position of the people. This social mobility also framed the terms of business in a different way. The buyer and the seller in non-Baniya markets are equally respected social beings. The Baniya business of India differs entirely as it is structured in caste terms, with an in-built immobile social system conditioned by the Hindu scriptures. Legally and structurally, only the Baniyas could operate business. Of course, the Brahmins did possess a right to operate businesses as well, but that right was considered to be below their spiritual status by the Brahmins themselves.

This kind of closed Baniya business disallowed any social basis to institutionalise the mercantile capital in India. The Baniya mode of business and accumulation of capital negated the formation of a socially useful capital. A Baniya, by definition, is not an entrepreneur but one who squeezes money from his buyers, whose social interest is in accumulation of capital for self-perpetuation and spending it on the so-called self-salvational spiritual processes of Hinduism that only served to dehumanise them even further. Huge amounts of money, thus, were invested in temples and also on the day-to-day consumption of the priestly class, but not in the generation of socially useful wealth.

Perhaps no other religion in the world has wasted so much food as much as the Hindu religion has. The Baniya accumulation was—or is—the main source of such wastage of food resources. A large amount of the Baniya business capital has been wasted on yagas and yagyas instead of on human consumption. Guptadhana does not contribute to the strength of the society—socially distributed wealth alone possesses the capacity to become the strength of a society.

Because of [the] caste-centred nature of capital, the wealth accumulated by the Baniyas did not become the base of industrial capital in India. Industry, essentially, is an anti-caste institution. It pushes society into urbanisation; it brings anti-caste institutions like hotels, cinema halls and other institutions into existence. In the nineteenth century, when the British were pushing the Indian economy towards industrialisation and urbanisation, the Brahmins and Baniyas of India were strongly against such a process. The Baniya economy was opposed to industrialisation in the same way as the Brahmin spirituality was opposed to the education of the Dalit–Bahujan masses and women.

The twin processes of opening up education to the Dalit–Bahujans masses and investing in industries were accepted by the Brahmins and the Baniyas only when they worked out ways to keep these institutions caste-centered. Slowly, when the Baniyas started the textile industry, they did not employ Shudras and Chandalas in them. Though gradually employment was given to the Shudras, at no stage were Dalits employed in Baniya-owned shops and factories. This was one of the main arguments of Ambedkar when the question of supporting the working-class strike, lead by a Brahmin communist, Dange, came up for discussion. Surprisingly, the Brahmin communist also thought that Ambedkar’s demand for respectable employment of Dalits was not an acceptable demand.

The mercantile capital that evolved into industrial capital in Europe broke all social barriers. But the Baniya capital in India sustained caste inequality as the Brahmins wanted them to move in that direction. In this atmosphere, if the British had not established their own industries where all castes were allowed to take up jobs, we would not have had even that slow growth of urbanisation in India. In a historically caste-centred closed economy, an indigenous development of industrialisation and urbanisation would have been impossible.

Baniya business stood as a barrier to industrialisation because it was inaccessible to the public sphere—capitalism could not have developed in India unless there had been social interaction between labour and capital. The British made an attempt to bring about some sort of social exchange by establishing factories wherein labour and capital could interact without considering the caste basis of the labour. In the Hindu social order, labour was always located among the Dalit–Bahujans and capital in the Baniya families. When the labouring section of the society wanted to educate their children in the same school as the capital-owners, they were met with stiff resistance from the Brahmins and the Baniyas, as that would lead to a revolutionary change in the system.

This is an extract from Post-Hindu India: A Discourse in Dalit-Bahujan, Socio-Spiritual and Scientific Revolution, by Kancha Ilaiah Shepherd, published by SAGE Publications India (340 pages, Rs 499). The extract has been edited and condensed.