Friday, March 29, 2013

Capitalism and Social Discrimination

Dear All,

Both, capitalism and socialism are vulnerable to social
discrimination, but the operating mechanism differs. Under market
economies, I have noticed that the following
1. Inefficient Markets
In inequal economies, discrimination operates through demand and
supply. Essentially sellers from discriminated communities get bad
pricing for their products/services. Their products/services are
bought by the "market", if similar products/services are not
available
at good price or volume through vendors from other communities. Of
course, in extreme cases in India, markets themselves can be
segmented, since customers themselves are segmented. In fact,
parallel
economies can exist in some regions with inter-linkages controlled
by
the non-discriminated communities.
2. Supply chain discrimination
Supply chain units closer to the markets are hard to discriminate
against, if markets are efficient. But for those further down the
supply chain, dog-in-the-manger type approaches by those ahead of
them
in the supply chain are not uncommon. Another technique is to take
innovation value and create competition through tying up with other
suppliers from own community. These new suppliers are then given the
the knowledge taken/stolen from the discriminated community. This is
espescially true in those business areas, where the intellectual
property rights are more important then the non-intellectual
property
rights in the generation of business value through some
product/service.
3. Labour market discrimination
Labour market discrimination is too common and is reasonably well
understood. Essentially those without recourse are exploited by
paying
them less and giving them poor working conditions by threatening
them
with changes in production technique and/or usage of labour from
cheaper areas. Of course paying, promoting, rewarding differentially
for same work is also very common.
4. Capital market discrimination
While the essential theme remains same. Access to capital still
remains the source of all ills. One would expect that capital would
always flow to those people, who can use it better. This is true, if
such people are aware and active. But subjugated and exploited
communities are structually unable to separate themselves from their
day to day realities and take on the risk of gestation periods in
positive NPV projects. So they end up selling their thoughts, words
and actions to enable their selves to survive. In fact they tend to
lose shame and prefer to stay entombed in their miseries, since
their
histories have taught them that resistance is futile. They lose
moral
strength and "karma-rebirth" theory also encourages passive learned
helplessness and ritual action. It is only by increasing their moral
strengths, that they might be able to start with small enterprises
initially. Dhamma is one tool to stop the learned helplessness and
increase self-reliance.
In each of the above, the pre-existing social networks of the
involved
individuals is a key factor. The exact nature of a node and the
exact
nature of the relationship between two nodes may vary.
If political, economic and social democracy are viewed through the
lens of such a social network analysis, it is easy to understand
why "political democracy is a farce without social and economic
democracy".
Regards
Pratap
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