Harish Damodaran’s “India’s New Capitalists: Caste, Business, and Industry in a Modern Nation” is a modern classic. I finally read it this week. Here is a TLDR from a farmer and engineer’s perspective.

The farming communities in the South, especially Kamma, Reddy from P/Telangana, and Naidus and Grounders from Coimbatore, have done exceptionally well. One of the main reasons is the “Bania vacuum” of the South. Compared to my native Western UP, where all Sugar mills and daily newspapers are owned by the Banias, the AP and Telangana factories and newspapers are owned mainly by farmers. They control their interests. I wonder why we don’t see farmers’ protests in the South.

Farmers haven’t succeeded much in the North due to the stronghold of traditional mercantile classes. However, cooperatives in Maharashtra and Gujerat have provided stepping stones. The cooperative has never succeeded in Punjab, Haryana, and Western UP; the ability to break into traditional social networks and access capital is thus highly restricted.

The book also summarizes the historical evolution of traditional mercantile classes at the port cities. Parsis need to start thinking about the harmful effects of inbreeding! You can read about this in other reviews.

A few minor annoyances: names of caste and community are thrown at the reader rapidly, and you may be unable to keep up. There is only one table in over 350 pages! The book also shies away (perhaps for good) from discussing the adverse effects, explicit and hidden, such as nepotism, corruption, promotion of undemocratic values, and eventual decay associated with social networks and community bonds.

This book was published in 2008, and I hope the author or someone else writes another one soon. The technology sector is now very well established and, like sports and politics, provides much better mobility to talent. I won’t be surprised if the South has a substantial advantage over the North. The rich folks and governments in the North have never invested in community school education like their counterpart in the South. No wonder they are voting with their feet to come to the South.