The Wall Street Journal, New York
The Indian left's caste-related justifications for state intervention are dying.
The plight of the Dalits, those whom the Hindu caste system considers outcastes and hence Untouchables, was a rallying cry of Hindu reformers and Indian leftists for half a century. But today these victims of the caste system are finding that free markets and development bring advancement faster than government programs.
Historically, Dalits were left to do the most undignified work in society, and were denied education or job opportunities. After independence, not only was legal recognition of caste abolished, but Delhi also created affirmative action and welfare programs. Intellectuals who fought for the betterment of Dalits worked together with leftists to pass laws righting historical wrongs.
That alliance is now breaking down. India's economic reforms have unleashed enormous opportunities to elevate Dalits—materially and socially. In research published last year, Devesh Kapur at the University of Pennsylvania and others show this transformation occurring in Uttar Pradesh state in the north, a region notorious for clinging to caste traditions.
Mr. Kapur found that Dalits now buy TVs, mobile phones and other goods very easily—at rates similar to any other caste; they have also been spending more money on family weddings. These factors and others point to practical benefits Untouchables receive from growth, the same benefits accruing to other Indians. There are more such cases in the south and west of the country.
More economic choices are changing Dalits' own expectations and, in turn, changing social structures for the better. Dalits may have seats reserved for them in public schools, but parents now prefer to send their children to private schools. Urbanization is one trend hugely in favor of those thought to be Untouchables in the village economy. Commerce in cities doesn't discriminate.
Dalits have also launched campaigns promoting the use of English, which has both helped them earn higher incomes and more dignity in society. One Dalit intellectual, Chandrabhan Prasad, thinks his community should worship "English" as a goddess.
This has the left, with its belief that only the modern state can repair social ills, in a quandary. One refrain common among Indian leftists is that 20 years of economic reform have benefited upper castes and left those at the bottom of this hierarchy worse off. But Dalits clearly don't agree.
Dalits pay tribute to a portrait of their leader, B.R. Ambedkar.
The only remaining argument for the Dalit cause to stay intertwined with statism is the fact that the Untouchables' most respected leader, B.R. Ambedkar, supported affirmative-action laws. Because of this, he was long believed to have leftist leanings.
However, 50 years later, my research shows that Ambedkar was, in fact, one of the biggest proponents of classical liberalism in India's 20th century history—not some proto-Marxist, as some have made him out to be. Last month's 120th anniversary of his birth is a chance to reflect on how liberalization has helped and can further help Dalits.
It's true that the Dalit leader often spoke in favor of affirmative-action measures for Dalits and, as the architect of India's constitution, put some of these measures into the law. For instance, he feared that without a reservation provision for education, Dalits would not achieve social equality and freedom.
Seeing their leader support state intervention, Dalit intellectuals embraced Marxism. Mr. Prasad, a Marxist-turned-free-marketeer, notes, "The idea of Communism . . . seeped into the Dalit consciousness. Many claiming to be ardent Ambedkarites, including myself for a decade, spoke the Marxist language. A great amount of Dalits' intellectual energy, time and resources was invested in Marxism." That boosted India's broader left movement.
But this whitewashes Ambedkar's true legacy. Some economists and historians have pointed out that Ambedkar was no Marxist. My own research indicates that this man, born an Untouchable in 1891, anticipated a lot of what classical liberals like F.A. Hayek later said.
In the 1920s, Ambedkar was an early advocate of property rights. He also opposed central planning, writing as early as 1917 that it "must lead to inefficiency." Under the 1950 constitution that he drafted, not only was there little hint of Soviet-style planning, but the right to property was enshrined as a "fundamental right"—the highest and most easily enforceable of civil rights in India's legal framework. Politicians later amended the constitution to enable economic engineering.
Ambedkar was also one of few Indians to think seriously about monetary matters. He has left behind writings from the 1920s supporting the gold standard. Like the Austrian School of Economics after him, he defended private banks' ability to issue competing currencies and decried the state's monopoly over legal tender.
Ambedkar may have supported reserving seats for Dalits in public education, but he actually favored a review of the provision after a decade, so as to not make it permanent. All this was forgotten after his death in 1956.
It's important to tell the real story about Ambedkar. For one thing, it could further invigorate the Dalit community in favor of free-market ideas. His influence among Dalits remains unparalleled to this day. That, in turn, will undermine the linkage of the caste system to leftist ideas. Policy makers often invoke freedom fighters and founding fathers for their cause. Ambedkar should no longer be a pretext for statist policies.
Reform-minded policy makers can press Ambedkar's insights into service, though. In contrast to leaders who reckoned the English language was imperialist, Ambedkar once called English the "milk of lionesses." Unlike Mohandas Gandhi, who saw the village as the basis for economic activity, Ambedkar considered the "individual" to be the ultimate economic unit.
Ambedkar isn't the only classical liberal in modern India's history; nor is caste the only pretext for leftism. But if someone as influential as Ambedkar believed that classical liberal ideas could help India's most downtrodden, and if these ideas are starting to help in practice, then the political case for them only becomes stronger.
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