What did you find interesting or uninteresting about the piece? Was there something that seemed intuitive or counterintuitive? Explain.
Any time there exists a hierarchy of people in a specific location, the economic market in that locale will be affected. Because only the top-tier people were permitted to consume lavish items, the inferior classes couldn't have a demand for such products. The fact that the lower class's quantity demanded for luxurious items was impressed upon them by the structure of the caste system was particularly interesting. Coupled with the fact that they couldn't afford these opulent goods, the order arrangement of people impressed upon them that they didn't want these luxuries either. It was against the system, and almost sinful, to consume goods reserved for the higher class if you belonged to an inferior one. This reduced the quantity demanded of these lavish products down to nothing. The caste system skews the market, and futzes with the idea that prices are indicators. They hold little valid information once what one can purchase or consume is restricted.
Discussion Questions
Only the inferior classes can do manufacturing or manual work. How does securing the upper class's leisure affect the natural job churn cycle of the market? How would technological innovations affect the lower tier jobs?
Although it's not really conveyed in this piece, India's caste system wasn't designed to hurt the poorer people. In fact, the upper classes have an obligation to take care of and look out for those in the lower classes. America doesn't have an official caste system, but we do have levels of income that determine how much luxury we consume. Do you think Americans look out for people of lower income levels. Why or why not? Is it simply a result of capitalism? Explain.
Annotation
This piece illustrates the detrimental effects of protectionism on the poor. It tends to hurt them much more than it helps them. Within the leisure class example, the poorer people were locked into manual labor-type jobs. Technically speaking, they have a relatively high job security because they will always have to serve the upper classes, but they aren't permitted to act on their own self-interest at all. This has a large impact on the market because it exacerbates the information problem since prices are no longer an accurate indicator.
On your last point, look up occupational licensing and let me know what you think. If you don't get a good grasp on the term and its implications I will provide one. Of course, once you understand the term and what it is, we can analyze its impacts, and ask who it is impacting detrimentally. I don't think you'll be surprised when you hear the answer.
ReplyDelete