Towards a Worldwide Index of Human Freedom

202 • Towards a Worldwide Index of Human Freedom
deviation from traditional caste duties might magically hurt even the reincarnation
prospects of fellow caste members, it has usually been punished.
Lower castes have frequently resorted to excommunication. Certainly, the
caste system has made upward mobility by economic success less likely in
India than either in China or Europe. Religious constraints on economic
freedom had to interfere with profit-maximization and economic growth.
In particular, entrepreneurship was much more accessible to members of
the traditional trading castes than to others. While their members enjoyed
superior access to opportunity, most Indians did not.17
Economic backwardness in India and elsewhere is sometimes
explained by colonial exploitation. There is no doubt that exploitation
has happened, but exploitation does not usually lead to development in
the exploiting countries. Iberian rule over Latin America illustrates this
point. It helped neither Spain nor Portugal to develop. Moreover, ruling
classes other than Western colonialists have exploited their subjects, too.
Maddison provides a quantitative estimate of the exploitation of India by
the Mughals and their British successors: “The income which the Mughal
elite, native princes, and zamindars managed to squeeze from the rural
population was proportionately quite large. It amounted to about 15 percent
of national income … But, by the end of British rule, the successors
of the old elite got only 3 percent” (2007: 123).
In sum, the rise of the West and the stagnation of China or India can
be explained by divergent institutional developments. In the West, political
fragmentation and competition forced even autocratic (or “absolutist”)
rulers to respect the private property rights of producers and traders
much earlier and to a greater degree than Asian rulers did. Because of
better exit opportunities for common people, there was more economic
freedom in the West than in Asia. Without economic freedom, incentives
for hard work suffer. Political fragmentation in the West also contributed
to scarcity prices and a rational allocation of resources as well as
to decentralized decision-making and the application of knowledge that
is dispersed among millions of heads.
Socialism in Asia
Although Europeans invented socialism, i.e., a program to roll back
economic freedom, the West suffered much less from it than did Asia.
From the 1950s to 1980, per capita incomes in China and India were fairly
improve their status by leading a “purer” form of life. If this implies giving up dirty work,
Sanskritization may reinforce poverty.
17 According to the 1931 census in British India, trading castes, like the Baniya, had much
higher literacy rates than even the higher-ranking Brahmins. Obviously, literacy is useful
in business (Wolcott, 2010: 463).
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