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The Grammar of CasteEconomic Discrimination in Contemporary India$
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Ashwani Deshpande

Print publication date: 2011

Print ISBN-13: 9780198072034

Published to Oxford Scholarship Online: September 2012

DOI: 10.1093/acprof:oso/9780198072034.001.0001

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Theories of Discrimination and Caste

Theories of Discrimination and Caste

(p.19) 2 Theories of Discrimination and Caste
The Grammar of Caste

Ashwani Deshpande

Oxford University Press

This chapter critically analyses the few economic theories that specifically investigate how social identity can impact economic outcomes and why we might encounter discrimination in market settings. The unfortunate but hard reality all over the world is that identities do matter, and significantly so. This chapter presents those economic theories, incidentally put forth within the neo-classical framework, which bring home the fact that discrimination is perfectly compatible with market orientation and profit maximization, and that models based on discriminating agents also reach an equilibrium, albeit a different and sub-optimal (that is, not Pareto optimal) one, as compared to the equilibrium in an economy with no discrimination. Most importantly, these theories provide a motivation about why ‘rational’ economic agents might discriminate.

Keywords:   economic theory, social identity, discrimination, economic outcomes, neo-classical framework, caste inequality, race, Jotirao Phule, B.R. Ambedkar, social mobility, patronage, caste economy

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