Reckless Stereotyping

September 13, 2007

Marwaris become wholesale traders. Of steel. Or generic pharmaceuticals or cement or pretty much any commodity. Send their kids to a local Maadoo school and then a local Maadoo B. Com. college. The sons join the family business. The daughters are married off. The family’s black money goes as dowry and becomes an unsecured loan to the son-in-law’s family business. Which also trades the same commodity.

Punjabis set up garment export units. Send the sons to do a BBA in Australia. Send the daughters to NIFT. Both come back and run the family business. Then the daughter gets married and sets up her own business with her sister-in-law. The daughter’s family provides more seed capital than the sister-in-law’s.

So it goes.

Dowry – Finis

May 5, 2007

Time to wrap up the hugely procrastinated dowry series.

I’ve defended dowry as a good and useful financial tool. The main argument against this (pointed out by Ritwik) is that dowry is still indefensible- especially because in UP and Bihar dowry will not be used by entrepreneurial sons-in-law as capital and it will drive girls’ parents into bankruptcy.

My instinctive response to this would be: ‘So? There are so many cases in which dowry is used as enterprise capital and doesn’t ruin the girl’s family? Why should those families be classified as criminals?’

The problem with the instinctive response is that I have no real numbers on how many families take dowry and don’t ruin their in-laws. So it’s all mute conjecture. I would love it if there was data, but for now I’ll have to stick to theorising.

Ritwik also points out that while harassment and dowry deaths can be dealt with under existing laws, having a specific anti-dowry law and a special anti-dowry cell empowers people to go and complain about harassment and be more effective.

I think this point is arbit. If laws on murder and extortion are ineffective, that’s an argument for reforming the police and courts, not to throw in a new law specifically on dowry. Also, criminalising dowry gives a weapon to girls’ families when a marriage turns acrimonious, even if no dowry was involved or dowry was given willingly. (My own family has been a victim of this, so perhaps I am losing some objectivity here.)

One final point, on defining dowry and whether it is a voluntary transfer of wealth or not.

Consider the following examples:

  1. The father-in-law hands over a suitcase of currency notes to the son-in-law.
  2. The father-in-law creates a huge fixed deposit in the name of the son-in-law.
  3. The father-in-law creates a huge fixed deposit in the name of the daughter.
  4. The father-in-law creates a huge fixed deposit jointly in the name of the daughter and son-in-law.
  5. The son-in-law starts a trading business. The father-in-law becomes a partner.
  6. The son-in-law starts a trading business. The daughter is the legal sole propreitrix on paper though her husband is running everything. The capital comes from the father-in-law.
  7. The son-in-law starts a trading business. He is the sole propreitor. The propreitorship’s balance sheet shows that the equity is all his, but that a major source of funds is unsecured loans from his brother-in-law.
  8. The son-in-law starts a trading business. He is the sole propreitor. He goes to a bank and gets a loan for the business. As collateral he offers a residential property registered in the name of his wife. The property was actually paid for by the father-in-law.

Okay, which of these is dowry? To complicate matters further, will 5-8 be dowry depending on when the son-in-law starts the business? Before the marriage? Immediately after? Ten years in?

The point I’m trying to make is that it’s not the financial transaction which is worrisome. It’s the control or the lack of control which the wife has over how the wealth is utilised that is the bigger problem. In an ideal world, the wife would have absolute control over a fixed deposit or real estate in her name. Her husband would not even know about it. In the real world, the husband will know, will manage the property, and will borrow against it and get away with just telling the wife to sign at the relevant spots.  That is not going to be cured by banning dowry, but by creating a society where women are encouraged to manage their own assets. That’s a long and painful process but it has the advantage of working.

This is the last post. Comment away!

Why Dowry is a Good Thing

April 1, 2007

I started the dowry series with two personal anecdotes. now here’s another one.

Years before Gurubhai was marrying for money, my grandfather’s sister-in-law was mortgaging her jewllery to finance his apprenticeship in a shop. Without the apprenticeship, my grandfather would have been a tailor. With it, he eventually got his own shop, became an Exide sitributor, and broke into the middle class- which allowed him and his family to escape from Partition alive. If it hadn’t been for my great-aunt’s dowry, I probably wouldn’t be writing this today.

This is the good side of dowry: it transfers wealth from people who have it to people who don’t. This wealth is especially useful to people who need to break from lower class to middle class and won’t get any help from banks to do so. It also gives parents an option to give their daughters an inheritance without having to use a will- which is of no small importance in a country where legal documents can be disputed to such brutal effect.

So here’s a reality check. Dowry has negative connotations. It is associated with forced marriage and a lack of modernity. It has been attacked by everyone from Munshi Premchand to 1980s Doordarshan propaganda filmmakers. It still serves a useful purpose.

But what about the bad stuff I’ve already talked about? The dowry deaths? The unreasonable demands to in-laws? A dowry death is a murder, and needs to be treated as one. The crime is murder, not taking dowry. Similarly, if you have a problem with in-laws being harassed for bigger dowries, treat it as criminal extortion and don’t criminalise dowry. Dowry is value-neutral. As Skimpy points out here, it’s no business of the state – or anybody else- what two families do by way of voluntary wealth transfers. It become’s the state’s business only when physical coercion or intimidation are involved.

Another point. Even assuming dowry bans are successfully enforced, it could end up being a net loss. It would end the high profile, heartstring-tugging, heart-bleeding stories  of dowry deaths and destitute girls’ parents, but it would also end up preventing parents from giving their daughters an inheritance without having to die first, and from entrepreneurial sons-in-law getting cheap venture capital. Compare Bastiat’s essay on the Seen and the Unseen.

Dowry isn’t perfect, but it isn’t evil either, any more than high school exams are evil because they lead some students to commit suicide. It could work better, sure, and I’ll discuss how in the next (and final) post of this series. But it’s still a useful tool, and needs to be appreciated as that- a tool, nothing more and nothing less.

Where Dowry Comes From

March 15, 2007

Over at this post by Skimpy, there’s a discussion in the comment threads going on about where dowry comes from. In the post itself, Skimpy makes this point:

then a friend told me that in Gultland dowry is mostly in kind (land, gold, etc) and they’re all in the bride’s name. so if her husband ditches her, he won’t have any of the dowry money, so he won’t ditch her arbitly! gults are smarter than i thought they are (good performance in entrance exams (which gults are extremely adept at) doesn’t necessarily mean one is smart).

This ties in with what Ravikiran wrote over email:

BTW, the simple analysis of this is to treat a dowry as an inheritance. In a society where inherited wealth is important, it is more difficult to defy your parents, not less. Your error is to treat the woman as the losing party in this transaction. It might look so now, but when she gets integrated into her husband’s family, she is also the beneficiary of the dowry her parents have given her husband.

But in the comments on Skimpy’s post, A Rod disagrees and says that dowry is the price of social status:

When a marriage is arranged what the women and their families look for is just 1 thing: social status. In order to buy the highest possible social status they pay as much as they can afford. It’s cause its a pure business transaction that dowry comes in as the price of social status.
That is why you will find a direct correlation between dowry and perceived social status but no direct correlation between dowry and cost of maintaining the wife.

And finally, Gaurav writes in and says:

In Maharashtra for instance, dowry is amost completely non-existent among middle class and upper middle class Brahmin families. But it used to exist 2 generations back. The ‘streedhan’ tradition existed even then, and ‘hunda’, i.e the marathi word for dowry was interchangeable with it.
Now in Maharashtra, dowry cases are restricted to the poorer families, if at all. Dowry, when it is rarely taken, is taken by families which are in debt, or facing some sort of financial hardship, and they treat that money as a bailout. There were cases of dowry and bride-burning in the 70s and 80s on which books have been written or movies and even tv shows made, and in all these cases, it was shown, realistically enough, that the dpwry was used by a middle class family to get a higher status of living, like a new flat, or a scooter, or something.
Today with the boom touching the middle class, dowry is not such an important source of liquidity, since the husband himself earns enough to buy these things.

All very fascinating stuff, and which will lead into my next post on why and when dowry is a good thing.

Why Dowry is a Bad Thing

February 21, 2007

(No dowry posts or any posts for that matter last week. Apologies if you were keeping a watch out- I flatter myself. I’ve been having trouble sleeping, and an overload at work- which persists this week also. So this post shall be rushed and incoherent and pompous and Aym Gramd. Sorry. Things may improve next week.)

Okay. The prevailing wisdom is that dowry is a bad thing. But why?

Two reasons that I can think of.

The first is that huge dowry demands strain the finances of the brides’ parents, and could clobber their standard of living. (Ravikiran earlier pointed out over email that the bride herself benefits from the dowry being transferred to her new household.) We dislike the idea of one family transferring all its wealth to another family and getting nothing in the bargain.

The other reason is that the thought of brides and grooms as commodities to be bought and sold appalls our conscience. We are liberal enough to be repulsed at the thought of trading people.

Which is where the problem lies. Liberality goes only so deep and so broad in the Indian context. The vast majority of people are not liberal. The ones who are are not liberal enough to reject years of tradition.

Dowry is being kept alive by a lack of liberal values. Once those values spread dowry will go away. The problem is that values take bloody long to spread. Until that happens, the next best thing is the economic incentives I described here.

Next in the series: the origins of dowry.

Where I Went Wrong

February 12, 2007

After all the comments and responses to the first three posts, this is a good time to touch upon the mistakes I’ve made while writing about dowry.

The first, most blatant mistake was to entangle dowry and arranged marriages. Paying dowry and forcing your daughter into an arranged marriage both arise out of the desire for cultural acceptance, but they’re still two separate things. So when I said that women from communities without a dowry tradition are worse off in the long run, I did it with the assumption that social acceptance would come only from arranged marriages, and rightfully got thulped by Nilu for it. There are lots of other ways to gain social acceptance- education, religiosity, and being cultured to name a few.

(Also, just as Nilu knows no Mylapore maamis who got married early, my data points were Delhi Mallus/ Iyengars/ Sardarnis who all had arranged marriages when they were 18-23. Serves me right for theorising based on anecdotal data.)

As for the deeper question of whether I’ve got my cause and effect mixed up, my position is that dowry is a consequence of inadequate financial systems and bad inheritance laws. Now, even though the financial system and inheritance laws have improved to the point that there’s no economic motivation for dowry, dowry persists as a custom because of cultural inertia. So the value of a marriage doesn’t really have a bearing on dowry any more.

Mistake number two was to loosely throw around the word elope as a catch-all. What I should have said was ‘the parents have an incentive to allow the girl to find someone for herself who won’t demand dowry’. Eloping is an extreme manifestation of that.

Mistake three was pointed out in Rashmi’s comment. It’s mostly a rant about market mechanisms, and Rashmi has either not read the post through or not understood it- but she does point out that I totally forgot that rising dowry demands also incentivise female foeticide and cutting down on education for women.

Fair enough. I was thinking about the incentives facing a family which hadn’t killed off their daughter, but then if I wanted to make a pretense of having a comprehensive series on dowry I should have mentioned that too. Mea culpa.

Three Counter Intuitive Corollaries

February 7, 2007

The last post on dowry throws up three corollaries which run contrary to received wisdom. Here they are:

  1. Women from communities which don’t have a tradition of dowry are worse off in the long run. In castes and subcastes with a dowry tradition, the girl and her parents have a financial incentive to delay marriage, or to elope with someone who doesn’t want dowry. But when the desire for social acceptance isn’t counterbalanced by the pain of dowry you’ll have more arranged marriages, at younger ages.
  2. Consumerism is a good thing. This is based on my point about all the stuff you can do with your money if your didn’t give it up as dowry. The next time you meet someone who moans about how dowry demands are increasing because of liberalisation and consumerism running rampant, ask them why it is that only the grooms’ families are consumerist, while all the brides’ families are saintly enough to forgo all the consuming they could do if they kept the dowry for themselves.
  3. Rising dowry demands are a good thing, because the higher the demand, the greater the incentive to say ‘Balls to social acceptance and tradition’. Crude oil at $75 a barrel may have hurt like hell, but it changed consumer behaviour. Hybrids became more popular and SUVs became less popular. Incentives matter.

Next up, I’ll talk about why dowry is a bad thing.

Saving Face and Saving Money

February 6, 2007

Back to dowry. As I mentioned in this post, fifteen megarupees is now considered too low a price for the privilege of getting your daughter married to someone she’s never met. However, there’s evidently no shortage of people willing to cough up the market clearing price.

If you parked twenty megarupees in a fixed deposit, you’d get more than one and a half megarupees a year at current interest rates. But societal taboos and social standing seem to be valued much higher. If you pay some wanker to take your daughter off your hands, you lose money. But if you don’t, you lose face. As a collective society, we seem to put too much of a premium on face.

But I think it’s a waning trend. Here’s why:

  1. Remember the Nisha Sharma case? A few people had made disapproving noises about how she hadn’t walked out because the groom had asked for dowry, but because the groom had asked for too much dowry- ‘unreasonable demands’. They disapproved because they thought that any demand more than zero is unreasonable.
    But I think it’s fantastic. It shows that even if you are indoctrinated to put a value on societal pressures, you don’t put an infinite value on them.1 There is a point at which you’d rather have the money than the respect. And if grooms demand more than that, you’ll tell them to go stick their heads in a pig.
  2. Respect faces competition these days. In the bad old days, when all you could buy with your money was a Premier Padmini and a badly constructed house, the respect of your societal peers is valuable in comparison. Today, though, your money can buy much more. If gaining respect means losing out on a premium flat in Gurgaon, or a foreign education for your other children, or a vacation abroad, you’ll think twice about rushing to buy respect.
  3. The economic rationale is disappearing. If your daughter is supporting you instead of you supporting your daughter, paying somebody else to take her off your hands is a pretty stupid idea.2

So I’m optimistic. Not optimistic enough to think that dowry will vanish in the next twenty years, but enough to say that it’s on a downtrend.

By the way, the series isn’t over yet. Do stick around.

1 I realise that generalising from a sample of one is not sensible. Let’s say that the Nisha Sharma case refutes the assertion that social customs are completely immune to monetary incentives.
2 This point seems to contradict the rest of the post by assuming that marriage and dowry demands are driven by economics rather than cultural inertia. My personal, unverified hypothesis is that dowry had an economic rationale to begin with, acquired the cultural overtones later, and is now driven purely by tradition. However, even if culture forces parents to marry their girl off, economic reality will encourage them to at least push the age of marriage forward.

Two Rumours About Dowry

February 5, 2007

There’s this rumour making the rounds of the IIMB gossip circuit that one of the IIMB guy’s mother was approached by an IIMA girl’s mother; who offered the girl’s hand in marriage along with ten megarupees of dowry. The guy’s mother refused, on the grounds that the girls’ family were Punjabi baniyas, while they were UP baniyas. Or the other way around. Who gives a damn about the finer distinction between baniyas anyway?1

When I first heard about this story, I got enthu and started thinking about how one could use rejected dowry offers to estimate the monetary value of a religious/ regional/ caste/ subcaste barrier. My initial enthusiasm evaporated later on. It’s actually a very silly idea, because different people will have wildly differing valuations of a community barrier2. My parents, for example, are getting so disturbingly desperate for grandchildren that they would have a zero valuation. Other people might have an infinite valuation.

More importantly, the offer might not even have been rejected because of the subcaste difference. It’s possible that the guy simply thought the girl was irritating and couldn’t stand the thought of being married to her. Citing subcaste differences might have been a politer, more face-saving way of saying no than saying ‘I’m sorry, but she’s an irritating cow, and being married to her would drive me up the wall.’3

The second rumour is about this guy who joined my employer in the same batch of campus recruitment as me. The story goes that somebody with all the right caste and astrological details and what not offered their daughter and fifteen megarupees of dowry. The guy’s parents practically laughed in their faces at this low offer.

This is astounding. If we take only the guy’s pre-tax annual salary, fifteen megarupees is a valuation at a P/E ratio of approximately 19. And this was rejected. It looks like the market for grooms is as stretched as the market for securities these days.

So what’s a girl- and her parents- to do in these days of overheated valuations? That, dear reader, will be the subject of several upcoming posts. These two rumours have gotten me thinking about dowry as a concept, and there will be lots of blogging on it this week. Until then, do read these somewhat related links: For Love or Money I and For Love or Money II.

1: As is evident from the mother’s reactions, baniyas themselves do. I was asking a rhetorical question.
2: As any MBA will tell you, any valuation I would have calculated would have been wrong anyway.
3:Which is what I would have said. But then I don’t see the point of saving other peoples’ faces.