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The Other Side of Caste as Social Capital

There is an increasing recourse to the concept of social capital in explaining development outcomes in various spheres. In some recent writings, caste is viewed as a form of social capital, and the use of caste-based networks is supported for attaining positive outcomes in entrepreneurship. This article, based on a field survey in a small-scale industrial cluster in Jhunhunu, Rajasthan, critiques the proposition of ‘caste as social capital’ by contending that caste is not an isolated category; in fact, it is relational in nature. Hence, caste-based economic networks may reduce transaction costs and improve efficiency of some, but they create new forms of exclusion by creating strong entry barriers to entrepreneurs from other castes. Social capital, unlike economic capital, increases with use, and its initial endowment might decide its future accumulation. The use of social capital thus leads to the generation of systemic and structural inequalities.