The Marwaris

Title: The Marwaris – From Jagat Seth to the Birlas

Author: Thomas A Timberg

Publisher: Allen Lane, 2014 (First)

ISBN: 9780670084982

Pages: 184

The Marwaris form a powerful business community in India. More than a quarter of the country’s richest men belong to the group. They control many large and profitable enterprises that are leaders in their area of expertise. However, the term ‘Marwari’ conjures up images of a usurer or a non-ethical trader in many parts of India, most notably in the South. They are associated with money lending at cut throat interest rates, and are intent on promptly getting the money back without any leniency or kindness. In other words, their social standing may be likened to Jews in medieval Europe, with Shylock as their most notorious representative. The term ‘Marwari’, which is used in the book, however refers to enterprising families from the region of Marwar in Rajasthan, which is centered on the city of Jodhpur and adjoining areas. They do not belong to any particular caste – which is very important to note – but includes Hindus and Jains as well. A typical Who’s Who of Indian business includes names like Birla, Goenka, Ruia, Singhania, Mittal, Khaitan, Bajaj and numerous others, who are all Marwari. Thomas A Timberg is a scholar and consultant on economic development. His fields of study include Baghdadi Jews in India, contemporary microfinance and Islamic finance. His doctoral dissertation was on the Marwaris as industrial entrepreneurs and this book is a result of his continued interest in following the affairs of the community. This book is also a part of the series, ‘The Story of Indian Business’ edited by Gurcharan Das. Another title in the series, ‘Merchants of Tamilakam’ was reviewed earlier in the blog. Das has contributed an illuminating Foreword to the book.

Business communities are groups of castes with a common regional origin and a traditional involvement in trade and industry. They constitute several castes. Incidentally, different occupational interests may be seen in one caste. The Amils are traditionally service oriented, with most of them taking up positions in government, while the Bhaibands are entrepreneurial by turn of mind. However, both are members of the same Lohana caste. The Marwaris found lucrative business opportunities in an India moulded by the British East India Company. Many of them migrated under Jagat Seth to Kolkata. Their acumen in identifying a business opportunity quickly enabled them to grow beyond comparison. Three typical roles were donned by the Marwari businessmen in running the economic system put in place by the British. This included great firms, that is, large state banks; formal Banias or guaranteed brokers to large foreign firms; and firms that dealt with future and ready markets for shares and commodities. Timberg identifies the reasons for the growth spurt seen in Marwari establishments, such as psychological disposition, social support networks and individual and historical factors. They had innovative ideas the world had not thought about. For example, the Birlas had a kind of accounting system called Parta, which was widely used in the family business for monitoring and financial control. However, the author’s remarks hide echoes of racial profiling of successful business people. There were Marwari firms like Tarachand Ghanshyamdas which failed. Also, Marwari firms flourished in foreign lands too, where you can’t point to social support or historical factors for the success story. Hence, the most logical thing to conclude is that they excelled because they cultivated the above-mentioned redeeming characteristics and not under the umbrella of an enveloping caste system. Timberg’s unwarranted assumption on the effects of caste in the observation that there is a large portion of Indians in the Fortune 500 list is challenging the wisdom of modern Indian society and the principles of social justice. The last two chapters of the book are of a general nature applicable to any business. Where the time-honoured principles of watching the money, delegation of authority with constant monitoring, importance of having a plan with a style, inhibition-free growth and right corporate culture is enunciated, that enterprise is bound to create wonders.

As in most practical cases, good business firms are not necessarily ethically good too, for at least some of the times. Marwari enterprises are also not totally immune from this general principle. The institutions freely traded in opium, but of course, it was completely legal in those days. We should not examine an event in the past under the glow of enlightenment of a future era. But still, it was evident even in those days that opium was a dangerous substance that dissipated men into insignificance and a destroyer of families and health. Besides, industrialists always supported the ruling power. In 1857, when the country erupted into its war of independence, the Marwari businesses helped the British in crushing the insurrection. All of them were richly rewarded for their loyalty. However, it should also be pointed out that industrialists like Birlas sided with the national movement spearheaded by Gandhi, providing all material support, even at the risk of antagonizing the British.

Timberg adopts a very prejudiced point of view in assessing the entrepreneurial spirit of Indians, incorrectly attributing it to the ethos of belonging to a caste or community that traditionally indulged in business. Thus, Nandan Nilekani is hailed as a successful businessman ‘even though’ he did not belong to any recognized community that specialized in business. An unfortunate aspect that cries out is the lack of proper structure in the book’s organization. Though it is rather small, the book took a time disproportionately longer to complete, owing to its regretful inability to interest the reader. The author has relied heavily on the work ‘The Life and Times of G. D. Birla’ by Medha M. Kudaisya. The text transforms into a review of the book at times. History and anecdotes of prominent business personalities abound in the book, but there is no thread of analysis that strings them meaningfully together. The work is adorned with a good section of Notes, a Bibliography and an Index.

The book is recommended.

Rating: 2 Star