Gold-Based Financial Histories in the Silk-Reeling Industry in South India
Oral history and material culture are seen to complement each other in tracing socio-political changes in the industry through the lived histories of stakeholders. Gold was chosen because it is an important store of value in India and also is valued in multiple ways - as a store of value, an indicator of status, a sacred object, a marker of caste and religion, a part of ceremonies celebrating life cycle events. Gold objects are seen as aids to remembering personal histories, and the nuance of the narrative is seen to contextualise the politics of gold ownership, embedding it in the context of everyday life, offering insight into the complex ways in which social institutions interact with each other and regulate the economy. Life stories around gold offer insight into religion and caste-based practices, to particularities of gender relations, and contexts for sharing and exchange in neighborhoods and work groups. A significant proportion of savings of employers and employees in the industry have been invested in the form of gold, often mandated by social norms – and gold is mortgaged frequently to finance purchases of the expensive raw materials needed by the industry or to pay advances to hire labour. The connection of gold ownership to the financial transactions of firms and of households, to production relations and to reproductive relations, imbue gold with narratives that demonstrate the precise relationships between both spheres. Carefully mapping these stories of objects across space and time through rigorous fieldwork in the sector and region offers a previously unexplored way of the informal economy in India.
Analysis of the specific ways in which the acquisition, ownership, and divestment of gold jewelry relates to cash flows and other transactions of credit and debt offers an understanding of the history of financial practices in the sites being studied. This provides an understanding of the other formal and non-formal institutions for borrowing and lending – including rotating credit associations, private money lenders, religious institutions, family and friendship networks – and how they relate to debt to employers, and to each other in reproducing vulnerability or allowing accumulation. The understanding of formal and non-formal financial institutions will also offer a way of locating financial inclusion policies in terms of the complexities of financial practices – including debt relations – of those who have been excluded for formal financial institutions which could make it difficult for them to utilize schemes that otherwise seem beneficial. Consideration of the ways in which gold-based life-stories relate to social institutional affiliations allows a way of understanding the social regulation of the silk economy. The nature of narrative accounts provides a way to analyse implications of relationships between caste, religion, gender, language, age; the politics of markets and production; the relationship of individuals to each other and to the local state; and the ability to accumulate; in the lives of those who shared accounts.
The gold-based life-stories gathered across the silk industry revealed that the difference in ability to hold of gold, as a result of socio-political and financial power, can be seen in terms of a dynamic spectrum based on differential abilities to hold and expand their control over their means of production and reproduction. The opening of the Indian market to imports of Chinese rawsilk in 2002 caused huge losses of gold holdings of local entrepreneurs who invested in raw materials before the market for the finished product crashed and so lost their working capital. A decade later, there is a great diversity in the degree to which each of the one thousand or more home-based firms has been able to recover from the initial financial shock and to operate production to accrue a surplus in the current context. The peak in gold rates in 2008, corresponding with the world financial crisis, means that stocks of wealth held as gold have multiplied in value so individuals who held gold have larger asset holdings while those who lost gold struggle to acquire it at current prices. Some producers were able to hold gold through the period following liberalisation or acquire it after liberalisation, because they already had relatively higher financial, social and political power which allowed them access to an accumulated surplus, or simply because they have more sons than daughters. Producers who mortgaged and couldn't recover gold during the periods of dramatic rawsilk price falls immediately following the liberalisation in 2002, now struggle both to run their production units, in which they work themselves, and to buy gold at the current prices, even for social necessities like the customary pair of earrings considered a minimum dowry for daughters’ marriages. Those who were able to hold gold through that period have seen the value of their assets multiply and they have been able to sustain production, hold hired labour by offering large loans as 'advances', and invest in the education of their children. Employees who could hold gold through this period because they had the support of their families, or the support of the employers who were willing and able to loan them money at the time, and others have been able use newly available micro-finance loans to invest in gold because they weren’t forced to use it for subsistence. Individuals have been able to make productive investments with this gold (like investments in children's education) which sometimes free them from the need to work in silk units - some were even able to use this gold to start silk-reeling businesses of their own. Others who have been unable to hold their gold, related to the lack of social and financial capital, or because of large expenditures on healthcare or dowries find it much harder to make productive investments with their earnings and with borrowings, and are more vulnerable in debt-based contracts.