gauravchaudhary
New member
sansanwalamit said:Jats all over Delhi are in OBC category and not just from outer Delhi, being a Jat from Delhi I believe that it was nothing but a stupid political gimmick to bank votes. Thankfully, it didnt even work for that.
I dont know how this has affected Jats from other regions, but to Delhi Jats it didnt mean anything, most of them do not even know about it. Most of them simply do not need it and do not care about it.
As your location suggests that you are in Delhi School of Economics I would ask you two things. Does'nt reservation pose as hinderence to Pareto Optimality and doesnt it lead to good talent being driven away from the labour market. Think of the bad cars driving good cars theory (also known as bad lemons vs. good lemons theory).
Cheers,
Reply.
First, I beg sorry for being late in reply. I my giving a detalied reply to your questions and will explain points with the help of basic economics.
Reservations in no way pose hinderence to pareto optimality. Firstly, the initial situation is not necessarily a pareto optimal situation. But, to begin with let us assume that that initial labour market situation is in a pareto optimal state. which means the situation is such that no one can be made better off without making any one else worse off. also since we assume that we are initially at pareto optimal state, this implies that markets are competitive. Now your argument is: there r perfectly competitive markets and there is some initial distribution of income/skills/resources, now let the markets do their job of allocating resources because markets do resource allocation in most efficient way. You are right and your point well taken. But pareto optimality says nothing about distribution of income. Assume we have 101$ in resources/skill. If one individual is getting 100$ and another is getting 1$ even that may be a pareto optimal situation if at such a situation the indifference curves of two individuals are tangent to each other. But is such a situation acceptable, ie basic question is: IS SUCH A SITUATION "WELFARE MAXIMISING." No, its not. So something has to be done. Now through reservation we sort of change the initial distribution of resource/skill/income. With this changed initial allocation we again allow markets to function reach a new pareto optimal state where,say, distribution is 60$ and 41$. So we move from one pareto optimal state to another pareto-optimal state. Now look at social welfare. Social welfare is a question of value judgement. Generally it is acceptable that a move from extremely inequitable distribution of resources to comparatively equitable distribution is welfare enhancing because marginal utility/marginal welfare falls with increase in income. An extra $ for someone who earns 10000$ adds almost nothing to welfare but for someone who earns $10, it would substantiall increase welfare. Here we assumed that economy is not growing (101$ constant) which is not true. In reality, the question in india is one of giving benefits of growth to weaker sections. so in reality through reservation, weaker sections are also allowed to become able to garner skills which help them join modern work force. At the same time, impact of reservation on those who do not have is little.
cheers