Abstract
Introduction: Thing-ness and Quiddity
As a field-work-based student of the political economy of India’s food systems and rural transformations, why am I asking you to read my account of one particular, non-food commodity? Gold has been implicated in the rural economy in a way that is matched by few other non-food goods or commodities, which raises the question ‘why.’ The answer lies in its distinctive qualities, its quiddity. And when one begins to grasp its quiddity, one begins to understand its profound significance for social development—especially in India.
To develop answers to these questions, we must explore the goldiness of gold. That is the main purpose of this essay. But before we do this, it is useful to reflect on things in general—the nature, or rather the natures, of the objects or products which serve as exchangeable commodities—of which gold is one. Thinking about the nature of things is a fast-growing field of study. We can see the many different approaches to understanding things, and thing-ness, either as a sign of the vibrancy of social science—or, since the approaches tend to persist after what looks like decisive criticism, as a sign of a crisis.
Things are represented through words. Scholars of literature are developing Thing Theory (Brown, 2004), which has delved with scepticism into the inadequacies of language and other forms of depiction for representing the material world. They find that ‘moments of physical or metaphysical interruption to an object’s conventional utility … lead to an important alternative or newfound perception of the materiality of that object, what (Bill Brown) calls the object’s “thingness”.’ Thingness may therefore have different meanings for us and for others and they may change during the thing’s material lifecycle.
The question, whether thingness may have agency in such changes, is at the heart of Bruno Latour’s (2005) Actor-Network Theory in which complex assemblages of non-human things including commodities have agency just like humans do; agency which is considered of equal importance as human action. 1 While this notion has delighted geographers, and while the impacts of bio-geo-chemical metabolic processes are as incontestable as those of the structures of law, the conventions of markets and the customs of families, to say that they have ‘equal importance as agents’ is a value judgement, not an axiomatic statement of fact. The idea, however, is seductive. The historical novelist Amitav Ghosh (2023) argues that the opium poppy which frames his Ibis Trilogy, is a ‘purposive entity’…‘it creates its own history’…‘what it does is not random.’ Through its capacity to cause addiction, opium undermines and dissolves state structures. As evidence, Ghosh ranges over nineteenth-century China, contemporary America and Mexico, and the current addiction crisis in Northeast India. But only humans have consciousness, 2 only humans have intention, only humans exert power, only human societies can remove ethical and/or political constraints to profit. Things—even things which indeed look potent like opium—need humans and human societies to give them social meaning and material consequences.
It was Karl Marx who first distinguished the social meaning of the commodity circulated through its exchange from something produced for use, but he did this in a highly abstract way. When we consume a commodity, vesting in its inherent attributes and properties, and when in so doing we ignore or deny the social forces and relations through which it has been produced, Marx argued, we make a fetish of the commodity. Generalised under capitalism, our relations as consumers with real producers and their labour time are masked and alienated. It is the fantastic values of market-mediated relations between things that are a fetish (Marx, 1976) and in that fetishising lies the commodity’s mysteriousness. However, while the economic fetish is theorised as common to and inseparable from all commodity economies, the fantastic values—one might even say the fetishes of commodity fetishism—the significance of the granular and varied social meanings of individual commodities for economic and social life—were not developed. Instead, they were relegated to being analogous to the ‘misty world of religion,’ ‘theological niceties,’ and ‘metaphysical subtleties’ (Marx, 1976, p. 163). The consequences of retrieving and specifying them seem not to have been followed up. They are not considered interesting to political economy.
Of late, however, things have even been theorised as devoid not only of social meaning but of their distinctive physical attributes. Both are seen as having been rendered irrelevant by the all-out commodification of the life sphere as commodities are ‘emptied of meaning and affective charge,’ let alone of ‘material content’ (Lash et al., 1993, pp. 12, 15). But we can already see that this is far from so. Business journalists, earning livelihoods from understanding the distinctive characteristics of particular commodities, know this. Some anthropologists and historians have also seen a particular commodity as a lens through which to tell political and social histories—for example Caribbean sugar in Sidney Mintz’s (1985) history of slavery and the British industrial workforce; and cod, beaver, furs, and iron in Harold Innes’s (1930) history of the staple-based colonisation of Canada. But economists have ignored the meanings of commodities pretty completely.
We see this even in the economists’ practical world of international trade agreements, where ‘the question of commodities is central to the development problem’ (Corea, 1977, p. 182). When commodities cry out to be classified, we read about groups of them: ‘primary products,’ ‘manufactures,’ or ‘raw materials.’ The guiding concepts are not the implications of either their inherent characteristics or their production relations but their supply, their demand, (non)conforming price behaviour and the normative need for equitable prices. At the inception of the United Nations Conference on Trade and Development project, commodities had particularities only in the combination and balance of devices used to regulate their trade: export quotas, buffer stocks, and multi-lateral sales contracts (Gariepy, 1976). 3
Amartya Sen’s (1985) Commodities and Capabilities might seem an exception. Sen argues that the distribution of entitlement and command shapes societies, which consist of people each with complex characteristics, welfare outcomes and feelings about them. But while his notion of capabilities—people’s ‘being and doing,’ their functioning, achieving and flourishing—depends on material things, Sen does not discuss the capacities of specific material things, in their role as commodities, to facilitate, shape, or constrain the individual and collective capabilities and achievements of human beings. Sen uses ‘commodities’ and ‘commodity fetishism’ as metaphorical proxies for the income/GDP-/utility-based notions of welfare, which he regards as seriously incomplete because they are confined to market exchange. 4
This brings us back to the thingness of things, their ‘quiddity.’
Quiddity is an archaic word meaning ‘whatness’: ‘the essence or particularity of a thing.’ 5 In my book India Working (2003), a political economy of mofussil India, I restricted the discussion of quiddity to two broad dimensions. One refers to the physical characteristics or properties of particular commodities, and the way they have determined the economic, social, and spatial characteristics of their production and distribution. I argued that physical quiddity will affect production and trade, contributing to its institutional character. Take a physically perishable food item like tomatoes: cash is preferred and close proximity to final markets reduces the risk of rotting. Un-seasonal trade will depend on control over technologies of preservation and processing. The other dimension of quiddity is the culturally specific meanings of a commodity. Take the many languages of Indian food, where we can recognise culturally particular attributes such as impurity (for some: pork, garlic, alcohol, and untouchable water), regional status (Amritsari gold kulcha [a type of bread] versus millet kunji [a type of porridge]), inauspiciousness (timing of events/water-related gifts and purchases), heat (bananas as cold/mangoes as hot), and excess (for some: meat versus fasting food) (Harriss-White, 2003).
Quiddity is the specific mix of a thing’s physical and social characteristics. While in Marx’s concept of commodity fetishism, it is the exchange values of markets that shape things, I suggested in India Working that things can also shape markets, culture, and politics in unique ways. 6 To my knowledge, among economists, the concept of quiddity and its implications have sunk without trace. And outside philosophy and poetry, no one in India took an interest in it until Anindita Chakrabarti’s team saw its sociological relevance for our edited volume Gold in India (2024). What follows is thus my ‘first cut’ of what that collective work has produced.
The Quiddity of Gold
In gold, I feel some affinity with Marx as he reflects on money. Nobody, Marx remarked, had written so much about money who had so little of it (Eagleton, 2023). I have written little about gold (Colatei & Harriss-White, 2004; Harriss-White, 2016) and had even less of my own. But our (Chakrabarti & Harriss-White, 2024) nine studies of gold form the rich lode to be mined here. 7
Why gold? And why is gold important?
India is a gold-attentive society and a rapidly developing global gold hub, importing, manufacturing, and re-exporting the precious metal. At about 900–1,000 tonnes and valued between $35 and $40 billion, India’s registered annual gold imports account for a quarter of the world’s gold supplies, second in value only to its oil imports, and of late, equal in value to half of all the foreign direct investment entering the country. In 2021, gold imports even exceeded FDI. At $85 billion, jewellery, gems, and gold taken together are as important as the construction industry in their contribution to India’s gross domestic product (7.5 per cent each), and equal to half of the contribution of the entire agricultural economy.
Indian households are the world’s largest holders of gold, storing about 30 times as much as is stored in India’s official reserves 8 and, at $1.5 trillion, equivalent to the market cap of Google. Despite its glitzy press coverage, 80 per cent of the country’s gold is securely stored in rural almirahs, but unevenly. Keralite households hold 30 times more than the average household in the BIMARU Hindi belt (Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh). Further estimates of the value of total temple gold vary widely, but the consensus is that it equals that of the gold in Fort Knox.
Gold also provides livelihoods. In the shadows of the informal economy an estimated 6–8 million workers make a living from gold—mostly self-employed, or in skilled, but more or less tied, craft-work, and casual labour. An estimated further 2 million labours in gold manufactories.
India’s re-export of 20 per cent of all imported gold in the shape of manufactured and crafted jewellery amounts to a third of world consumption and, at $38 billion, earns twice as much foreign exchange as do agricultural exports.
What is the quiddity of gold that has generated an outcome of such quantitative importance for Indian society?
This is not as easy to unravel as it might seem. We will try to separate the physical properties of gold and what they denote from its cultural properties and what they connote. In turn, we will take this separation in two stages. First, what the content of the literature suggests—‘gold orthodoxy’—and second, what our Gold in India volume contributes as reflections on the orthodoxy, on the separation of the physical and the cultural, on gold as fetish, and on the implications of the neglect of social relations in the gold system.
Gold Orthodoxy: The Physicality of Gold
Without venturing into advanced physics and chemistry, it is still possible to grasp the physical properties of gold and how they denote what they denote. First, gold is scarce. All the gold extracted from the earth throughout human history would fit into a 20 cubic metre box. Gold is difficult and polluting to extract. It is a very dense and unusual transitional metal—one which forms stable ions 9 making it unreactive and ‘inert.’ It is resistant to corrosion, yet it is malleable. Also highly conductive, it is a metal easily precipitated by a reduction in a chemical solution. Last but far from least, gold has a distinctive—even if widely imitated—lustrous colour. There may be more: currently without practical uses, rather than softening at extreme temperature, gold hardens (Descamps et al., 2024).
The Implications of Physical Properties for Physical Artefacts and Social Use
These are perhaps best seen in its least quantitatively important, but multifarious, technological applications. About 5 per cent of India’s gold is destined for industrial and medical commodities. Its chemical stability enables it to serve as a trustworthy chemical catalyst. Its resistance to corrosion is good for coatings; its resistance to wear and tear invites uses in electroplating. The conductivity of gold is exploited in circuit boards and semi-conductor packages; there will be gold worth $2 in our mobile phones and $10 in our laptops. 10 Its slowness to heat makes it good for soldering. It is a constituent of high magnetic fields and used in MRI-scanning technology. Its capacity to be suspended as tiny particles in colloids leads to its use in bio-imaging, in the precision targeting of drugs, tumour detection, and gene therapy. Its pliability means that one ounce can become a 50-miles-long wire (Sreekumar, 2024). As a hard yet biocompatible metal, gold has been used for thousands of years in dental prosthetics and/or for ornamental status in mouths. For the same reasons and more, gold provides Ayurvedic ‘ash’ for conditions ranging from impotence to arthritis. As varq (a very thin foil), gold is used to decorate both sweet and savoury food without physical harm to its consumers.
Gold Orthodoxy and Social Meaning
This is where the orthodox story closes in on gold as a social fetish. The ‘divine metal’ of early Hindu texts, gold in India has sacramental value (Chakrabarti, 2024). 11 Its colour, non-corrosion, and lustre is associated symbolically with transcendent light, enlightenment, illumination, the sun, eternity, life, fertility, and renewals. Gold is thus an auspicious material signifying fortune and ritual purity. Its scarcity endows it with distinction. Its malleability means that it can be worked to rich semiotic effect (Sathyanarayan & Bais, 2018) 12 and then re-used, without the stigma attached to second-hand goods and their markets, even though scrap gold is often purchased at lower prices than ingot gold.
Orthodoxy and the Implications of Social Meanings
The inertness of gold means that it will keep for long periods (at the least for thousands of years) which is useful for more than life-time savers and which, given long-term rising price trends, is an indirect indicator of future scarcity. About a 10th of India’s gold takes the form of bullion, ingots, bars, and coins. As a public store of wealth about 7 per cent of India’s reserves are locked into gold. 13 In society at large, gold persists in being regarded as a safe hedge, albeit one requiring careful protection. It is a form of wealth easily concealed from state scrutiny. Gold is also an alternative store of wealth to bank deposits for people for whom it is morally repugnant to live off interest. 14 And, as near-money, it has moved fungibly between being a store of wealth and of value, a unit of account and a medium of savings, investment, and of exchange.
The rarity of gold makes it directly useful as coinage for exchange while also being able to serve as a standard for other currencies. ‘Hold on,’ one might say, as Bazil Shaikh (2024) notes in our volume (Chakrabarti & Harriss-White, 2024), India’s use of the gold standard between 1898 and 1945 was not due only to its physical qualities, but also to vigorous policy debates, contingent factors, and the interplay between Britain as an imperial power and India’s domestic interests. One might add that this experience fed into the creation of the Bretton Woods monetary institutions between 1945 and 1971. And now, with the collapse of the Bretton Woods system, the fiat money system depends on social trust, political rules, and Central Bank regimes which eventuate in the rise of an idea of gold that no longer requires its physical presence and that relies on its cultural reputation. In India, by 2022, digital gold amounted to an equivalent of 35 tonnes and excited 5 million investors (Chakrabarti & Harriss-White, 2024). As well as physical attributes, politics clearly shapes the social quiddity of gold.
But, reflecting its physical malleability and unusual versatility, some 60 per cent of the world’s gold and 85 per cent of Indian gold is being worked into jewellery.
The meanings attached to its colour and lustre mean that gold and gold jewellery are gifted at festivals and in all life-cycle rituals. The World Gold Council estimates that half of India’s gold is destined for the celebration of marriages. Its scarcity is marked through the micro-politics of adornment, as symbols of status, wealth, material success, and female power: chokers, necklaces, pendants, earrings, nose-rings, tikkas for hair partings, bangles for wrists, anklets, and waist chains—with or without gemstones. For millennia, ‘with glittering ornaments they deck them forth for show; for beauty on their breasts they bind their chains of gold’—thus states The Rig Veda (Griffith, 1896, cited in Sreekumar, 2024). The low status of certain kinds of women, however—widows, some unmarried women, dalit women—has until recently required them to forfeit the wearing of gold, although this is now widely being challenged, income permitting.
As a female asset—streedhan—gold, gold jewellery, and gold coins appear to ensure the material security of women (and their children), when the state’s eligibility criteria for social security make women particularly insecure (Naylor, 1996). In practice this gold is not always controlled by the woman in whom it is vested, but by the incoming bride’s affinal family and by her husband. It is inherited down the female line in patriarchal property systems and, symbolically and materially, it reinforces the inter-generational bonding of women to families and to one another. Of course, men have not foresworn gold, using it for shirt studs, neckbands, and rings to display and signify material wealth, but in general not using it as an asset or a means of security (Tarlo, 1992).
Such social practices and meanings can be distinguished theoretically as the moral economy of the household, in opposition to the political economy of the marketplace (Guérin et al., 2024; Mujeebu Rahman & Chakrabarti, 2024). In fact, the two are closely intertwined. Even when a currency has long been delinked from the gold standard, the auspiciousness of gold identifies it as a repository of trust, which reinforces its role in savings. This moral economy is also expressive of a political economy of informal exchange, which eschews paper trails and registration, in which banks are widely mistrusted, and in which caste, kin, neighbour and family relations predominate. 15 The way in which the market value of gold meshes with the incommensurable auspiciousness of temple coinage is seen in the 2023–2024 example of the demand for Ram Mandir’s gold coins which surged five times in advance of the Ram Mandir Pran Pratishtha ceremony of 22 January 2024, when the Ram Lalla idol was installed in the Ram Mandir at Ayodhya. So too did demand for gold statues of Ram, and for a ₹1.3 lakh Ram Temple golden ring (see TOI Business Desk, 2024).
From this brief discussion of the quiddity of gold, we see that it is often hard to distinguish physical from social characteristics and implications and that quiddity is in fact a relational term. Not only ‘in itself,’ the thingness of gold emerges from social and economic interactions and from relations with other things that are also shaped by society. As the demand for gold has spread through Indian territory and society, gold is fast transforming from being a social luxury into an economic necessity. Caught in a paradox, gold needs to be scarce to retain its social value, but it has to circulate to do its social work (Chakrabarti, 2024).
Gold and Social Development
How to relate the meanings and uses of gold that constitute its quiddity to social development? What is meant by social development? If we understand social development as the processes involved in the movement towards full economic, social, and political citizenship, expressive of wide individual and collective capabilities, our attention is drawn to what shapes and blocks these processes—to economic exploitation and oppression, to social exclusion, and to social ‘marginalisation.’ And the uniquely protean quiddity of gold means that it is involved in a uniquely wide range of relations of capital and labour in which these conflicts and contradictions are at play. It is an index of all this that unlike iron, or rice, or even sugar, this particular mineral is known at every stage it goes through, from mining to the production of gold leaf or the wearing of a necklace, by the same single generic word—gold.
The first-cut story, which follows, may jar with my readers. If it does, one reason may be that there are large regional variations in the gold system in India, which are necessarily omitted from the river-bed panning exercise I am engaged in here.
India’s Gold System
‘Gold gets dug out of the ground. Then we melt it down, dig another hole, bury it again and pay people to standard around guarding it. Anyone from Mars would be scratching their head’ (these are words attributed to Warren Buffet at Harvard in 1998). Indian gold is different. Here we use our book Gold in India to revisit the quiddity of gold systemically, relationally, institutionally, and historically. 16 Only after this can we assess its implications for social development.
Mining
Gold is rare, in the earth’s crust in general 17 and in India in particular. Nuggets are vanishingly rare. Perhaps 0.1 per cent of India’s annual gold originates in India. Despite a three millennia history of mining, minuscule amounts are still excavated: at Hatti, a bus ride north of the toxic moonscapes of the decommissioned Kolar gold fields (Nair, 1997), 18 and by Sri Lankan repatriates in informal artisanal mines jammed into Nilgiri–Wayanad tea estates (Jyotishi et al., 2018). Gold is also panned in river-beds of Central and North India and extracted as a by-product from copper smelting in Gujarat (World Gold Council, 2022). 19 But virtually all of India’s gold—about 1,000 tonnes of it every year—is globally sourced, streaming in from the ends of the earth.
India’s gold is mined, open-cast, in Latin America—Brazil, Peru, and Bolivia; in West Africa—Ghana, Mali, Burkina Faso, and the Democratic Republic of Congo; and in East Africa—in Tanzania and from newly discovered deposits in Uganda. Although regulative institutions exist in state and civil society (Ministries of Natural Resources, Chambers of Mines), at least a fifth of India’s gold supplies are described as unregulated, artisanal, and/or illegal. Generating pollution through the co-extraction of heavy metals and river-bank erosion, its extraction also involves child labour and abuses of workers’ rights and human rights; its initial trade and shipment may involve illicit finance, exchanges for drugs or arms, smuggling, and violent conflict.
Imports
Quite a lot happens between the social origin of gold and its arrival in India: 60 per cent as bullion and ingots from Switzerland, South Africa, and the USA, and 40 per cent as doré (variable alloyed admixtures of gold and other metals, notably silver and copper) mostly from the United Arab Emirates (UAE). Latin American gold reaches India directly from Miami and Zurich. While gold from East and Central Africa may also flow directly to India, gold from Mali and Burkina Faso is aggregated in Ghana before heading for Dubai. With its vast informal souks and glittering malls, its reputation for lax regulation and laxer enforcement, Dubai is fast becoming a pre-eminent trans-continental hub linking America, Africa, Europe, India, South East Asia, and China. While three official Indian institutions—the Reserve Bank of India (RBI), the Director General of Foreign Trade, and the Ministry of Finance—control the entry of gold from Dubai and elsewhere to the ‘nominated agencies,’ trading houses and banks licenced to import (NITI Aayog, 2018), a host of Indian diasporic traders, bulkers, and commission agents accumulate wealth from aggregating, disaggregating, and managing the logistics of bullion, doré, and scrap. So do hawaladārs. 20
It is estimated that 40–50 per cent of India’s doré and bullion imports—pouring in, two-thirds by air (occasionally by the diplomatic bag), a quarter by sea and the rest by land from Dubai via India’s neighbours—is unaccounted for. And that of the half of the bullion and doré that is actually accounted for (paying duty and sales tax as it enters India), 40 per cent has illegal origins. Unaccounted or illegal gold doré and bullion could be over half of all supplies.
Also relevant is the fact that India is one of the world’s biggest smuggling hubs (Martin, 2019). Not only does the smuggling of gold wax and wane to evade the waxing and waning of excise duties, it also persists because it is a prime vehicle for money laundering and tax evasion and to obliterate crimes. Black gold commingles easily with legitimate commercial circuits. Black gold can be used at all three stages of money laundering: in ‘predicate crime’ such as tax evasion and fraud, facilitating the ‘layering’ stage through ingenious and sometimes complex false invoicing, hawala (trust-based exchanges across jurisdictions without physical money transfers) and trade-based moneylending which disguises and cleans criminal proceeds; and finally, for the re-integration inside India of these proceeds in legitimate activity, mostly as jewellery (Sreekumar, 2024).
Hawala can be mis-invoiced—moving value outwards by underestimating exports and overestimating imports and vice versa—with gold often able to account for the differences. Hawala transactions can be part-receipted or reimbursed through repayments in kind (for example, with construction materials for gold in one Uganda case, and consumer goods for gold in a Congo case). Organised across jurisdictions through the networks of criminal merchants, gangs, syndicates, cartels, and mafias, together with more or less-bonded carriers, drivers, and protectors, smuggled and illegal gold is easily recast, anonymised, traded upcountry, or re-exported legally or illegally. In parts of India, such as Kerala, the gold mafia has protection forces not known for being squeamish about using violence or restrained about other violent crime (see Anand, 2020). Estimates of India’s total gold imports that are smuggled vary up to a half. With impacts on price behaviour, investment, growth, corruption, and private protection, smuggled gold is a non-negligible slice of the Indian economy.
Official Gold as Bullion
The Indian government, through the RBI, imports gold bars or bullion for its heavily securitised reserves, although half of its gold reserves is actually stored outside India. 21 India has slowly built its gold reserves from 219 tonnes in 1951 to about 800 tonnes in 2024. 22 The proportion of India’s reserves held in gold is not special, conforming with those of other ‘developing’ countries, but being a third of the proportion held by ‘advanced’ ones.
Refining
Gold is refined—concentrated and purified—from two raw forms: two-thirds ingots of doré and one-third scrap. Doré refining tends to be sited in the North while scrap gold refining is more common in the South where household stocks of worked gold are far greater (and records are poorer). Despite import duty, doré refining is profitable enough to undercut official imports of gold bullion and the capacity of some refineries to evade import duties only results in the further inflation of refining profits.
As with its gold reserves, refining is not exceptional in any way for India. Refineries are capitalised through ownership in a range of ways: joint stock, joint ventures, joint families, and partnerships. For the 27 registered ones accredited with the Bureau of Indian Standards, tax breaks accentuate the advantages of scale economies over less well-recorded, small, local refineries. They are polarised in size from the capital-intensive 300 tonnes to the many plants which have capacities under 50 tonnes and unentitled workforces under the labour protection threshold of 20. 23 The top five process 70 per cent of imported doré (World Gold Council, 2023). But at 20 per cent, average capacity utilisation is well below optimal and much below the Indian average for manufacturing. Seven toxic technologies jostle and co-exist, mainly favouring mercury or cyanide for extraction and chlorine or electrolysis for purification. As in other socially segmented economic sectors of India, the economic laws of convergence towards most efficient technologies, forms of organisation and contracts, are not validated.
Between a quarter and a half of the refinery products are thought to be destined for investment and are not further physically touched. While little is published about the wholesaling, retailing and commission–agency brokerage of refinery products, bullion, and ingots, their by-products, silver, and waste, sludge, are long established as goods traded through firms with highly unequal assets and economic power. 24 At the pauperised extreme, the sludge of Zaveri bazaar in Mumbai is the hunting ground for raw material for a pride of unregistered and lawless micro-refining ghamela, who master these noxious processes through ‘learning by doing,’ and who sweep dangerous by-products into the drains (Bose, 2018).
Most sectors of the Indian economy have structures and dynamics like this: at this stage the quiddity of gold lies in its lack of exception.
Further Manufacture
It is thought that, whatever its origin, 80 per cent of India’s imported and refined gold is continually being manufactured into jewellery. Half the further crafting of gold is of gold alone, while the other half includes gemstones. The jewellery industry as a whole account for a thirteenth of the value of the entire Indian economy. But its scholarly literature is one-fortieth less in size than that on construction, whose contribution to GDP is similar. 25
Gold Craft
In 2016, there were an estimated 4 lakh (400,000) jewellery businesses in India—of which 95 per cent are far smaller than the ‘micro’ of MSMEs (micro, small, and medium enterprises). In these firms either the raw materials belonging to merchants are worked or bars and ingots are bought from them and jewellery sold (see NITI Aayog, 2018). These artisanal workshops (karkhana) dominate the crafting of gold. Just 14 per cent are registered for sales tax. Organised as kinship enterprises, family and firm are not separate entities and family labour is socialised to craft and trade inside them. Employers (maliks) do not just manage kin but also transact with or employ some 6 million labouring smiths, finely divided by specialised task. These karigar are skilled through long apprenticeships in workshops where harsh measures are in place to prevent theft, 26 yet where the ‘loss’ of gold flecks and specks from a shift of manual-working is institutionalised as a way for apprentices to accumulate starting-capital. Work conditions and pay are generally poor. Soldering, brazing, polishing, and buffing expose the workforce to cadmium and airborne oxidants that are known to attack lung function (see Moitra et al., 2013; also Sumeetha, 2012). Research has shown that as recently as 2012, wages from, and returns to, goldsmithing varied throughout the country—from close to the poverty line in West Bengal to three times greater than that in Kerala, considered the apex for wages. This wage gradient has incentivised the ongoing flow of North–South migrant gold-workers (Sumeetha, 2012). 27
There are heated debates over the question whether the workshop form of production is collapsing into precaritised wage labour exploited by factory capital; whether its appearance of independence, often romanticised as patronage involving the supply of raw materials, disguises wage labour; or whether it persists, and will persist, in a dialectic between autonomy and exploitation. In this last case, a contradictory form under the logic of capital, the producer embodies both capital and labour, is exploited on markets other than labour but with a degree of independence (Harriss-White & Ali Jan, 2019). In India’s gold system, karkhanas demonstrate all three forms of petty production.
Gold workshops are massed in industrial clusters; some of which are concentrated, such as in the labyrinthine Zaveri bazaar in Mumbai, where an estimated 20,000 goldsmiths practise their craft, or Kolkata, where there are 5,000 workshops, or the region of Thrissur in Kerala, where there are thought to be some 10,000 workshops employing, or subcontracting to, 45,000 artisans, many of whom are long-distance migrants (Sumeetha, 2012). Most gold clusters are unusual compared with other specialised clusters; first, because they are not specialised by type of gold commodity, and second, because they are found commonly throughout mofussil small towns. They also may not exemplify the economic synergies of clusters: agglomeration economies, pooled skills, technological spill-overs, and collective efficiency. Indeed, in cases where their internal structures are caste-stratified, and where guild associations are localised and diverse, their schisms weaken collective resistance to labour displacing mechanisation. 28 In our volume’s case of Bengal, migrant smiths remain regulated through guilds and business associations rooted in their villages and regions of origin. While the rigid regulative structures of caste-occupation have been dissolving, these guilds have managed to continue to regulate entry and arbitrate disputes, offer social solidarity at moments of distress but do not prevent displacement and differentiation (Kanungo & Chakrabarti, 2024; Nayak & Chakrabarti, 2024). The internal integration of malik and karigars, with their close yet unequal ties of ‘trust-based’ patronage, in which the karigar is provided with raw materials and collateral-free cash, is yielding to outsourcing, often to cheaper migrant labour, which is more profitable. While some waged craftsmen manage to claw their way to ‘self-employed’ or even ‘employer’ status, increasingly insecure karigars, freed from both patronage ties and trust, freelance on piece-rate subcontracts to a series of small workshop owners.
Mechanised Manufacture
Four social processes now account for about 35 per cent of India’s jewellery, even so providing livelihoods to perhaps 2 million industrial workers, including some women. First, the mechanisation of each of the many stages of crafting has been grinding away for the past 70 years. Machines for plate- and wire-making, for cutting dyes, and for stoking charcoal fires, were the first, and for a long time the only machines used in the industry. But since 1990 all stages of crafting have been mechanised and lively markets for second-hand machinery have been created. The scale of output of units of mechanised production may multiply in deliberately miniaturised forms below the threshold for regulation by labour laws. 29 Second, owners of workspaces rent it out, enabling ‘independent’ karigars to bring machines and congregate on a job-work basis—effectively ‘insourcing outsourcing’ (Harriss, 1982; also see Ruthven, 2008). Third, sometimes an integrated wage labour force is employed in a mechanised gold factory, though this is less common in real life than in textbooks. Fourth, a step-change in scale has occurred with the entry of corporate ownership and management of mechanised and factory-ised production, discussed later with the ‘corporate retailing’ integrated into these companies.
The continual expansion of somewhat income-elastic demand, together with India’s deep social segmentation, enables the co-existence here, as elsewhere in the gold system, of institutional diversity, fast-paced innovation alongside technological stagnation, and dwarf and giant firms. This social segmentation enables not one but two expansion pathways: first, the classic route of accumulation, concentration, and centralisation of capital—even as sites of transactions disperse—and second, the multiplication and diffusion of small units using capital from savings and loans, marriage transfers, and inheritance. 30
Trade and Retail Sales
No-one knows precisely, but about 400,000 ‘jewellers’ are thought to account for about 1.3 per cent of Indian GDP. The latest data are simply suggestive of the final stage of trade in gold and gold jewellery: about 80 per cent of traders are small independent family firms; by another measure, about 60 per cent are unorganised; by yet another, about 70 per cent of gold sales are in ‘rural towns.’ Some merchants are intermediaries making wholesale transactions between karigar and the other parts of the jewellery industry, while others broker ornament sales on commission. In practice, anyone working in any part of the gold system may retail gold, so that the retail gold trade is enmeshed with crafting and manufacture, and with moneylending and pawnbroking.
As with refining and manufacture, the survival and transformation of ‘small independent retail’ gold businesses are threatened by the dramatic entry of corporate retail. The migrant Subarnabaniks of West Bengal, for instance, once the aristocracy of gold crafting, exemplify the dynamism of small-scale commercial capital. Over the decades since independence, Subarnabaniks, economically traumatised by Partition, stripped off their caste-exclusivity thanks to intense competition within the motley layer of corporate capital, merchant capitalists, maliks, and commission agents, abandoned crafting activity and their trust-based patronage of the craft workforce of karigars. Those with capital developed a specialised trade in gold for specific rituals, castes and localities. Some also migrated. Others without capital have reacted by developing pawnbroking and lean-season gold repairs along with small-scale retail trading (Nayak & Chakrabarti, 2024), while yet others have lost their livelihoods.
Meanwhile in this century a step-change in corporate commercial competition has been accelerating into the countryside from metros: increasing their market share from 10 per cent in 2017 to 20 per cent in 2020. Either production-trade processes are being vertically integrated, or outsourcing is being systematised into their corporate brands. A new retail culture is being engineered and diffused for gold. Providing purchasers with armed physical security, airconditioned comfort, and anonymity, corporate jewellers often demand cash to avoid default. The business literature distinguishes three kinds of corporate gold. First, and three times more important than the two other kinds of corporate competitors, is regional gold capital. These market leaders have cornered firm-specific innovations such as antimicrobial jewellery, jewellery for men, and e-commerce jewellery platforms. Second, comes national specialist corporate capital, which also ‘competes by not competing,’ 31 carving out markets for instance by hallmarking, by especially high-quality design or lightweight exports. Third, is the diversification into gold retail of large non-gold corporates developing e-commerce, exporting, and financial innovation. A client industry of advertising and promotional films on digital media that is tied to these firms exemplifies the careful social construction of brand demand and brand love targetted at the educated urban middle class of technocrats and professionals (Nim et al., 2022).
Consumption–Deployment
While India resembles many other countries in the composition of its public reserves, it is unique in the quantity of ‘private’ gold reserves held by households. It is the consumption of gold in India that most clearly shows its uniquely protean quiddity. Though its consumption is recognised and categorised in official statistics, gold is hardly ever consumed in ways generating waste (only in food, dental crowns, and cremation gifts to souls via their bodies). 32 For the most part the concept of ‘consumption’ launches us towards the questions of the uses of gold and the circuits in which retailed gold is deployed.
Gold as Working Capital
Nowhere is this more prevalent than in rural credit, where land and asset ownership have long served as initial screening criteria of eligibility to borrow; in recent decades household stocks of gold have been normalised as flexible loan collateral for short-term income smoothing. The need for loans to smooth out income is partly seasonal or arises from shocks (especially health shocks), or from a pressing need to cover costs of production, especially labour or raw materials, or for ‘consumption’—which in such households is overwhelmingly labour needed for production. Dalits, until recently forbidden to ‘consume’ sacralised gold, are now secularising its use through exchanges and pawnbroking for all these productive purposes, as well as for transfers at marriage. Small-town field research on the use of gold for silk reeling—the ritually impure stage of silk production 33 —finds that gold is pawned both for day-to-day cocoon purchasing and other production needs and for medium-term investment. In 2002, when sales of yarn produced by reeling was overwhelmed by the sudden arrival of cheap imports from China, the kinship enterprises that weathered the shock were able to do so partly through their possession of pawnable gold (Joseph, 2024).
Pawnbroking of gold has also compensated in part for the retreat of rural banking, though for dalits and for lower caste women, formal banks hardly ever existed in the first place. 34 The Network, Employment, Debt, Mobility and Skills in South India (NEEMSIS) survey of 2016–2017 in rural Tamil Nadu (Guérin et al., 2024) found that 90 per cent of women have gold; and that 75 per cent of women had pledged gold in contrast to only 4 per cent of men. Women are also responsible for the repayment of the dozens of loans constantly being juggled and rolled over by such households, so much so that it has even been suggested that loan management is part of the female reproductive burden—a treble burden (Guérin et al., 2023; Reboul, 2018). The value of gold as collateral is not directly related to spot prices, which vary with its form (for instance an ingot versus an inherited necklace). Pawners and debtors set off the ratio of value-to-loan, which is higher in the informal money economy than for bank loans, against the transactions costs of speed (faster than banks), privacy and security (where bank managers are not always trusted), and against the interest rates charged (considerably higher than by banks). Pawnbrokers’ interest varies between 25 and 50 per cent, in socially determined ways depending on purpose, urgency, and season, and the borrower’s gender, occupation, assets, caste, and social status, and their individual household’s reputation (Guérin et al., 2024).
Formal Institutions
From the turn of the millennium banks were permitted to lend against gold, and in 2012 they were also released from priority sector lending rules; gold bank loans were soon seen as an invasive market, predicted to grow from $35 billion in 2019 to $53 billion in 2022, and expected to comprise a third of all gold loans especially important in South India. Yet in 2019 the global accounting and management services conglomerate Klynveld Peat Marwick Goerdeler (far better known as KPMG) calculated that gold loans from banks and non-banking finance companies (NBFCs) had involved only 5.5 per cent of India’s household gold holdings, much of it being used for agricultural investments by richer rural households (KPMG, 2020; and see, Guérin et al., 2024). Field evidence suggests that while at one extreme registered NBFCs have transactions costs advantages over banks, at the other extreme, smaller unregistered moneylenders are still able to eat into the banks’ planned loan shares (Guérin et al., 2024). Even in the era of corporate financialisation, for gold loans, as for much else, small can be powerful 35 as well as beautiful.
Saving and Investment
For short-term savings and longer term investment, whether speculative, inflation-hedging or both, gold has greater security than do banking instruments involving money. The NEEMSIS project and research on Malabar gold, both reveal gold as significant not so much for aesthetic reasons and status alone but rather for what ‘social security’ means in practice for them: relational saving (using gold exchanges to maintain social and emotional ties with others), and reproductive saving (deploying gold over time to bind and ensure the welfare of kin). Other things, notably household income, being equal, dalits are found to engage in relational and reproductive savings more than non-dalits (Guérin et al., 2024; Mujeebu Rahman & Chakrabarti, 2024). Their world is far removed from the digitisation of gold and the emergence of cryptocurrencies in which the value of gold is dematerialised.
The relationship between gold and money reveals that neither gold nor money is universal and homogeneous. Instead, as argued by David Graeber (2011) and Keith Hart (2000), they have social characters and are instituted not only to express relations of life-cycle, status, occasion, and hierarchy but also to enable and protect business and work.
Religion and the Household Life-Cycle
As the homes of poor Indians start to bristle with new protective locks, gold ornaments and jewellery circulate in and between both Hindu and dalit households as gifts and as expressions of reciprocal services. Further, for Muslims, gold circulates as a medium of charitable donation—zakat (Guérin et al., 2024; Joseph, 2024; Mujeebu Rahman & Chakrabarti, 2024).
Reproductive saving for marriages illustrates the language of gold in relations and values of kinship. Four-fifths of Indian weddings require dowry, nominally vested in the bride but often transferred by the bride-givers to bride-receivers, 36 and all dowries require gold. Half of India’s gold imports are thought to end up as dowries. But while the value of dowries may extend to burdensome multiples of the bride’s household’s annual income, the measure of value at weddings tends to be the quantity and type of gold, rather than its market value. 37 There is much caste- and class-specific variation in the forms and practices of gifts between bride-givers and receivers (see also Anukriti et al., 2021a, 2021b; Guérin et al., 2024). Gifts from bride-receivers to the bride may include ‘heavy’ or ‘family’ gold passed down through the women in patrilineal systems. Other ‘new’ gold is given to daughters leaving their natal families.
In communities following Islam, such as Kerala’s Mappila, where moral prescriptions from the sharia regulate gold transactions, gold is deployed in reproductive saving through mahr (money/property/substance a wife receives from her husband for their marriage under Islamic law) and hiba (a voluntary gift from one living person to another under Islamic law). In the form of gold jewellery measured against standards of wealth, eloquence, dignity, beauty, and age, mahr cements affinal ties and validates the nikah (the marriage under Islamic law). Gold worth multiples of the mahr forms hiba, vested in the bride by her family and cements natal ties, though there are instances of crowd-funding for poor couples. A kinship substance, the gold in mahr and hiba is sold only as a very last resort. It is pawned for socially valuable purposes—the hajj, a house, business needs. 38 Though marriage gold is vested in women, we see from the circuits of pawnbroking that men of both religions frequently gain access to it and control its deployment (Joseph, 2024).
In both the subcontinent’s two great religions, gold is hard-wired into rituals. Rather than being ‘pre-capitalist outliers’ or a part of a separate non-capitalist ‘needs economy,’ these gold-dependent practices are integrated into the modern capitalist economy.
Temples: Godliness and Goldiness
That temples store, in total, somewhere between 2,500 and 5,000 tonnes of gold, is evidence enough for their autonomy from the state which periodically tries to seize or tax it. At the same time the example of the history and inauguration of the Ram Lalla temple in January 2024 shows how the Indian state has grown ever closer to the religion of the temples.
Deities and temples are adorned with worked gold and gems, gold laminates gopura (the gateway to a temple), roofs and doors; it is entombed in vaults. Amassed through donations, gifts, rents, and ‘feudal’ dues, fines, and fees, through loans and transactions in land and property, temples accumulate gold. Temple gold coins are sold as mementoes and currencies in religious micro-economies. In five of Sri Padmanabhaswamy’s six vaults in Kerala that were unlocked in 2011, gold and gems were found dating back to the Roman Empire. In 2020 the Supreme Court decreed that what is left of the Travancore Royal Family has authority over this treasure—setting a precedent for other temple hoards. For millennia, as Chakrabarti (2024) concludes, the spiritual rewards for sequestering gold in temples have exceeded the value of any economic or social use for it.
Re-Exports
Sales of gold bars from refineries have been increasingly disincentivised or banned; jewellery, plain worked gold and crafted medallions, all of which add to the value of gold, are the state’s preferred form of export: 23 tonnes were exported in 1995 but in 2018, 160 tonnes were sold abroad, valued at $12 billion. Exports are now forecast at $35 billion. With about 2,500 exporting firms, India is increasingly a global hub, ranking fourth in the world’s gold markets.
From the fast-expanding hub of Dubai, and from Doha, Indian-worked gold heads to the USA, Europe (Germany), South-East Asia, and China. Dubai being the fulcrum for both imports and exports, facilitates the round-tripping of laundered gold in order to make use of export incentives, duty-free gold replenishment, and concessional bank finance. To the extent that round-tripping accounts for the bulk of the gold trade, as is widely alleged, official gold data are unreliable (Sreekumar, 2024). 39
Policy
It has been possible to present an account of India’s gold system with little reference to policy or the state—official reserves, import policy, and gold loans being the obvious exceptions. For the Indian state, imported gold has always been a headache—a drain of foreign exchange. And stockpiled household gold has always been regarded officially as idle assets diverted from productive purposes: public and necessary things being forfeited for private and luxury things. Morarji Desai’s vision of India in 1962 was one without gold-festooned marriage rituals and hoarded gold. The two related deficits, drained foreign exchange and unproductive domestic resources, underpin the political quiddity of gold.
Gold Policy and the Drain of Foreign Exchange
The Gold Control Act, 1962, which recalled all gold loans given by banks and banned forward trading in gold, was the government’s classic attempt to sequence the regulation of international and domestic trade in gold, control imports, contain smuggling, and prevent hoarding. In 1963, it banned the working and sale of gold finer than 14 carats. In 1965, it launched the issue of gold bonds with no questions asked by tax authorities about the purchasers’ wealth (Kanungo & Chakrabarti, 2024). The Gold Control Order (GCO) of 1968, first appearing as amendments to the Defence of India Rules, introduced licences and control of inventory as domestic instruments of gold policy (Harriss-White, 2024).
These policy measures are widely accepted as textbook cases of spectacular backfiring. Their complex paperwork was incomprehensible to illiterate people and mystifying even to those with basic education; paper trails of transactions jarred with the verbal culture of most commerce; getting licences took time, contacts, and bribes. Some unlicensed dealers collaborated informally with scarce licensed firms, whose market power was thereby enhanced. Raids on businesses by a new class of vigilance officials from excise departments, Gold Control offices, and District HQs, were poorly coordinated, poorly informed, and mostly experienced as punitive. While a few hundred bankrupt smith-traders committed suicide, more exited gold. By the 1980s as much as 80 per cent of gold imports were being smuggled; they then flowed underground into the black economy, where higher quality gold was worked and sold in domestic premises. The long shadow of this structural and political accommodation still falls darkly on the present.
To a considerable degree, gold policy has been an import policy. This also casts a long shadow. Although gold policy is regulated by finance bureaucracies, gold trade is dominated by Dubai, where nearly 40 per cent of the population is of Indian origin, so that gold import policy is part of a foreign policy repertoire, dominated by trade concerns. Preferential duties and quotas for gold are set by political, trading, dollar-resisting, educational, and cultural interests, and sealed by diplomatic agreements between the UAE and India. But since the capacity to enforce rules has often been compromised, selective or weak, evasion has established and reinforced the black market in gold that facilitates gold-based money laundering.
Gold as an Idle Asset
To make hoarders release their gold they need to be given incentives to monetise it in ways that will not increase demand for gold or raise inflation. After the financial crisis of 2008, the Indian government gave up trying to restrict the holding of gold and attempted instead to formalise and monetise it. Monetised gold bonds were periodically issued and taken up by the 3 per cent of households that were active in the stock market; tax breaks were offered for refiners (advantaging the largest), and a gold spot exchange has latterly been given the green light. Private spot markets with varied mark-ups have also emerged. Low denomination gold coins, with quality assured by the RBI, have proved popular for birth, festival, and marriage gifts, being versatile for both investment and as raw material for jewellery, but the need for paper trails for these coins discourages large-scale holdings of them (World Gold Council, 2023). In 2015, hoping to recycle hoarded gold as official loan collateral, the Indian government introduced the Gold Monetisation Scheme (GMS), 40 but to negligible effect. Excessively specified and selective, this scheme has done no better than previous attempts to monetise household gold.
Gold Policy and Social Development
Policy analysts mostly write about the writing of policy, in terms of policy intention, ‘design’ and formulation, and about the data that is needed to feed into the designing of production incentives, taxes and duties, market regulation, financialisation, skills, and technology—which are Niti Aayog’s subfield templates for contemporary gold policy (NITI Aayog, 2018). 41 Were that kind of data consistently available (which it is not), these policy labels and subfields would then have to be mapped onto the reality of the multiple interlinked activities which the quiddity of gold involves it in (which they are not).
Policy analysis of the Niti Aayog/KPMG-kind tends to be discursive and chronological, but if policy is also what policy does in practical terms (Schaffer, 1984), then the relation between policy and social development needs to focus on practice and outcomes. Policy analysis oriented to social development outcomes must work iteratively—forwards from policies to impacts, and backwards from policy impacts to policies. There is space here only to illustrate this approach through some of the themes and examples in our book Gold in India. 42
Non-Policy as Policy
As Polanyi (1944) observed, in order to function, the free market has to be regulated. Is gold regulated in a distinctive way? Much of the gold economy has been left alone in practice. This may be an active policy choice as much as an admission of defeat. Common in India and permeating the gold system, self-regulation by local business associations and guilds is structured by the commodity forms gold assumes, and further by occupation, party politics, religion, and patriarchy. Above all still by caste. These socially corporatist local associations can screen entry, organise skilling, guarantee livelihoods, limit contractual impropriety, and mediate disputes; organise credit, sites, marketplace space, and compensation for accident/distress; represent the collectivity, react to threats from the state and repel state intervention. And in regulating the gold economy these guilds and associations negotiate particularistic interests which serves to empower local gold-capitalist elites. The mass of small producer-traders may free-ride on the results, or even be allowed into gold-trade associations, but they do not set their agendas or influence outcomes which are just as likely as not to threaten them.
Selectivity and Super-Specification in the Scope of Policy
Practical constraints may emasculate policy even at the formulation stage. For example, hallmarking for gold purer than 20 carats has had to be selectively confined, even in law, to firms with gross outputs exceeding ₹40 lakhs (4 million), in a few districts where there is assay technology, and with exemptions made for forms of gold such as watches, pens, and the very gold jewels for re-export that hallmarking was intended to support. In this case, rules requiring self-declarations also embody such acute conflicts of interest as to incentivise noncompliance. As a result, only about a tenth of India’s jewellers are registered for hallmarking, as yet to little purpose. Excessive specification has other effects. For instance, the detailed nature of import duties, and constant changes in and exceptions to them, do little but incentivise evasion.
Effects of Instability
Gold policy is distinctively unstable. Twenty-first-century U-turns have been swept by tides of financialisation in which de-regulation has proved to be re-regulation. Roller-coaster amendments to de-restrict licencing, customs duties, caratage and hallmarking, and amendments to import–export policies, test enforcement capacities and, since large firms are more easily inspected and taxed than the mass of small firms, policy instability differentiates the gold economy. A case in point is the 2012 change in doré import rules, which required importers to export 20 per cent of its value and which, after the confusion between doré and gold in definitions and valuations that froze the industry was resolved, vastly increased the transactions costs of small firms and led to the closure of quite a few smaller refineries (Mayenkar, 2013).
Unintended Outcomes
We saw with the 1990 GCO repeal that gold smuggling was reduced but did not stop, swelling whenever import duty was raised, and continuing to use gold as a vehicle for money laundering. The repeal also increased gold supplies, but the domestic price did not drop because demand surged for gold as loan collateral. In turn, this attracted a flood of new entrants into markets which reduced profits and led to bankruptcies. Yet gold policy has never been officially intended to bankrupt compliant firms. Similarly, when banking was liberalised, starting in the early 1990s, rural banks closed but gold loans did not become a purely urban affair. Instead, a vast diversity of rural lending institutions proliferated and unregulated rural pawnbroking was consolidated.
After the thunderclap of demonetisation, gold holdings were hunted down for proof of ownership to increase the Indian government’s ability to borrow against gold reserves (officially intended for infrastructural projects), but lack of documentation of origin derailed this policy too. Demand for gold was reduced, but only due to delays in the re-issue of banknotes to pay for it. GST reforms also met artisanal resistance to paper trails for gold, thanks to the diseconomies of small scale combined with the lingering verbal culture of commerce. The requirement in 2020 to produce records of all cash transactions over ₹10 lakhs (1 million), did nothing but incentivise black gold. Requirements to digitise have similarly led to exits into the informal economy.
In fact, so regular are unintended outcomes, and so predictable are their contradictory effects, that the very concept of policy intentionality needs questioning.
Policy Fields and Indirect Multiplier Effects
The case of small-town gold in South India reveals the important general insight that a policy in one field can have impacts on a quite different sector. We saw earlier that when barriers to silk yarn imports were removed in 2002, Chinese silk yarn flooded India at prices below the domestic cost of production. Local yarn prices slumped, and it was only small firms which had stored gold for pawning for working capital in order to buy cocoons that were able to tide over the period before India instated tariff protection against ‘dumping.’ Many small silk yarn reelers with low gold stocks were bankrupted (Basu, 2024; Joseph, 2024).
Policy and Enforcement Capacity—Unimplementable Criminal(ising) Law
When in 2020 gold worth $120 million was seized by vigilance authorities and paraded as a triumph, this was just 1 per cent of the $11 billion estimated as smuggled, and better be seen as evidence of the failure of enforcement capacity. By contrast, the 2016 regulation of hallmarking to homogenise quality for gold above 20 carats, faced with the lack of assay technology and of competent vigilance officials in more than a third of India’s districts, proved unimplementable. So was the 2018 imposition of tax at source for large borrowers with physical gold collateral over a ₹1 crore (10 million) threshold, which led to acute clogging and eventual closure of the internet portal for applications for exemptions. In a 2019 collection of nine ethnographies of the criminal economy, we (Harriss-White & Michelutti, 2019) showed that, deliberately or through incompetence, policy and law that is festooned with complex amendments, that assumes unrealistic standards of evidence, and that the court of public opinion deems to be socially unjust, almost inevitably leave loopholes for criminal evasion. To this list we can add, from the history of India’s gold system, policy and law that are unfeasible to implement or are formally selectively enforced.
To Recap
While policy documents may very occasionally and reluctantly concede failure, 43 policy failure, like market failure, rests on a misleading binary born of economics. Policy is a series of processes, from conception to implementation, sedimented as in contorted geological strata. Gold policy is no exception. The politicised processes of selective enforcement and compliance are much more complex than what is captured in the binary of formality and informality (the latter defined by thresholds below which regulative law is waived), or the distinction between the legal economy and a criminal economy (in which regulative law is flouted), not to mention the inseparability of legal-regulable, informal, and criminal activity inside a given firm, sector, or town.
Social Development and Policy
Our systems approach has revealed a public policy obsession with certain aspects of the quiddity of gold and not others—not about its origins, not about the effect of its physical transformations on the environment, not about the implementation of policy itself, not about multiplier effects beyond its official reach, not about its gendered effects on social development, not about its social relations of production, or the quantity or quality of livelihoods or standards of living of its workforce or the redeployment of displaced goldsmiths. We have also seen the power over the shaping of gold behaviour vested in non-state structures and institutions which policy documents tend to ignore. As with business associations and caste guilds, they may be legally recognised; or, as with kinship, they may be customary; or, as with cartels, mafia, and gangs, they may be criminal. The unregistered, informal, day-to-day gold economy is as invisible to policy-makers as are the non-economic ways in which gold is so often finally deployed. For example, to encourage formalisation, the Indian government planned to make a 12-per-cent contribution towards employees’ provident funds for the three years from 2020 for all new jobs across sectors. But all the old jobs were ignored, so hardly any of the 8 million gold workers would gain provident funds. As with hallmarking, so with labour; the government of the liberalised state actively segments and differentiates a market which it claims to want to make efficient.
Policy is a political process involving political decisions, laws, and resources which are financial-, technological-, and personnel-based. At all stages, society affects policy and is affected by it, intended or not. Often when it is implemented as intended, and usually when it is not, regulative policy hits small units of self-employed artisans and traders, their family labour and tiny wage labour forces. Yet for better or worse, they are the building blocks of India’s economy and form the basis of citizenship.
We see from gold that if policy design were to broaden itself to admit the institutions needing to be in place for policies to work as intended, if policy design were to accept that policy is contested and disruptive, and if it were to mainstream policies to deal with anticipated hostility, it would be written differently and policy bureaucracies would also be structured differently.
Reflections
What does an individual thing like gold connote? How can an individual thing like gold deliver any aspect of social development? Even though we are confined to a definition in English and are developing it by reading through the lines of literatures with purposes other than quiddity, we can no longer sustain the argument that it does not matter! What does our systemic and relational approach add? As in all systems research, the answers here are provisional (Meadows, 2008).
Commodities achieve economic and social meaning not just by their physical attributes, not just by their end uses, but also by the ways their production and trade are organised and their workforces are exploited.
System
The systems approach, being relational, reveals the quiddity of gold in its interaction with distinctive other things (e.g., silk), other markets (currency), market and non-market exchange (ingots and mahr), a range of technologies (refining, gold from e-waste, gutter, and ghat), spatial and jurisdictional forms, shapes, and scales (India and Dubai).
Being stylised as a set of stages, the systems approach to quiddity encompasses transformations in physical forms and properties, and the socially constructed status and meanings unique to gold. Think of doré and sludge, the roles of caste and gender in managing gold for silk reeling from cocoons and in pawnbroking more widely, caratage status and crime, the status of work in gold crafting alongside that of iron, silver or brass. Consider temple rooftops, the mukut (crown) of statues of deities, necklaces for dalit women, official reserves and private cryptocurrencies, money laundering. Think of the fragmented markets at all stages, of contracts ranging from remote and (apparently) ‘impersonal’ investment and trading markets to relational reciprocal exchange. Think of the versatility of gold as proxy-money, in loans, barter, gifts, and donations that bind male control over female sexuality (Geetha, 2024), kinship and friendship.
The systems approach, being also historical, shows how even the physical dimension of quiddity is a social-technological product. With technology being able to generate extreme temperatures, for instance, gold is confirmed in labs to harden rather than melt, with uses still to be found.
Systems have arbitrary spatial and conceptual boundaries. Gold laughs at territorial borders, requiring the networked port of Dubai among others not just to act as a generalised labour sponge but also to operate as an offshore haven for financial services essential for gold-based moneylending. Within these boundaries, lived-in gold regions have their own less well-understood quiddity. In the South, gold makes up 25 per cent of average household assets compared with 5 per cent in the North. Even among the poorest and lowest status rural people gold plays fundamental social roles, whereas towns-peoples’ consumption of gold more resembles China’s. In the spatially compressed clusters of gold, intense specialisation co-exists with versatile ‘common’ clusters.
Quiddity Universal to Indian Commodity Economy
Contrary to the assumptions of economists, the study of gold reminds us that all markets are social constructs with institutional characters. 44 The co-existence of polarised structures (oligopolies/local monopolies and petty forms) of scales and size distributions of firms, of a range of technologies, of forms of organisation, and their distinctive expansion trajectories are not unique to gold. Family firms/kinship enterprises with family labour, a small core of regular employees with ragged work rights and an ever-expanding force of casual labour and subcontracted self-employed craftsmen with no work rights at all, are all normal in India. That the poorest livelihoods and poorest work conditions go together is not special to gold. Workers entitled to state-mediated social transfers through citizenship but not through work are also found everywhere. That all classes and conditions of people are engaged with gold is not unique to gold. That demand for gold only increases over time does not distinguish it from food and other wage goods, though gold is not (yet) itself a wage good.
Nor is the experience of public policy for gold as one of the ‘dozing horrors of public life’ (Keegan, 2024, p. 36) confined to gold. Gold policy shows selectivity in its treatment of quiddity. Its subfields and labels resonate with those imposed by international policy wonks and are not necessarily relevant or even understood throughout the actually existing system. Policy is prone to be designed with little serious attention to implementation in all fields, and the efflorescence of corruption when selective enforcement capacities confront selective compliance is far from confined to gold.
Gold Quiddity Unconfined to India
The security gold affords is a powerful reason for its global prevalence. Since the ‘trust deficit disorder,’ identified in 2018 by UN Secretary-General António Guterres, has grown in step with financialisation, there are very few countries that do not have at least some official reserves denominated in gold. The gold composition of India’s reserves resembles that of other developing countries, as do the places where they are stored (closely protected from physical theft, though less of late from politicised seizure). Meanwhile, private holdings of gold grow on trend and the RBI acts like other central banks in issuing programmable digital currency based on the value of gold, as do algorithmically charged cryptocurrencies based on the idea of gold worldwide.
The Quiddity of Indian Gold
The production of gold is highly polluting yet the product finds its place at the heart of Indian civilisation. Gold links the intimacies of household mattresses and women’s necks and wrists with barbaric and environmentally toxic production conditions on the other side of the world. The status of gold is contaminated—in mining and refining, and in the recycling of its by-products and its waste—by the diabolically exploitative and filthy conditions of work, such as those captured by Sebastião Salgado’s photographs of the danger and violence of the Serra Pelada mine in Brazil (Burgess, 2019; Salgado, 1986/2019). In transit, much gold is smuggled, thriving in the semi-criminalised part of the Indian economy and protected by the threat of violence. Adulterated gold and spurious substitutes looking like gold are also objects of crime backed by the threat of force. Such ‘black’ gold has real negative effects on price volatility, on growth and investment, on bureaucratic and political corruption (Roy, 1996; Sreekumar, 2024). Yet this ‘blackness’ does not contaminate the social meanings of gold at its points of consumption.
At its destination, gold is at the top of a moral hierarchy of goods. Demand for it does nothing but grow, proof against all attempts to limit it. While some 16 per cent of private gold is immobilised in temples, the rest of the gold ‘consumed’ is not ‘not productive.’ Endowed with spiritual qualities, gold weight is the accounting unit for exchanges in life-cycle rituals and festivals, while on the other hand, gold is just as regularly pawned for working capital and consumption purposes.
Most gold is property vested in women, yet the long-term mobilising of burdensome moveable goods for marriage transfers, in part in gold, has been widely invoked as contributing to the low relative status of women, to anti-female health practices, to constraints on women’s autonomy and even reduced life chances. 45 We see the quiddity of gold as embodying many contradictions.
The systems approach shows how the quiddity of gold results from the context-specific combination of certain attributes that are universal in commodity economy, some being universal to gold, some universal to the Indian commodity economy, and some inherent in Indian gold. This understanding of quiddity is more complex than that of the orthodoxy described earlier. Ignoring it will not make it disappear.
Gold and Social Development
Social development, the capacity to be and do (Sen, 1985), results from the development of a range of relations making up economic, political, and social citizenship. Gold is rooted in these relations. It counts in economic citizenship because purchasing power depends on returns to work. Though there is no systemic study of profit–wage relations in gold, our case material strongly suggests that most direct producers, whether waged or self-employed, work in poor conditions and are not paid decent wages. Poor and socially disadvantaged Indians have made a dramatic entry into the gold system, turning a luxury into a necessity as consumers and users of gold. Gold business researchers know this as the ‘democratisation’ of gold. Gold matters in political citizenship due to policy decisions which vary from making migrant gold-working artisans ineligible for non-work-related rights to the deliberately selective regulation of much of the gold system by means of which non-citizen gold-carriers cross borders to swell the profits and assets of citizen-magnates. It matters for social citizenship because the moral economy of gold which orders affective and reciprocal exchanges has the power to thwart the aims of regulative and fiscal policy.
Gold affects social development in ways that are not distinctive or confined to gold: its quiddity simply ensures that if any commodity does so, gold almost always does. Thus, the stage-specific and polarised structures of the gold economy ensure profit based on labour processes involving millions of artisans with pay and conditions far from ‘decent work’ standards, whose insecurity is also exacerbated in illegal circuits and activity. In the self-regulation and representation of gold businesses, the gold associations’ agendas are set by local elite firms and exclude workers from membership, plans, or political objectives. In its social segmentation, the gold economy leads to two broad trajectories: accumulation through differentiation, which consolidates a wage labour force; and, expansion through multiplication, which consolidates self-employment and kinship enterprise.
Gold policy sees the bulk of the workforce in terms of the binary categories of formal–informal, in which unregistered workers are for the most part left outside the scope of policies for the use of standard labels and market instruments. Yet in so doing, policy incentivises pre-emptive and evasive development rather than structural institutional support. There is no implementable policy project for self-employed artisans and for family businesses too small to qualify as ‘micro’-enterprise.
We see gold as distinctive in its effects on anti-social development. It is unique in the extent and global sprawl of its criminal economy, whose epicentre is inside India. It is distinctive, too, in the chemistry of the toxic pollutants that are generated at most stages of the gold system, and the public health risks they pose.
To Close
From the quarrelsome family of theories about things with which this essay begins, we find support for the idea celebrated in Thing Theory that meaning is context-specific. Stretched over the system of gold, our evidence also supports the implication of Marx’s theory of commodity fetishism that the forces and relations of production are essential to an understanding of the social role of a commodity. But, turning his argument on its head, we see that the particular social fetish of a given commodity may also affect its forces and relations. To disenchant society of the fetish of gold alone would need social planning of a different order than is possible under India’s capitalism.
We see that as a heuristic device, quiddity has proved useful. In the case of gold, there are other commodities with partial attributes like those of gold, but none with its distinctive set that make up its quiddity. We are left with the hypothesis that any given commodity or thing has one or more subsets of physical and social attributes common to certain other commodities but has one subset that is unique to itself and another subset unique to a given society, and that the combination of such subsets is unique. For gold, this unique combination of commoner and specific quiddity is an entry barrier to other metals and materials. It is what makes them non-substitutable.
The world is full of things: ‘more of it than we think, incorrigibly plural … I … feel [t]he drunkenness of things being various,’ wrote the Irish poet Louis MacNiece (1967). The sober pursuit of quiddity is a comparativist project. Our workplaces, our homes, our consumption-, leisure-, and waste-territories are full of commoditised stuff. Let us think more systematically about its physical properties, its economic and cultural fascinations, the stories it tells, what it ‘does,’ what we do with it now, and what we might do in a transformed future.
Footnotes
Acknowledgements
I am grateful to the Council for Social Development (CSD) for their encouragement over this essay, in particular to CSD President Muchkund Dubey, who chaired the lecture, for his responses to it, to Social Change Editor Riaz Ahmad for his painstaking review of the draft text, to the enterprising teams at CSD and Sage India and to the Zoom audience for penetrating and engaged responses which have helped me revise this essay. I am also grateful to Professor Anindita Chakrabarti and to the dedicated team of researchers who have helped create our book, Gold in India (2024, CUP).
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The author received no financial support for the research, authorship and/or publication of this article.