Abstract
This chapter contributes to theories of clustered development by developing an empirical study out of a critique of the literature on industrial clusters. The character of spatial clusters depends on the social characteristics of commodities as well as technologies and flexibly specialized firms. The much-vaunted agglomeration economies are found to need to be qualified by theorizing clusters as riven with conflicts and contradictions. Collective action is framed as representing material interests within the cluster rather than the cluster itself as a homogeneous entity. Stanley uses field research from 2002 on a commonly found (rather than specialized) cluster—that of gold ornaments—whose structure and development are used to challenge the orthodoxies of clusters theory. The impact of two dramatic recent developments in policy—the deregulation of gold and its mechanization—is traced, together with the regulation of rising quality standards and hallmarking. Rather than emerging from minimal state intervention as assumed in the literature, the gold cluster is seen to be shaped indirectly by a set of state policies on regulation and technology whose ambivalent effects are analysed here.
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- 1.
Arni Taluk, which includes the town of Arni and 52 nearby villages, had a population of 246,373 in 1991.
- 2.
Bullion dealers speculate on gold by buying, hoarding and selling once the price rises.
- 3.
The primary destination of gold imports and recycled gold in India is the gold ornaments industry. Estimates of the proportion of India’s total gold demand that goes to the ornaments industry range from 78 (Vajpeyi 2002) to 85 % (Jagannathan 2001). Of the 13,000 tonnes of gold in the country, an estimated 10,000 tonnes are held privately in the form of jewellery (Deshpande 1999).
- 4.
The tali is a wedding necklace, placed round the neck of a bride by her groom in most Hindu marriage ceremonies, and worn throughout life by a married woman. The size and design of the tali, as well as the number of pendants attached, differ depending on the caste and wealth of the marrying families (Brouwer 1995, p. 131).
- 5.
In 1980–1981, North Arcot District’s Net Domestic Product (NDP) per capita was Rs. 750 (Ramasamy et al. 1991, p. 11), while the national average was nearly 2.5 times higher, at Rs. 1,816 in 1980 (World Bank 1983). The real output of the region is quite a bit higher than this, as black market activities appear to equal or exceed output in the formal sector (Basile and Harriss-White 2000, pp. 12–13), yet the black market is a reality throughout India so this does not change the fundamental point that Arni is poor by Indian standards.
- 6.
Only 5 % of the urban population works in agriculture (Basile and Harriss-White 2000, p. 11), yet some 40 % of North Arcot District’s NDP was accounted for by agriculture (Ramasamy et al. 1991, p. 11). A good deal of this production takes place on small farms. Many of the landless in these villages also depend on agricultural labour for income (see Arivukkarasi and Cavalcante, Chaps. 8 and 10). Together this means that the incomes of a sizeable majority of the region’s population depend on the agricultural sector.
- 7.
‘Machine rolling and shape-cutting’ refers to the flattening of gold biscuits into gold sheets through a series of rollers, the shaping of gold biscuits into long wires, and the cutting of gold sheets into shapes, similar to the function of a cookie cutter.
- 8.
Polishing usually involves gold- or silver-covering work. When an ornament is polished, it is brushed clear and lightly coated in gold or silver to give it a new shine.
- 9.
‘Machine cutting’ refers to the cutting of ornaments into pre-set designs using a cutting machine. This type of machine is capable of finer and more detailed designs than goldsmiths can accomplish by hand.
- 10.
Customers appear to appreciate ready-mades for several reasons. Ready-mades can be seen, touched, tried on and compared to other ornaments in the shop. This contrasts sharply with having to select a design from a catalogue of pictures or drawings. In the past, ornaments were ordered on one day and picked up several days later, sometimes with an unsatisfactory outcome. In contrast, ready-mades involve no wait. The immediacy of ready-made transactions has been particularly important in drawing last-minute demand—for example, for a fast-approaching wedding. Furthermore, ready-mades have gained popularity because of their ‘new’, ‘modern’ designs.
- 11.
Interviews with goldsmiths on brief revisits to Arni by Harriss-White in 2007 and 2010 confirmed that goldsmiths have not experienced rising unemployment.
- 12.
- 13.
A hallmark is a brand stamped on an ornament indicating that the ornament’s purity is above a specified level.
- 14.
Goldsmiths earn a small amount of money from ‘wastage’—gold dust resulting from converting gold from 24-carat to its desired purity and chipping away at an ornament to mould its design. For a single ornament, wastage does not amount to much. It is usually collected by a smith once every month or two by sweeping the shop floor. A smith must then spend several hours separating the gold from the dirt, melting the gold into a single biscuit, and purifying it. Some smiths do not bother with wastage collection because of this lengthy process.
- 15.
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Stanley, J. (2016). A Future Not So Golden: Liberalization, Mechanization and Conflict in Arni’s Gold Ornaments Cluster. In: Harriss-White, B. (eds) Middle India and Urban-Rural Development. Exploring Urban Change in South Asia. Springer, New Delhi. https://doi.org/10.1007/978-81-322-2431-0_5
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