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6 THE DECLINE OF THE EMERALD ELITE As a baseline for the changes of the late twentieth century, I propose to look at one of the most characteristic institutions of the gemstone business during its heyday. This was a system of fixed prices that prevailed in the business for many decades, finally coming to an end in the 1980s. It was a feature of the business that was exemplary of the fusion of business and community in the high days of Shvetambar dominance. Its significance for this chapter is that its disappearance from the scene marked the end of the old order. It was the miner’s canary of deep changes. A BASELINE That a system of fixed prices once existed will probably come as a surprise to those who imagine that every transaction in India is subject to bargaining. In fact, its sphere was somewhat limited; it applied only to the manufacturers’ sale of finished stones to traders, and almost exclusively to emeralds. It was based on the concept of what was called a dharavat (dharåvaṭ). In its original meaning, a dharavat is an assortment of finished gemstones of a particular shape (round, oval, etc.) to which a fixed price has been assigned. A batch of finished emeralds of a given shape would first be sorted for luster and color and would then be sepa‑ rated into paper packets on this basis. Prices would be assigned to each packet, after which they were assembled along with a list of the packets in a single package bound together with a rubber band. The 149 150 Emerald City list would indicate the number of stones in each packet, their collec‑ tive weight in carats, and their price per carat. This whole procedure, starting with the sorting and ending with the putting together of the packages, was known as “making dharavat,” and the bound package was referred to as a “dharavat.” The essence of the system was the principle that the prices of these paper packets were fixed and could not be bargained down. Although an entire bundle of packets was sometimes sold to a single buyer, the unit of sale was normally the packet, and the packet could not be broken up for the sale of indi‑ vidual stones or for substitutions.1 The basic rule was that the buyer had to take the packet at the price demanded, “Take it or leave it.” If you could not sell a packet at the dharavat price, you could not try to sell it at a lower price. You could, however, re-mix old stones with new stones in new packets. At first glance, it would seem reasonable to suppose that the purpose of such a system was to stifle competition between manufac‑ turers, thus keeping prices artificially high. In favor of this view is the fact that the basic price levels were clearly set by a few of the major houses. I am also told that consultation on prices was quite common, although my informants see this as merely a rational way to approach difficult decisions rather than collusion. In favor of the monopolistic interpretation is also the fact that when the system finally came to an end it was because of price competition from newcomers who had flooded into the business, as we shall shortly see. But although prices might have been set in such a way as to guarantee profits, it is far from clear that they were set in order to maximize profits in disregard of other considerations. In fact, respondents who knew the system at its height say that the prices, though fixed, were generally considered quite reasonable. One dealer who was very active in the 1970s told me of how he once bought some manufactured emeralds from one of the most established manufacturers at the fixed price. He knew the manufacturer’s margin, he said, and it was very high, and yet within twenty‑four hours he was able to resell the same emeralds to another buyer at a 40 percent profit. The point he was trying to make was that prices were—in his view—remarkably low. Given this, we must assume the existence of some unknown fac‑ tor at work in the system that an analysis based purely on the profit motive does not quite catch. An indication of what this factor might be is given in an article written by Champalal Chordia (Caurṛiyå 2003, already referred to in chapter 3), a son...

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