Human action

Traditional society is usually rigid and conservative by nature. In a highly stratified society, every individual receives a certain position at birth because of his family associations and faces the situations which may differ from individual to individual. Every action of the individual is tied into an obligatory network of other community members as well as of his own household members. These are two different sorts of obligations which he fulfills simultaneously. Such social needs and obligations form a system of social relations which has its impact on the economic functioning of the household or community. The following sketch (Diagram 2) is an attempt to describe the sociological network which neo-classical economists usually ignore.

Diagram 2: Factor influencing human action

Every individual possesses a set of characteristics which is unconsciously designed by values and cognition of society. The actions of an individual may easily be differentiated on the basis of these characteristics. The effect of personal factors on human efficiency is difficult to quantify. Such an attempt is always open to criticism due to its arbitrary nature.

Motivation and attitude also vary according to the personality. Personal motives are usually restricted to the prevailing standard.

According to WEBER's conception (GIDDENS 1971:163) of 'interpretative sociology', the understanding of 'motivation' always relates a particular conduct to a broader normative standard according to which the individual acts. The interpretation of a given course of action is subjectively adequate (adequate 'on the level of meaning') if the motivation which is attributed to it accords with recognized or habitual normative patterns. This entails showing, in other words, that the action concerned is meaningful in that it 'makes sense' in terms of accepted norms.

Values, Traditions, Norms

Individual’s Personality

Efficiency

Behavior

Planned Output

Action

Social Obligations

Culture

Set of Circumstances

Basic Needs External

Factors

Human Resource

Factors

Source: author’s own survey

In accordance with Weber's interpretation¹¹⁷ of the four types of orientation of social conduct, consumption-oriented income utilization and the urge to acquire prestige among individuals falls into the category of the 'value rational action' and the ' traditional action.’

"Value rational action is directed towards an overriding ideal, and takes no account of any other consideration as relevant. All actions which are solely directed to overriding ideals 'honour' approximate to this type. On the other side 'traditional action' is carried out under the influence of custom and habit. This applies to the great bulk of all everyday actions to which people have become habitually accustomed...." ( GIDDENS 1971:152).

Individuals not only deviate from one another in their personal make-up but face a differing set of circumstances which strongly affect decision making and their subsequent actions. This may be explained with the help of CHAYANOV’S MODEL¹¹⁸ of the farm family facing different circumstances in its life cycle and making alterations accordingly to cope with the situation. A similarity of circumstances also shows uniformity in the actions of individuals. New trends are usually exogenous, create instability in set patterns, bring variation in economic opportunity, hence affect decisions in everyday life.

Almost every type of socio-cultural factor appears to emphasize "utilization" more than accumulation and naturally "consumption" much more than saving. BENTHAM (1823:1, 49f) views individual’s psyche as naturally oriented towards easiness, and avoiding torture and agony.¹¹⁹ According to a general widespread concept of native respondents, "

consumption is a basic human need, expenditure on social festivities is a spontaneous learning process from childhood. Saving, however, is a logical planning of household income and cannot be done by everyone." In a rural society, social status is measured by how much one gives away rather than how much one saves. ‘Who does not wish to share surpluses with others- whether food or income - is considered rubbish. He is not respected or supported by his own clan members and others in the village.’ Such cultural values certainly exert a negative influence on saving motivation, which reminds HAHN’s discussion (1920:120; 1930:53) that voluntary saving activity requires an intellectual ideology in advance, which never develops in all sectors of a society simultaneously. It only comes after when cultural development reaches a certain level.¹²⁰

Socio-cultural factors determine not only the extent but the pattern of saving. Culturally widespread and approved forms are always preferred, since other people have practiced it quite often and the expected risks and losses are already known. Innovations are usually implemented by big savers, small savers never dare risk their yearlong efforts. This may be seen as a big handicap in the way of saving mobilization, as small savers are in the majority;, if they are not convinced, no scheme could be successful.

117 Weber explains four types of social conduct, 1) purposively rational conduct, 2) value rational action, 3) affective action, and 4) traditional action. In 'purposively rational conduct,’ the individual rationally

assesses the probable results of a given act in terms of the calculation of means to an end. In securing a given objective, a number of alternative means of reaching that end usually exists. The individual faced with these alternatives weighs the relative effectiveness of each of the possible means of attaining the end, and the consequences of securing it for other goals which the individual holds. In contrast, 'effective action' is carried out under the sway of some sort of emotive state, and as such is on the borderline of meaningful and non-meaningful conduct (WEBER 1968:25ff).

118 CHAYANOV (1966)

119 See Section 2.1.2.1.1.

120 See Section 2.1.2.1.1.

4.2.4 Biraderi (Brotherhood)

„The social relationship of patrilineal close relatives (biraderi) builds a network of social security¹²¹ around an individual household, [...],but the membership in a biraderi demands a certain standard of expenditures in order to fulfill social norms (BERGER 1987:476).

The term is derived from a Persian word ‘biradar’ meaning brother. Biraderi literally means ‘brotherhood.’ It is generally an endogamous group of individuals who consider themselves related to each other through blood or marriage. The English synonyms are

‘kinship’ or ‘extended family’ (MIRZA/FREEMAN/ECKERT 1975:6).¹²² EGLAR (1960:75)¹²³ defines it as a patrilineage. Biraderi endogamy minimizes the personal, social and financial hardships for the members, as no public welfare or social security programs exist (MIRZA/FREEMAN/ECKERT 1975:6-7). These closely knitted personal relations are considered as a focal point which supersedes all other loyalities. „The formal rules and regulations of the official and non-official institutions and organizations are frequently ignored or violated. The claims of personal biraderi relationships, whether real or

‘synthetic,’ [...], supersede the observance of formal rules.“ ’Biraderi’ may be defined as a corporate group of individuals who share the same ancestral line or at least the same origin (caste group). The group is supposed to be loyal and ready to give reciprocal help, especially in the case of conflict or other inter-biraderi clashes. The link is further strengthened by a strict observance of biraderi endogamy and ritualized exchange ¹²⁴ on ceremonial occasions.

„There is a strong ethic of loyalty to one’s kinsmen: one ought to be prepared to make sacrifices for their benefit. Marriage within the biraderi - siblings and cousins exchange children - is intended to cement their affections and relationships.“ (MERREY 1986:40)

In connection with biraderi's positive influence on saving, only 'Vartan Bhanji' (a bank of cash) may be considered as a mechanism to give the poor a possibility to deposit money in different households on different occasions and to draw it once on the same occasion organized by themselves.

A deep analysis of the mutual relationship among this group, however, shows a quite negative impact on the opportunities of an individual’s saving behavior. Despite the strong ethics of loyality to one's kinsmen, which is further cemented by intermarriages, a strong competitive atmosphere exists at intra-biraderi level. ¹²⁵.

All patrilateral cousins with their families are signified as 'Sharika;' they are permanently engaged in minimizing each other's prestige. This prestige winning game creates an atmosphere of continuous competition and leads to demonstrative consumption being so high that the other cannot afford it.

121 Such securities are usually required against unexpected emergencies and economic troubles of individual households.

122 See also BERGER (1986:476).

123 Cf. MIRZA/FREEMAN/ECKERT (1975:6).

124 For further details, see Section 5.5.3.3.

125 See also MERREY (1986).

„... despite the emphasis on loyalty to one’s kinsmen, tensions among biraderi members are always present. Patrilateral cousins and brothers often have tense and competitive relationships and do not completely trust each other. One’s brother’s or cousin’s personal izzat is not necessarily one’s own; hence, a man is apt to be jealous of and feel threatened by a brother’s success“ (MERREY 1986:409).

Many respondents have mentioned this competition as the major cause of borrowing for ceremonies. Since the average family size is quite big, every household has to be in competition with many households at one time.

The intra-biraderi marriage system results into a tightening of this network within the group. Almost all biraderi men are knitted in some sensitive relation because of a strict endogamy and therefore, cannot show indifference. A relatively better off household always remains the target of many needy relatives. Since savings can hardly be kept secret and intra-biraderi credit transactions are very common, an individual cannot retain his saving for a long time with him and once it is lent, he usually has no influence on repayment.

4.3 Summary

A socio-economic framework which plays a fundamental role in providing a base for saving is is dealt with in this chapter. The discussion is divided in ‘developmental political aspects’ and ‘socio-cultural aspects;’

The developmental political aspects, which provided a policy framework for the management of the financial sector, are as follows:

− A very narrow economic base inherited at the time of partition brought enormous problems for maintaining a sustainable economic growth in Pakistan. Since then, the government has not succeeded to build a productive economic potential.

− At the start, it was thought that agriculture has very little potential to contribute to the national economy, and there is no need for excessive investments to tap savings from this sector.

− Another flaw in the development planning of the 1960´s was to offer privileges to the already privileged class. The economic policy-makers of Pakistan decided to increase the income of those who had the capacity to save. The immediate benefits of economic growth were directed to this privileged group which made an already uneven income distribution more uneven.

− The discussion of the Islamization of the financial sector is limited to the ‘interest free banking’ and the ‘centralized system of Zakat’ in the chapter. Interest free banking showed an overall positive impact in different regions of the country, but the centralized system of Zakat collection contributed to the regional disparity.

− The experiment to deregulate the financial sector had a negative impact on the financial market.

The socio-cultural aspects of the community, which provide a background to shape the saving behaviour, are as follows:

− The existing saving behaviour of the Pakistani community has been shaped by the socio-political conditions in an undivided Indian subcontinent under the Moghul empire and British colonial rule.

− The ideological structure of the society is led by the traditions, norms and values of a rigid and conservative social setup. In a rural society, social status is measured by how much one gives away rather than how much one saves.

− Every action of the individual is tied into an obligatory network of other community members as well as of his own household members. Such social needs and obligations form a system of social relations which has its impact on the economic functioning of the household.

− Almost all biraderi men are knitted in some sensitive relation because of a strict endogamy and, therefore, a relatively better off household always remains the target of many needy relatives. Since savings can hardly be kept secret and intra-biraderi credit

transactions are very common, an individual cannot retain his saving for a long time and once it is lent, he usually has no influence on repayment.

5. Household saving in rural Pakistan - empirical analysis