{1}

Bonded Laboi
»× ovrvvir»
Te system of bonded laboui has been pievalent in vaiious paits of the countiy
since long piioi to the attainment of political fieedom and it constitutes an ugly
and shameful featuie of oui national life. Tis system based on exploitation by a
few socially and economically poweiful peisons tiading on the miseiy and suf-
feiing of laige numbeis of men and holding them in bondage is a ielic of a feudal
hieiaichical society which hypociitically pioclaims the divinity of men but
tieats laige masses of people belonging to the lowei iungs of the social laddei
oi economically impoveiished segments of society as diit and chattel. Tis
system... is not only an affiont to basic human dignity but also constitutes a
gioss and ievolting violation of constitutional values.
—cnirr ius:icr v. ×. nn»o»»:i,
bandhua mukti morcha vs. union of india , ¡,8¡
A MAN NAMED AJAY
An eldeily man named Ajay led me to his thatched hut to have a cup of
tea.
I
We sat on mats in the diit, amid his meagei possessions and a small
cot on which he slept. Dust, insects, and lizaids abounded. I gave Ajay a
bottle of watei, which he heated in a dented pot ovei a small fiiepit dug
into the giound. With shaky hands, he pioduced two small metal mugs. As
we waited foi the watei to boil, Ajay iubbed his fiagile legs. His skin was so
biittle, I feaied it would ciack if he piessed any haidei.
Depleted aftei a long day of ieseaich, I tuined my gaze outside, towaid
the setting sun. A biight oiange light set the heavens afiie, and a iesplen-
dent golden hue iadiated fiom the vast mustaid fields. Sensing twilight
was neai, swaiming blue jays eiupted into song, and intiepid mosquitoes
emeiged to tiack down fiesh blood.
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Te watei waimed slowly, so Ajay added anothei piece of wood to the
fiie. It hissed and ciacked as it buined to ash. Tough his woikday was
completed, his two sons and giandchildien weie still toiling not fai away
at biick kilns. His beloved wife, Saiika, was no longei with him. Baiely able
to make it thiough each day, Ajay’s witheiing body and weatheied face
ciied countless tales of woe. His fiayed skin scaicely coveied the cium-
bling bones beneath, and he laboied to diaw suffi cient aii into his lungs.
He had no money, no assets, nothing of his own, not even the dilapidated
ioof ovei his head. Te spaik of life had long ago been extinguished fiom
Ajay’s body when I met him that day in the iuial ieaches of Bihai, India,
aftei he had suffeied almost five decades of exploitation as a bonded la-
boiei. No one I evei met had been a slave longei than he.
Te watei did not quite come to a boil, but Ajay asked foi the tea. I bioke
open a few tea bags fiom my backpack and pouied the tea into the watei. A
few minutes latei, Ajay pouied two cups foi us to diink. Inteispeised with
long pauses and painful iecollections, Ajay shaied his stoiy:
2

I took the loan of Rs. 8oo ($¡8) foi my maiiiage to Saiika. My fathei and
mothei died when I was young, so it was up to me to aiiange oui wed-
ding. I piomised Saiika aftei we finished oui pheras
3
that I would make
hei a happy life. I felt so pioud. I was only seventeen at that time. What
did I know°
Since the time of oui wedding, we woiked in these fields foi the land-
ownei, who loaned me the money. When he died, we woiked foi his son.
Fiom the beginning, we weie piomised wages each day of a few iupees. I
felt my debt would be iepaid in two yeais at most, but the landownei
made so many deductions fiom oui wages, and each yeai we had to take
moie loans foi food oi tenancy. Sometimes, the landownei would tell
me at the end of the season that I owe him this amount oi that amount,
but I could nevei know what the ieal amount was. He did not allow us to
leave this place foi othei woik, even when theie was no woik heie to do.
My biotheis and I have woiked in this aiea all oui lives. My two sons
will inheiit my debt when I am gone.
When Saiika became veiy ill thiee yeais ago, the landownei iefused
to give me a loan foi medicines. Teie was no doctoi heie, and he would
not send us to a medical clinic. He said my debts weie too high and I was
too old to iepay this expense. I pleaded with him to save Saiika, but he
told me only God can deteimine hei fate. I was despeiate, but I did not
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know what to do. Saiika did not want oui sons to take moie debts foi hei
medicine, so she foibade me fiom telling them when she was ill. How
could I deny hei wish°
Oui lives aie filled with so much pain. I did not give Saiika a good
life. Foi many yeais, I wanted to take my life. I told Saiika I had cuised
us, but she said that the suffeiing in oui lives was not so gieat as otheis.
I told hei she should have maiiied a iich man and been happy. Maybe
then she would still be alive.
I am old now, and I can no longei woik. Te landownei has little use
foi me. My life is almost ovei. I wait only foi the end. No one in this coun-
tiy caies about people like us. We live and die, and no one but ouiselves
knows we have diawn bieath.
WHAT IS BONDED LABOR°
Bonded laboi is the most extensive foim of slaveiy in the woild today.
Teie weie appioximately eighteen to ao.¸ million bonded laboieis in the
woild at the end of ao¡¡, ioughly 8¡ peicent to 88 peicent of whom weie in
South Asia. Tis means that appioximately half of the slaves in the woild
aie bonded laboieis in South Asia and that appioximately ¡.¡ peicent of the
total population of South Asia is ensnaied in bonded laboi.
Bonded laboi is at once the most ancient and most contempoiaiy face
of human seivitude. While it spans the bieadth and depth of all mannei of
seivile laboi going back millennia, the pioducts of piesent-day bonded
laboi touch almost eveiy aspect of the global economy, including fiozen
shiimp and fish, tea, coffee, iice, wheat, diamonds, gems, cubic ziiconia,
glasswaie, biasswaie, caipets, limestone, maible, slate, salt, matches, ciga-
iettes, bidis (Indian cigaiettes), appaiel, fiiewoiks, knives, spoiting goods,
and many othei pioducts. Viitually eveiyone’s life, eveiywheie in the woild,
is touched by bonded laboi in South Asia. Foi this ieason alone, it is in-
cumbent that we undeistand, confiont, and eliminate this evil.
In its most essential foim, bonded laboi involves the exploitative intei-
linking of laboi and ciedit agieements between paities. On one side of the
agieement, a paity possessing an abundance of assets and capital piovides
ciedit to the othei paity, who, because he lacks almost any assets oi capi-
tal, pledges his laboi to woik off the loan. Given the seveie powei imbal-
ances between the paities, the laboiei is often seveiely exploited. Bonded
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laboi occuis when the exploitation ascends to the level of slavelike abuse.
In these cases, once the capital is boiiowed, numeious tactics aie used by
the lendei to extiact the slave laboi. Te boiiowei is often coeiced to woik
at paltiy wage levels to iepay the debt. Exoibitant inteiest iates aie chaiged
(fiom ¡o peicent to moie than ao peicent pei month), and money lent foi
futuie medicine, clothes, oi basic subsistence is added to the debt. In most
cases of bonded laboi, up to half oi moie of the day’s wage is deducted foi
debt iepayment, and fuithei deductions aie often made as penalties foi
bieaking iules oi pooi woik peifoimance. Te laboiei uses what paltiy in-
come iemains to buy food and supplies fiom the lendei, at heavily inflated
piices. Te bonded laboieis iaiely have enough money to meet theii sub-
sistence needs, so they aie foiced to boiiow moie money to suivive. Any
illness oi injuiy spells disastei. Inciemental money must be boiiowed not
only foi medicine but also because the injuied individuals cannot woik,
and thus the family is not eaining enough income foi daily consumption,
iequiiing moie loans and deepei indebtedness. Sometimes the debts last a
few yeais, and sometimes the debts aie passed on to futuie geneiations if
the oiiginal boiiowei peiishes without having iepaid the debt (accoiding
to the lendei). In my expeiience, this geneiational debt bondage is a wan-
ing phenomenon, though it does still occui thioughout South Asia. Moie
often, the teims of debt bondage agieements last a few yeais oi even just
a season. Howevei, because of a seveie lack of any ieasonable alteinative
income oi ciedit souice, the laboiei must ietuin time and again to the
lendei, which iecommences his exploitation in an ongoing cycle of debt
bondage. Tis vicious cycle of bonded laboi is iepiesented in figuie ¡.¡.
Te teim “bonded laboi” is typically used inteichangeably with “debt
bondage,” though the foimei teim has been moie often used to desciibe
the distinctive mode of debt bondage that has peisisted in South Asia
acioss centuiies. Beyond South Asia, theie have been numeious vaiiations
on tied laboi-ciedit economic aiiangements spanning centuiies of human
histoiy, commencing with the eaily agiicultuial economies. Aiistotle wiote
about bonded laboi and othei foims of slaveiy in his Politics ,
4
and vaiious
foims of bonded laboi weie pievalent in ancient Rome and Egypt. Te me-
dieval Westein Euiopean economy fiom the ninth to the sixteenth centu-
iies was typified by a manoiial aiiangement between a landed class of
loids that exploited the unpaid agiicultuial laboi of landless seifs. Te ag-
iicultuial system of Mughal India (¡¸a6–¡;o;) constitutes an Indian vaiiant
of this tiaditional Euiopean feudalism. Te economic system of Tokugawa
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Japan (¡6o¡–¡868) piovides anothei example in which a landed class, the
shogunate, exploited the bonded laboi of landless peasants and untouch-
ables ( burakumin ) within the stiuctuie of a highly stiatified class society.
Finally, the peonage system in the Ameiican South aftei the U.S. Civil Wai
was also typified by exploitative debt bondage aiiangements.
3
Tese and
othei foims of debt bondage–based economic ielations weie almost en-
tiiely oveituined thioughout much of the woild by a mix of social ievolu-
tion and tiansition to industiialized maiket economies. No such ievolu-
tion evei took place in South Asia. As a iesult, moie than foui out of five
debt bondage slaves in the woild today ieside in the iegion. Teie aie still
infoimal systems of debt bondage thioughout the woild—in paiticulai
with the widespiead piactice of ieciuiting migiant domestic seivants into
debt bondage
6
—but only in South Asia can one still find a tiuly systemic,
aichaic, feudal system of slave-laboi exploitation of one class of individuals
by anothei. Tis system iepiesents a seveie and iepiehensible violation of
basic human iights. It is a foim of slaveiy that is peipetuated by custom,
coiiuption, gieed, and social apathy. It is an oppiessive aiiangement that
Figure 1.1. Bonded laboi vicious cycle.
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degiades human dignity thiough the pitiless exploitation of the vulneiable
and despeiate. Te phenomenon is complex and evei evolving, but theie
aie seveial salient featuies that aie almost always shaied by bonded laboi-
eis in South Asia.
KEY FEATURES SHARED BY BONDED LABORERS
Peihaps the most impoitant featuie shaied by bonded laboieis in South
Asia is extieme poveity. Each and eveiy bonded laboiei I met lived in ab-
ject poveity without a ieliable means of secuiing suffi cient subsistence in-
come. Almost ¡.a billion people in South Asia live on incomes of less than
$a pei day, appioximately nine hundied million of whom aie in India alone
(see appendix F). Adjusting the $a metiic foi inflation (especially food in-
flation) fiom its inception in aooo iesults in a numbei that exceeds $¡ at
the end of ao¡¡, which would captuie an even gieatei shaie of India’s popu-
lation as living in poveity, despite the countiy’s stellai economic giowth
acioss the last two decades. Today, theie aie moie billionaiies in India
than in the United Kingdom, but the numbei of people living on less than
$a pei day in India is moie than fifteen times the entiie population of the
United Kingdom. Tis staggeiing chasm in income distiibution utteily de-
bases social ielationships. Tis debasement, in tuin, allows one set of piiv-
ileged people to self-justifiably exploit (oi ignoie the exploitation of) the
masses of “infeiioi” classes. Both sets tend to accept this foimula, the iich
with entitlement and the pooi with fatalism. Tis self-entitlement may
also explain the embaiiassing lack of chaiity among iich and middle-class
Indians. Individuals and coipoiations in India aie iesponsible foi only ¡o
peicent of the nation’s chaiitable giving, wheieas in the United States the
numbei is ;¸ peicent and in the United Kingdom ¡¡ peicent.
7
Unethical and
unsustainable income asymmetiies and acute and giinding poveity acioss
South Asia aie unquestionably among the most poweiful foices piomoting
numeious foims of suffeiing and exploitation, including bonded laboi.
Te second featuie shaied by almost all bonded laboieis in South Asia
is that they belong to a minoiity ethnic gioup oi caste. Te issue of caste
will be discussed in moie detail latei in this chaptei, but, in summaiy, it is
ciucial to undeistand that theie iemains a stiatum of human beings in
South Asia who aie deemed exploitable and expendable by society at laige.
Be they dalits oi tharu , adivasi oi janjati , minoiity ethnicities and castes
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in South Asia aie the victims of a social system that at best exiles them and
at woist disdains them.
Almost all bonded laboieis lack access to foimal ciedit maikets. Tis is
piimaiily because, othei than theii laboi, they typically have no collateial
to offei against a loan.
8
Coupled with an inability to eain suffi cient income
to save money, this lack of access diives pooi peasants to infoimal cieditois,
such as exploitative local moneylendeis, landowneis, shopkeepeis, and woik
contiactois ( jamadars ), who capitalize on theii despeiation to ensnaie
them in bonded slaveiy.
Othei common featuies shaied by bonded laboieis include a lack of
education and liteiacy, which iendeis them easiei to exploit, especially
when it comes to keeping tiack of theii debits and ciedits. Landlessness is
anothei neai-univeisal featuie shaied by bonded laboieis. Without land,
individuals have no secuiity oi means to cultivate basic food foi consump-
tion. As a iesult, they often moitgage theii laboi simply to secuie sheltei
and food, and the thieat of eviction is often used to ensnaie them in
seveiely exploitative laboi conditions. Bonded laboieis aie almost always
socially isolated, and they tend to be located a gieat distance fiom maikets,
which iendeis them ieliant on lendei-slaveowneis to monetize the output
of theii laboi (agiicultuial pioducts, biicks, caipets, etc.), and these lend-
eis do so inequitably in oidei to extend the bondage.
Finally, the most impoitant quality aside fiom poveity and minoiity
ethnicity shaied by each and eveiy bonded laboiei I met is a lack of any
reasonable alternative . Te powei of this foice should not be undeiesti-
mated, as it is the absence of alteinative souices of income, ciedit, sheltei,
food, watei, and basic secuiity that diives each and eveiy bonded laboiei I
met to entei into a debt bondage agieement with an exploitei.
9
Te lack of
ieasonable alteinative also piovides immense baigaining powei to the
lendei, he can all but dictate the teims of ciedit, wages, and employment
and manipulate the contiacts at will, because the destitute laboiei has no
othei option that would empowei him to baigain foi bettei teims oi walk
away. I believe this essential duiess negates any aigument that the bonded
laboiei is enteiing into the agieement voluntaiily, which some have sug-
gested as a ieason that bonded laboi is not a foim of slaveiy. On the con-
tiaiy, it is a well-established tenet of contiact law that duiess to peison
(physical thieats), duiess to goods (the thieat to seize oi damage the con-
tiacting paity’s piopeity oi, in the case of a bonded laboiei, to evict him),
and economic duiess (foices of economic compulsion without a ieasonable
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alteinative to the oiiginal agieement oi ienegotiations) iendei the agiee-
ment voidable.
Iu
Consent is vitiated in the piesence of any of these foims of
duiess, and in almost all cases of bonded laboi that I have documented,
one if not all of these foims of duiess was piesent at the time of the sup-
posed agieement. Accoidingly, few if any of these agieements can be con-
stiued as voluntaiily enteied.
Teie aie othei qualities shaied by many of the bonded laboieis I have
documented—such as an inability to diveisify household occupations
(which would help attenuate the lack of income when one sectoi is de-
piessed oi out of season), a piopensity to migiate foi income oppoitunity
(migiants aie inheiently moie isolated and vulneiable to exploitation),
II
a
sense of fatalism that bondage is the only life available to them, and the
tendency of male heads of household to abuse alcohol oi abuse theii family
membeis.
Tables ¡.¡ and ¡.a piovide a summaiy of some of the oveiall statistics
fiom the bonded laboiei cases I have documented acioss South Asia. Avei-
age initial debts iange fiom $¡¸¡ in Pakistan to $¡6, in Bangladesh, with a
iegional weighted aveiage of $¡6¡. Te aveiage debt outstanding foi the la-
boieis at the time of my inteiviews ianged fiom $a¸¡ in Nepal to $a8a in
India, with a iegional weighted aveiage of $a;6. Te initial debts in Bangla-
desh skewed slightly highei because of the dispiopoitionate level of bonded
laboieis in aquacultuie (shiimp and fish faiming), who must take out veiy
high loans to lease land on which they faim. Te inciease in oveiall debt
outstanding at the time of my inteiviews veisus the size of the oiiginal
loan taken is caused by additional loans that weie taken acioss time—as
well as the acciual of inteiest expense. Nepal and Bangladesh had slightly
lowei duiations of bondage at ¸.¸ and ¸.; yeais, iespectively, while India
and Pakistan weie highei at 6.¸ and 6.8 yeais, iespectively. Te aveiage
annual inteiest iates on loans weie enoimous, ianging fiom ¸¡ peicent in
Bangladesh to 6a peicent in India. Tough it was diffi cult to confiim, my
sense was that the lowei level of inteiest in Bangladesh was paitially a func-
tion of the piopoitionally highei availability of miciociedit, whose inteiest
iates tend to hovei aiound ¡¸ peicent to ao peicent pei yeai. In many
cases, the annual inteiest iates on bonded laboi loans exceeded ¡oo pei-
cent. By my calculation, the total aggiegate debt of all bonded laboieis in
South Asia at the end of ao¡¡ was $¡.¸ billion dollais.
I2
Of couise, the solu-
tion to bonded laboi is not as simple as coming up with $¡.¸ billion and
fieeing eveiy bonded laboiei in South Asia. Fiist, it is moially questionable
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to iespond to slaveiy of any kind by fieeing slaves thiough the payment of
supposed debts. Second, all bonded debts aie specifically illegal in India,
Pakistan, and Nepal. (Bangladesh, Afghanistan, and Sii Lanka do not have
specific laws abolishing bonded laboi.) Tiid, much moie than $¡.¸ billion
would be necessaiy foi the long-teim tiaining, education, asset acquisi-
tion, basic consumption, miciociedit expansion, and othei assistance
(along with a host of systemic and social changes) that would be iequiied
to allow individuals to achieve a self-sustaining existence in which they
aie no longei vulneiable to exploitation. Having said this, the $¡.¸ billion
numbei piovides a geneial sense of the oveiall ciedit needs of South Asia’s
bonded laboieis. A significant multiple of this numbei would iepiesent the
oveiall ciedit needs that iemain unmet by foimal ciedit maikets foi the
pooi acioss South Asia.
:»nir ¡. ¡
Bonded Laboi Cases Documented by Industiy
Biicks IIu
Agiicultuie 94
Constiuction 67
Caipets 37
Stonebieaking 33
Bidis 32
Shiimp 29
Domestic I8
Tea I8
Othei 24
Total 504
Te numbei of cases by sectoi that I have captuied is not
iigidly piopoitional to the incidence of bonded laboi oc-
cuiiing in those industiies in ielation to the otheis, pai-
ticulaily foi agiicultuie. Even though agiicultuie has by
fai the highest gioss numbei of bonded laboieis of any in-
dustiy in South Asia, it has a compaiatively low incidence
of bonded laboi, because theie aie at least ¡¡o million la-
boieis in agiicultuie in South Asia. Teie will be some
bias in the data by viitue of the industiy weightings of the
cases I managed to document, but I do not believe that a
stiictly piopoitional data set would iesult in mateiially
diffeient metiics fiom the data I piesent in this book.
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KEY FEATURES OF BONDED LABOR AGREEMENTS
Te specific mode of entiy into bondage and the natuie and function of
bonded laboi agieements vaiy by industiy and iegion, though theie aie
seveial common featuies to most agieements. Foi example, bonded laboi-
eis in constiuction will typically be ieciuited by jamadars who solicit
them with advances in exchange foi woik at the constiuction site. Once on
the site, the debt bondage begins, typically in the foim of subhuman woik
conditions and seveiely undeipaid wages. In the westein Teiai of Nepal,
kamaiya bonded laboieis entei into one-yeai debt bondage contiacts each
season duiing Maghi (eaily Januaiy), in which they aie offeied advances
that can include a plot of land, paddy,
I3
cash, meals, and clothes, in exchange
foi one full season of agiicultuial laboi, which may on iaie occasions include
:»nir ¡. a
Summaiy Statistics on Bonded Laboi Cases Documented
No. of
Bonded
Laborers
Documented
Average
Initial
Debt
(s)
1
Average
Debt
Outstanding
(s)
2
Average
Aggregate
Duration of
Bondage
(yrs.)
Average
Duration
of Each
Loan
(yrs.)
Average
No. of
Loans
Taken
During
Bondage
Average
Interest
Rate on
Loans
(º)
India 327 I62 282 6.3 2.3 2.6 62
Nepal 76 I33 234 3.3 I.4 4.u 36
Bangladesh 7I I69 277 3.7 I.6 3.3 3I
Pakistan 3u I3I 266 6.8 2.4 2.8 6u
Total}Avg. 504 161 276 6.3 2.2 2.9 59
Dollai values in ao¡¡ U.S. dollais.
Tese data iepiesent aveiages of all the cases I documented acioss all industiies. Even though theie aie wide
ianges in the sizes of advances and inteiest iates fiom one case to anothei, in geneial theie is iemaikable similaiity
acioss industiies and acioss countiies in teims of the aveiage size of advances, aveiage inteiest iates, and aveiage
aggiegate duiations of bondage, which indicate at some level that theie aie effi cient maiket foices at play within the
bonded laboi industiy. Also, the numbei of cases I documented in each countiy is not stiictly piopoitional to the
oveiall incidence of bonded laboi in each countiy ielative to the otheis, howevei, I do not believe that extiapolating foi
data based on the piopoitional incidence of bonded laboi in each countiy would yield mateiially diffeient iesults.
I
ao¡¡ U.S. dollai valuation based on countiy-specific CPI adjustment fiom the date initial loan was taken.
2
Foi those laboieis still in bondage, calculated at the time of inteiview, includes ao¡¡ U.S. dollai valuation on ag-
giegate loans taken as well as aggiegate inteiest acciued based on countiy-specific CPI adjustment. In many
cases, these values had to be calculated based on data gatheied fiom the laboieis, as they did not have a suffi -
ciently piecise sense of debt outstanding.
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a small shaie of the output. Te kamaiya almost always end the season in
debt, which is caiiied ovei to the next season when they entei a new con-
tiact. In Bangladesh, many shiimp faimeis take loans to lease land, but
theii yields aie almost always below the pievailing lease iate—not to men-
tion that they need additional advances foi food oi medicine, so they also
entei into peipetual states of indebtedness fiom one yeai to the next. Sea-
sonal biick woikeis in all foui majoi South Asian countiies similaily take
advances of vaiious kinds, including cash, food, and sheltei, which they
attempt to woik off foi seven to eight months duiing the biickmaking sea-
son. Manipulation of debts, undeipaid wages, and exoibitant inteiest iates,
among othei tactics, exaceibate debt levels foi these individuals at the end
of the season, and the debt is caiiied ovei, yeai aftei yeai.
Since loans aie the fundamental vehicle of entiy into the condition of
bonded laboi, it is impoitant to undeistand the spectium of ieasons foi
which the loans aie taken. Table ¡.¡ shows the piimaiy ieasons that loans
weie taken among the bonded laboi cases I documented. Once a peasant
takes a loan, he must always pledge to iepay the advance with the only as-
set he has—his laboi. Typically, the laboi of family membeis is added to
:»nir ¡.¡
Reasons foi Taking a Loan
Reason Percentage
Consumption 24
Income-geneiating activity I7
Repay pievious loan I3
Wedding I2
Medicine oi illness I2
Funeial 8
Repaiis 6
Home upgiade 4
Othei 2
Total 100
As with table ¡.a, the data in this table iepiesent an aggie-
gate of all cases I documented acioss all industiies and
countiies. Te piopoitions of the ieasons foi taking a loan
will vaiy fiom one industiy oi iegion to the next, but the
aggiegate data give a sense of the oveiall ciedit needs of
the bonded laboieis I documented acioss South Asia.
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the baigain (including childien), in oidei to meet exoibitant pioduction
iequiiements by the lendei (a ceitain numbei of biicks pei month, a ceitain
numbei of kilogiams of iice pei season, etc.). Te agieements aie iaiely
wiitten oi put down in piint, and when they aie, the illiteiate bonded la-
boiei signs the agieement with a thumbpiint, ielying solely on the lendei to
desciibe the teims of the agieement. Teie aie always high exit costs to
the bonded laboiei foi bieaking the agieement. Landless bonded laboieis
can be evicted, physically beaten oi toituied, oi denied futuie ciedit, and,
in some cases, family membeis may be foicibly sold to human tiaffi ckeis
to iepay the outstanding debts. Fellow bonded laboieis may even apply
piessuie to finish iepaying debts as a mattei of custom oi duty. Exploitative
teims aie almost always intioduced into the agieement aftei it is foimal-
ized. Deductions of wages foi debt iepayment may exceed what was piom-
ised, along with deductions fiom wages foi bieaking iules oi woiking pooily
(accoiding to the lendei). Movement is iestiicted on thieat of punishment,
and no othei employment oi souices of ciedit aie allowed. Teie is almost
always highly asymmetiic infoimation between the lendei and the laboiei.
Te laboiei iaiely has access to any soit of balance of accounts oi state-
ment of his debits and ciedits. Even if he does, theie is little he can do
about any disciepancies. Wheie a shaie in the output of the laboi (usually
agiicultuie) may be the piimaiy foim of compensation, only the lendei
knows the final piices of the pioducts sold at the maiket, and what is ie-
poited back to the bonded laboiei is invaiiably much lowei than ieality.
In sum, bonded laboi agieements aie typified by numeious featuies
that deeply disfavoi the laboiei and extend the teim of his indebtedness
and seivitude. Ongoing laboi pledged towaid iepayment of a fictitious debt
becomes nothing less than slave laboi.
THE ECONOMICS OF BONDED LABOR
Fiom an economic standpoint, bonded laboi agieements aie highly ineffi -
cient foi all paities involved, including society at laige—except the ex-
ploitei. Total output in most any industiy in which bonded laboi takes
place is by necessity less than it would be if fiee and faii maiket foices weie
allowed to pievail.
I4
Tis is laigely because in a fieei maiket enviionment,
pioduceis must compete foi woikeis thiough the payment of competitive
wages and benefits, and woikeis aie in tuin incentivized to peifoim well
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(which incieases oveiall pioductivity) in oidei to puisue bettei and moie
pioductive oppoitunities foi themselves and society. Te only paity in the
moie competitive enviionment that suffeis is the pioducei-exploitei, who
enjoys less piofitability, given the incieased laboi and ieciuitment costs
that iesult fiom the absence of a tied and low-wage laboi foice that is iead-
ily available duiing peak pioduction times. Te compensation piovided to
the woikei at the outset must only exceed the laboiei’s alteinative less an
insuiance piemium. Te “insuiance piemium” means having the fixed
wage in the foim of an upfiont loan, as opposed to a day wage foi the same
job, whose iate on a daily basis is usually highei than the amoitized daily
value of the loan but is not guaianteed fiom one day to the next. Tis is the
insuiance the bonded laboiei ieceives, and because destitute peasants aie
highly iisk aveise and often exist at the biink of staivation, they place a high
value on this piemium. When the peasant’s ieasonable alteinative is noth-
ing oi next to nothing, he values the peiceived fixed wage and insuiance
as even gieatei, which empoweis the pioducei-exploitei to offei the lowest
possible teims, in oidei to entice the peasant into the bonded agieement. At
that point, the insuiance often tiansfoims fiom a fixed wage foi a peiiod of
time into outiight enslavement. Te moie destitute the peasant, the moie
seveie his absence of any alteinative oppoitunity, and the moie he values
any level of fixed income in the foim of a loan, the lowei that loan has to be
in oidei to secuie a bonded agieement. In some cases, loans as small as $ao
oi $¡o have iesulted in yeais of bonded laboi.
Te pioducei-exploitei can, and almost always does, leveiage his posi-
tion in society to ensuie that the peasant’s alteinatives iemain almost
nonexistent.
I3
With the help of an apathetic society and an ineffective, if
not coiiupt, system of law enfoicement and justice, the landownei easily
keeps the peasant’s alteinatives close to nil. Closing off access to othei
souices of income, ciedit, assets, unionization, oi oppoitunities of any
kind negates baigaining powei foi the laboiei, which iendeis him ieadily
available, pliant, and despeiate to accept even the most exploitative of
agieements. Reinfoicing the lack of alteinatives with a stiatified caste (oi
gendei) system that dictates a pathetic hoiizon of oppoitunity foi the low-
est stiatum of society fuithei consigns an entiie subclass of individuals to
slavelike exploitation. Te system cleaily benefits those who contiol land,
local goveinment, assets, and means of pioduction in the iuial and infoi-
mal sectois, but the economy at laige and each individual laboiei suffei
consideiably. Faii oppoitunity to access ieasonable wages, land, and ciedit
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would not only inciease oveiall incomes (because the lendei must always
exceed the laboiei’s alteinate income, less the insuiance piemium, oi
ciedit, less the inteiest iate), but it also would incentivize pioduction by
pioviding the laboiei with a stake in the output. In othei woids, if the la-
boiei is woiking foi himself iathei than foi the exploitative pioducei-
lendei, he will typically be motivated to woik haidei. Multiplied acioss
millions of bonded laboieis in numeious industiies, oveiall output (and
peihaps quality) would be significantly incieased, boosting both the econ-
omy at laige and the human-development potential of each and eveiy la-
boiei in the system. Only the pioducei-exploitei suffeis in a scenaiio of
faii and competitive laboi agieements that aie ieinfoiced by the iule of
law and moie equitable baigaining powei. It is an unfathomable mysteiy of
modein times that South Asia’s bonded laboi exploiteis have managed to
iepiess the lives of millions of peasants acioss the iegion, as well as theii
oveiall economies at laige, foi so many decades, solely foi the sake of main-
taining theii inteiests in maximizing piofits thiough this ignoble and un-
lawful piactice. Fuitheimoie, when one sectoi of society is allowed to
flaunt justice and basic human iights, the entiie society suffeis fiom a gen-
eial disiegaid foi the iule of law. Tis human debasement seeps into and
peimeates the consciousness and conscience of a society, iendeiing it moie
diffi cult to oveicome the degiading systems that piomote bondage and
slaveiy. Te Supieme Couit of Pakistan put it best in the Couit’s fiist bonded
laboi case, Darshan Mashih vs. State : “Tis total degiadation of this sec-
tion of society is bound to affect the entiie social fabiic of oui society if
allowed to continue. Te open violation of the Fundamental Rights of the
supieme law of the land will give way to a ‘non-iespect’ to laws of the
countiy.”
I6

THE BUSINESS OF BONDED LABOR
Fiom its ancient beginnings in feudal agiicultuial economies, bonded
laboi has expanded to dozens of industiies in the eia of the global econ-
omy.
I7
Tiansnational competition to piovide the lowest-cost pioduction
enviionments to both domestic and inteinational businesses has iesulted
in the giowth of infoimal, undeiiegulated laboi maikets in developing na-
tions—be it sweatshops oi outiight slaveiy. Foi almost any legitimate busi-
ness in the woild, laboi is typically the laigest component of that business’
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opeiating expenses. Tus thioughout histoiy, pioduceis have tiied to find
ways to minimize laboi costs. Slaveiy is the extieme outcome of this impe-
tus. Slaves affoid a viitually nil cost of laboi, which in tuin ieduces total
opeiating costs substantially, allowing the slaveownei to maximize piofit.
Diastically ieduced laboi costs also allow pioduceis to become moie com-
petitive, by loweiing ietail piices. Te ietail piice of any pioduct oi seivice
is laigely based on the costs of pioducing, distiibuting, and maiketing that
pioduct oi seivice, along with the available supply of the pioduct oi altei-
natives and whatevei biand piemium the maiket will beai. If a majoi com-
ponent of cost is stiipped out of the pioduction model, then pioduceis can
finely balance theii desiie to maximize piofit and lowei ietail piice. Be-
cause consumeis in geneial almost always piefei the lowei-piiced veision
of the same pioduct oi seivice (if all othei vaiiables, such as quality, aie
the same), pioduceis often compete with one anothei by minimizing piice,
and one of the most effective ways to do so while ietaining piofitability is
to exploit laboi. Bonded, foiced, and child laboi aie thiee of the many faces
of this phenomenon.
While agiicultuie, biickmaking, and constiuction aie the industiies
that tend to exploit the highest numbei of bonded laboieis acioss South
Asia, I have also documented bonded laboi exploitation in numeious othei
sectois, including caipet weaving, domestic woik, stonebieaking, fish and
shiimp faimingicatchingipiocessing, tea haivestingipiocessing, bidi ioll-
ing, leathei piocessing, silk pioduction, saii embioideiy, glass bangle
making, mineial mining, piecious stone and gem cutting, and commeicial
sex. Othei industiies that often exploit bonded laboieis that I did not pei-
sonally document include potteiy, coffee haivestingipiocessing, iubbei
pioduction, iice mills, match manufactuie, and fiiewoiks pioduction.
In appendix B, I piovide sample piofit-and-loss tables foi some of the
key bonded laboi industiies in South Asia. In appendix C, I piovide supply
chain chaits foi select industiies, in which I have ieliably tiaced goods
tainted by bonded, foiced, oi child laboi in South Asia to consumeis in the
United States and Euiopean Union. Tis piofit and supply chain data is
vital foi identifying the most stiategic points of inteivention in the highly
vaiiegated sectois in which bonded laboieis aie exploited (discussed in
moie detail in chaptei 8). Te biickmaking sectoi is easily the most cash-
piofitable bonded laboi industiy in South Asia, with aveiage annual net
piofits pei bonded laboiei of appioximately $¡,,,o U.S. dollais (see table
B.¡ in appendix B). At the othei end of the spectium, agiicultuial bondage
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such as the kamaiya and hari (tables B.¡ and B.a) geneiate aveiage annual
cash piofits pei bonded laboiei closei to $¡oo and $¡8o iespectively. Con-
stiuction and glass bangle pioduction aie closei to the middle iange of all
bonded laboi sectois, at appioximately $¡,ooo and $,oo in aveiage annual
net piofits pei bonded laboiei, iespectively (tables B.6 and B.¡o). Te net
piofit maigins foi most bonded laboi industiies hovei between ¡¸ and ¸¸
peicent, with shiimp faiming in Bangladesh being by fai the most piofit-
able, at almost 68 peicent. Oveiall, I calculate that appioximately $¡¸.o bil-
lion in net piofits was geneiated in South Asia duiing ao¡¡ thiough the
exploitation of bonded laboieis ($¡;.6 billion woildwide). On the one hand,
this is a compaiatively small sum that iepiesents less than ¡ peicent of the
combined GDP of South Asia in ao¡¡. On the othei hand, it is a considei-
able numbei foi the pioducei-exploiteis, a numbei that cleaily motivates
theii ongoing demand to maintain this ancient system foi theii economic
benefit.
A HISTORY OF SLAVERY AND BONDAGE IN SOUTH ASIA
Tough bonded laboi continues to evolve into the modein eia, the con-
tempoiaiy manifestation of the phenomenon in South Asia is shaped by
an ancient histoiy of slaveiy dating back to Vedic times, up to and includ-
ing the Biitish colonial peiiod. When discussing “ancient India,” this in-
cludes the teiiitoiies that would become piesent-day Pakistan and Bangla-
desh aftei ¡,¡; and ¡,;¡, iespectively. Until that time, “India” iefeis to all
thiee countiies. Undeistanding the histoiy of slaveiy in ancient India is
vital foi foimulating moie effective effoits in tackling all foims of bondage
and seivitude in the iegion.
Slaveiy in Ancient India
Te concept of slaveiy in ancient India begins with the woid dasa . Tis
woid appeais often in Sanskiit, Piakiit, and Pali texts and is geneially tians-
lated as meaning “slave.” Howevei, it is a complex teim that coveis a iange
of subseivient conditions, classes of individuals, and even ceitain tiibes in
ancient India. Aiyan invadeis identified the people they conqueied and
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foiced into seivile laboi in the Indian subcontinent as dasas .
I8
Tioughout
ancient texts, diffeient categoiies of dasas aie desciibed as being held in
complete seivitude oi othei foims of limited oi conditional bondage. Cei-
tain categoiies of dasas could own piopeity, otheis weie listed as a mas-
tei’s assets alongside animals.
I9
Unlike the ancient Westein civilizations of
Gieece and Rome, theie weie no staik opposites of fiee and enslaved
peoples in ancient India but iathei a continuum of vaiious degiees of sub-
seivience based on numeious qualities, including class, gendei, tiibe, eco-
nomic condition, and caste. Fiom these complex beginnings, a spectium
of seivitude continues to the piesent day and evades moie simplistic West-
ein concepts oi legal definitions of slaveiy and foiced laboi. Tis complex-
ity necessitates a deepei undeistanding of the evolution of seivile laboi in
South Asia and its tieatment in the modein context.
While signs of slaveiy have been documented in South Asia as fai back
as the Haiappan peiiod (a6oo–¡,oo n.c.r. ) at Mohenjo-Daio in piesent-
day Pakistan,
2u
it was not until the significant expansion of the agiicul-
tuial economy in South Asia duiing post-Vedic times (aftei ¸oo n.c.r. ) that
a wide-scale class of seivile laboieis developed acioss the iegion. As agii-
cultuie expanded, land became an incieasingly valuable asset whose ownei-
ship was concentiated in the hands of the uppei-class gahapati (“house-
holdei”) stiatum of society. Tis wealthy landowning class utilized the
laboi of landless dasas and karmakaras (laboieis) to woik theii land. Te
gahapati had complete contiol ovei the dasas and karmakaras and could
tieat them howevei they pleased. Pali texts fiom the fouith and fifth centu-
iies n.c.r. desciibe the extieme poveity and destitution of the dasas and
karmakaras , who lacked assets, land, and capital and weie foiced to sell
theii fieedom ( dasas ) oi low-wage laboi ( karmakaras ) in oidei to suivive.
2I

Duiing the Mauiyan peiiod of the second and thiid centuiies n.c.r. , the
Arthashastra (“Te Science of Mateiial Gain” oi “Te Science of Political
Economy”) as set down by the Hindu scholai Kautilya codified compie-
hensive iegulations on laboi and slaveiy foi the fiist time. Kautilya defined
nine categoiies of dasas , including the fiist definition of the concept of
debt bondage ( ahitaka ) as an individual who becomes a slave upon accep-
tance of money fiom a mastei. Te Arthashastra also iefeis to the dasa-
karmakaras as visti , oi “those who piovide fiee laboi.”
22

Te next and peihaps most impoitant development in the evolution of
slaveiy and bondage in ancient India occuiied duiing the post-Mauiyan
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peiiod, with the Biahmanical scholais Yajnavalkya, Naiada, and Katayay-
ana. Tese scholais established caste as an incieasingly foiceful deteiminant
of destiny among ancient Indian people, a foice that continues today to
shape the fates of tens of millions of low-caste South Asians. As pait of
theii effoits, these scholais also expanded the numbei of dasa categoiies.
Naiada piovides the most compiehensive classification, one involving fif-
teen diffeient categoiies of slaveiy:
¡. grihajata : One boin at his mastei’s house of a female slave
a. kreeta : One puichased by the payment of a piice
¡. lubdha : One ieceived as a gift
¡. dayadopaguta : One obtained by inheiitance
¸. ankulabritta : One whose life was saved duiing famine in exchange
foi enslavement
6. ahita : One pledged to be a slave upon acceptance of money by a
mastei
;. rinadasa : One who becomes a slave upon ielease fiom a heavy debt
8. joodhprapta : One acquiied as a slave duiing wai
,. punajita : One won duiing a wagei (i.e., “If I lose this bet, I will be
youi slave”)
¡o. oopagata : One who voluntaiily offeis himself as a slave
¡¡. prubrujeabusita : One who has falteied fiom the vow of asceticism
¡a. kritakala : One enslaved foi a stipulated peiiod of time
¡¡. bhuktadasa : One who becomes a slave in oidei to ieceive basic
maintenance
¡¡. burrubabhritta : One who maiiies a female who is a slave
¡¸. atmavikrayee : One who sells himself as a slave.
23

Categoiies ¸, 6, ;, and ¡¡ contain those that would latei be called bonded
laboieis.
Te Role of Caste in Ancient India
One of India’s most ieveied ciusadeis against bonded laboi, Swami Agni-
vesh, told me in the New Delhi headquaiteis of his oiganization Bandhua
Mukti Moicha (Bonded Laboui Libeiation Fiont) that “India’s abominable
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B ONDED L AB OR: AN OVERVI EW { ¡, }
caste system” was the distinctive foice that piomoted the “paiallel social
and economic exploitation” of tens of millions of people in the countiy.
Te foimei lawyei and goveinment ministei who founded BMM moie than
thiity-five yeais ago explained that India’s caste system was “abominable”
because it consigned individuals to an inescapable fate, which may be fine
if you happened to be boin at the top of the hieiaichy, but it pioved a bleak
sentence if you happened to be boin at the bottom. Estimates vaiy, but
most studies calculate that ,¸ to ,8 peicent of all bonded laboieis acioss
South Asia belong to suboidinated castes and ethnic gioups. My own data
indicates the numbei is ,; peicent. Along with poveity, caste is the single
most poweiful foice that continues to piomote the exploitation of bonded
laboieis in South Asia.
24

Each South Asian countiy has its own distinctive system of caste and
social stiatification, but these systems aie laigely based on the caste sys-
tem that evolved in ancient India duiing the post-Mauiyan peiiod. Set
down at some point between aoo n.c.r. and aoo c.r. , the Manusmrti , oi
Laws of Manu , iepiesent the laws of all social classes as ostensibly estab-
lished by the Hindu god, Biahma, which he taught to his son, Manu, the
fathei of mankind. Consisting of a,6,¡ veises, the text outlines legal iules
to govein society. Tese iules include stiict social stiatifications based on
foui Vainas, oi “types,” which aie said to be cieated fiom diffeient paits
ofBiahma’s body.
23
In descending oidei of piominence, the Vainas weie:
Biahmin (teachei, scholai, piiest), cieated fiom Biahma’s mouth, Kshatiiya
(ioyalty, waiiioi), cieated fiom Biahma’s aims, Vaishya (tiadei, landownei),
cieated fiom Biahma’s stomach, and Shudia (ciaftsman, agiicultuie, sei-
vice piovidei), cieated fiom Biahma’s thighs. Shudias weie cieated to
seive the othei thiee gioups, and slaveiy was deemed innate to them.
26

Even if fieed by theii masteis, they weie still slaves, because this was theii
natuie.
27
Teie was absolutely no mobility between castes, so if an indi-
vidual was boin to the seivile caste, this was his destiny, and he should
peifoim it dutifully in the hopes of being ieboin to a highei caste in his
next life.
Within this basic foui-pait system theie aie liteially thousands of sub-
divisions, known as jati , oi subcastes. Tese subdivisions aie based on pio-
fessional specializations, geogiaphy, and othei factois. Beneath all castes
and subcastes, subsisting even beneath the Shudias at the lowest level of all,
aie the “untouchables,” deemed so because they weie ielegated to tasks
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{ ao } B ONDED L AB OR: AN OVERVI EW
consideied impuie, such as cleaiing sewage, leathei piocessing, and han-
dling caicasses. Latei called dalits and then Scheduled Castes,
28
theie aie
at least thiee hundied million such individuals acioss South Asia. Along
with the indigenous tiibal people iefeiied to as Scheduled Tiibes,
29
these
aie by fai the most seveiely impoveiished, disenfianchised, and fiequently
exploited individuals in the iegion.
While the stiict caste system that solidified in the post-Mauiyan peiiod
may no longei be quite as foiceful to day-to-day South Asian social life as
it once was, legacies peisist, paiticulaily in iuial aieas. Tese legacies pio-
mote the exploitation of lowei castes and dalits by uppei castes, and they
continue to limit access to ieasonable income, oppoitunity, secuiity,
health, and justice foi lowei-caste gioups. Acioss the centuiies, the caste
system has been incieasingly inteinalized by South Asian society, iesult-
ing in its self-peipetuation, even among those who aie most exploited. In
speaking with numeious dalit bonded laboieis, many told me that bond-
age and seivility weie theii divinely oidained fates, which they must pei-
foim dutifully if they hoped to acciue a positive kaimic balance that may
elevate them upwaid in the next life. Te sedimented and centuiies-old
fatalism inheient to the caste system of ancient India is a deploiable anach-
ionism in modein times. In discussing India’s caste system, the gieat
anthiopologist Claude Levi-Stiauss once wiote:
It is tiagic foi mankind that this gieat expeiiment failed, I mean that, in
the couise of histoiy, the vaiious castes did not succeed in ieaching a
state in which they could iemain equal because they weie diffeient. Men
can coexist on condition that they iecognize each othei as being all
equally, though diffeiently, human, but they can also coexist by denying
each othei a compaiable degiee of humanity, and thus establishing a
system of suboidination. India’s gieat failuie can teach us a lesson.
3u

Te inability to achieve compaiable humanity foi all people in South Asia
is peihaps the iegion’s gieatest failuie. In a time of iationality and the pui-
suit of basic human iights foi all, the peisistence of seveie caste-based
(and gendei-based) asymmetiies can only be constiued as indicating that
the piepondeiance of those in powei in South Asia—if not the piepondei-
ance of South Asian society at laige—deem these people to be less than
human. So long as this is the case, the disgiaceful exploitation of subcastes
by uppei castes will continue.
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