The Varna system in Dharma-shastras divides society into four varnas (Brahmins, Kshatriyas, Vaishya and Shudras). Those who fall out of this system because of their grievous sins are ostracised as outcastes (untouchables) and considered outside the varna system. The system which divides Hindus into rigid hierarchical groups based on their karma (work) and dharma (the Hindi word for religion, but here it means duty) is generally accepted to be more than 3,000 years old.
How did caste come about?
Manusmriti , widely regarded to be the most important and authoritative book on Hindu law and dating back to at least 1,000 years before Christ was born, "acknowledges and justifies the caste system as the basis of order and regularity of society".
The caste system divides Hindus into four main categories - Brahmins, Kshatriyas, Vaishyas and the Shudras. Many believe that the groups originated from Brahma, the Hindu God of creation. At the top of the hierarchy were the Brahmins who were mainly teachers and intellectuals and are believed to have come from Brahma's head. Then came the Kshatriyas, or the warriors and rulers, supposedly from his arms. The third slot went to the Vaishyas, or the traders, who were created from his thighs. At the bottom of the heap were the Shudras, who came from Brahma's feet and did all the menial jobs.
The main castes were further divided into about 3,000 castes and 25,000 sub-castes, each based on their specific occupation.
Outside of this Hindu caste system were the achhoots - the Dalits or the untouchables.
How does caste work?
For centuries, caste has dictated almost every aspect of Hindu religious and social life, with each group occupying a specific place in this complex hierarchy.
Rural communities have long been arranged on the basis of castes - the upper and lower castes almost always lived in segregated colonies, the water wells were not shared, Brahmins would not accept food or drink from the Shudras, and one could marry only within one's caste.
Adam Smith is generally regarded as the founder of modern economics. Adam Smith advocated the capitalist free enterprise system, based on the belief that men are motivated by rational self-interest. His book "Wealth of Nations" became a standard text book for economists throughout the Western world
