Epic and Historical Haircuts

We have seen "Haircut and Stock Markets",  "Pure Haircuts and Cutters" and  "Haircut over the years".  Many haircuts (or sometimes lack of it) over the past several centuries have created history or changed its course.  There are references in our epics as well as incidents in history, when a haircut or lack of it achieved, impacted or changed the future of mankind.

One of the earliest references goes back to "Gangavatarana" or the bringing of  Divine Ganga from the heavens to the earth.  King Sagara, one of the Kings of Kosala and forefathers of Sri Rama, sent his sixty thousand (!) sons to find the sacred horse of Ashwamedha yaaga which went missing.  The princes found the horse next to a sage, Kapila, and accused him of being the thief.  Enraged by their misbehaviour,  Sage Kapila used his mystic powers and burnt them to ashes.  When King Bhagiratha, one of the descendants  of Sagara, did a long penance to bring the Divine Ganges to the Earth and make her flow over the ashes of Sixty Thousand sons ancestors and thereby provide them salvation, Ganga agreed to come down to the earth and meet his request.  Like all sanctions or approvals have some conditions, she challenged him to find a person to withstand the force of her flow from heaven.  Bhagiratha again did a long penance, this time meditating on Lord Shiva, to help him achieve this task.  Lord Shiva agreed and when Ganga jumped with all her force from heaven, he tied her in his long "Jata", long hair, and allowed further flow again only on Bhagiratha's request.  She still adorns Lord Shiva's head and any picture of his incomplete without Ganga in the middle of his hair.  Fortunately for Bhagiratha, Lord Shiva had kept long hair and this came in handy (or hairy) to stop the flow of mighty Ganga.  One can imagine Bhagiratha's plight if Lord Shiva was in the habit of getting regular haircuts.

Another reference we can see is in "Ramayana".  When SriRama is in Vanavaasa, his brother Bharata comes to the forest to request him to come back to Ayodhya.   Rama describes Bharata, prostrating before him on arrival in the forest, thus:

जटिलं चीरवसनं प्राञ्जलिं पतितं भुवि  ददर्श रामो दुदर्ष युगान्ते भास्करं यथा

"Jatilam cheeravasanam praanjalim patitam bhuvi, dadarsha ramo duradrsha yugantee bhaskaram yatha"

Bharata was a handsome prince.  But not having a hair dressing for several days had resulted in his hair turning into "Jataa",  a twisted mass of hair.  Coupled with his clothes ( Naarumadi or one used by sages living in the forest) this lack of hair dressing had made him a pathetic sight and Rama compares him with the Sun during the end of time, when the Sun loses his light and shine and looks dim and dull.  In many languages, including Sanskrit the word "Jatila",  meaning a twisted mass of hair which is difficult to comb and straighten, is used even today to describe problems which are very "difficult to resolve".  Of course, Lord Shiva is often described as "Jataajootadhari", one having a maze of twisted hair on his head.

Everyone knows that the root cause of the "Mahabharata" war was Draupadi's hair.  On the orders of his elder brother Duryoodhana, Dusshasana pulled Queen Draupadi by her hair and subsequent events led  to the Kurukshetra war.  But there is another important event that led to a famous haircut and other developments.  when the Paandavas were in the forest, during their Vanavaas, King Jayadratha or Saindhava, husband of Duryodhana's sister Dusshala, tried to kidnap Draupadi when the Paandavas were not around.  Paandavas arrived just in time, unlike our Police in most of the movies who arrive after the event, and Jayadratha was severely punished.  Since he was the husband of their cousin, his life was spared but his head was shaved off by Bhima as a punishment and he was unable to get back to his Kingdom for a long time until sufficient hair grew on his head.  There were further developments as a result of this episode which culminated in the killing of Abhimanyu and Jayadratha himself during the war.

It is a quirk of fate that while Jayadratha's haircut was due to attempted kidnap,  Rukmi's haircut was a result of attempt to prevent a kidnap.  Neither the kidnap attempt was successful nor the attempt to prevent it, but the heads of both the attempted kidnapper and attempter to prevent kidnap were shaved!  Krishna kidnapped Rukmini, sister of Rukmi, just before her marriage to the King of Chedi, Shishupala.  On learning of the kidnapping Rukmi followed Krishna, but was defeated by Krishna.  Krishna was about to kill him, but on a request by Rukmini to spare her brother's life, he tied up Rukmi with a strip of cloth and disfigured him by comically shaving him using the sword itself, leaving parts of the hair and mustache.   Rukmi was unable to go to his city until there was a full growth of hair on his head.  The episode is graphically described in the tenth chapter of  "Bhagavata".

There are many such reference to famous haircuts or lack of it in the Indian epics. In modern times also haircut has caught the imagination of mankind.  Hollywood movies have featured many personalities with famous and imaginative haircuts.  Yul Brynner, the Russian born  stage and film actor is well known for his clean shaven head.  He got his head shaved in 1951 to play the part of Mongkut, King of Siam in the musical play "The king and I" and appeared 4,525 times on stage in that role. This was a record for the "Most Durable Actor", until David Raven appeared  4,575 times as Major Metcalf  in  Agatha Christie's "Mousetrap".   Since he was appearing off and on on the stage, he carried the same clean shaven profile to his films as well and one cannot imagine Yul Brynner without a clean shaven head.  There were two movies, "The Haircut" in 1982 and  "Haircut" in 1995, besides an Album by George Thorogood by name "Haircut" in 1993.

The haircut of Rosy, played by Sarah Miles, in the David Lean film "Ryan's Daughter" is legendary.  Then there was  Persis Khambatta, Indian model and Actress and Beauty Queen.  Crowned as Miss India in 1965, she made waves when she appeared as Lieutenent Aliea in the 1979 firm "Startrek : The motion Picture".   We had our own bollywood film "Billoo Barber" and Indian version of Yul Brynner in Amarish Puri.  There was a film written, produced and directed by Kishore Kumar by name "Bhadti ka naam daadi" in which two characters played by Kishore Kumar and K N Singh fight for saving their beards and cutting off the others beard to win a "Long Beard" championship, only to be upstaged by a guest actor Ashok Kumar, in the end.

A recent report from Bangalore is a hair-cutter's success story.  Ramesh Babu was a seven year old boy when his father Gopal died.  Ramesh Babu's mother leased Gopal's hair cutting saloon for Rs. 5 per day and worked as a domestic help to bring up Ramesh Babu.  Ramesh Babu did his Diploma in Electronics, but went back to his father's saloon to work as a hair-cutter.  While working in the saloon he bought a "Maruti Omni" van and since he was in the saloon most of the time, started renting it out.   He found this profitable and then started "Ramesh Tours and Travels" and bought some more vehicles by borrowing from Banks.  Today, he is a billionaire and owns 90 vehicles including 27 luxury cars like Rolls Royce and  BMW.  He goes to work in a Rolls Royce Silver Ghost, but cuts hair for Rs. 65.  He works in saloon from 8 AM to 10 AM and 4 Pm to 7 PM.  From 10 AM to 4PM he works in the travel agency and again comes back at 8 PM to wind up the day's business.  His drivers are well dressed and well behaved, follow traffic rules and pay fines whenever they have to do so.  All vehicles are always leased and rented out, ranging from Rs. 1000 to Rs. 50000 per day.  Despite all these, he went to Singapore to learn cutting women's hair and works even on Sunday's without taking a day's off.

If you want a hair cut for Rs. 65 by a billionaire,  go to "Inner Space" saloon in Bangalore and meet Ramesh Babu.

Haircut Over the years

I had made a reference to "Haircut" in "Haircuts and Stock Markets", the reference being in the context of Banking and Financial Markets.  There was also a reference to "Haircut" in "Of Pure Haircuts and Cutters",  which was purely in haircut context.  Of course, the story of "Baalwale Baba" was not due to haircut and rather a result of lack it.  Thinking in these backgrounds, the evolution of "Haircut" and "Hair Dressing Saloons"  makes a journey "Down Hairy Lane".  More so because the hairline has gone down substantially for many of us over the years.

My earliest memories of haircut dates back to the villages in late fifties.  There was no fixed place for the hair-cutters and they were actually one-man moving saloons.  The word "Saloon" actually means a place where alcoholic drinks are sold and drunk or a place of public entertainment.  It also means a large Public Room, used for a specific purpose like even a dancing saloon.  All Western movies invariably have a saloon scene, and if we consider the number of shooting that take place in these scenes, a saloon should also mean a public place for shooting and killing people!   Remember all the scenes from the films of such legends as John Wayne, Henry Fonda, Lee Van Cleef, Paul Newman, Clint Eastwood, Yul Brynner and many others.  There are also scenes in which the Hero finds the intruder in the small mirror and shoots him down before we bat an eyelid.  But in the part of the world where I grew up, Saloon generally meant a hair cutting saloon only.  In my younger days I have seen these hair-cutters (barber was the generally used word) moving in the village streets in the morning with a bag containing their weapons, like knife and scissors with an aluminum pot or cup for keeping water etc., and hoping that some one will call them for a haircut or shaving so that they can earn their daily bread.  Life would never go on without them, but the society did not treat them properly.  But for their service to the society, there would have been many "Baalwale Baba" around us.  However, they made a very difficult living in those days and were never recognised as Artisans or Service providers like today when you have to meet them with appointments.  Their bag, usually a tin box or a leather bag, was their trade kit and whenever somebody calls them, they would sit on the stone bench or yard outside the house and open their kit displaying their wares.  They usually had either a leather belt or stone piece for instant sharpening of the knives.  Despite this he would be blamed either way, when the knife is sharp or not sharp enough.  If the knife was very sharp and inflicted small wounds, then he was not careful in his work.  If the knife was not sharp enough, then  for not caring for his implements of trade. Most people used their own piece of cloth, usually part of an old Dhoti or Lungi to cover themselves during the hair-cutting.  Shaving rounds had just come into use, a small round object with soap in it and a brush to generate lather to aid smoother shaving or cutting.  This was probably a gift from the British sahibs. The kit was called "Hadapa" in the local language.  Even today, whenever somebody opens his bag or briefcase and displays his wares or possessions, village elders use the expression "Oh, he has opened his Hadapa".  Hair cutting was usually followed by nail cutting or trimming.  The payment for their services was made mostly in the form of some grains and vegetables etc., as neither the served nor server had enough supply of coins with them.  As there was no prescribed fee which could be measured, the payment actually depended on the generosity of the giver and the persuasive capacity of the receiver.

There were certain days of the week or month considered as auspicious for hair-cutting and some other days considered as inauspicious.  The activity itself has a wonderful name - " आयुष्कर्म"  meaning  "An activity for increasing life span" and getting it done on an auspicious day was considered to result in longer life and one done on an inauspicious day was considered to reduce the life span.  What happens if it is unfortunately got done on an inauspicious day?  There is an easy remedy for this - getting it done again  immediately on the next available auspicious day!  Tuesdays were generally banned for such activity.  Even today many hair-cutting saloons have Tuesday as a weekly holiday for this reason.  It makes eminently good sense to have a holiday on a day when the business would be next to nothing.  Many people did not get it done on Fridays and New Moon Days or Full Moon Days.  It was not even to be thought of on days of Eclipse and on festival days.  People would even consult the local Astrologer or Priest for finding a suitable day for hair-cutting.  The barbers themselves kept a track of the auspicious day as they looked forward to them with great hope for prospects of good business.

The fixed place of business first apparently started in village fairs.  A group of villages had a fixed day of the week for the fair in their villages.  Between them, there would be a fair on almost all days of the week in their surroundings, thereby enabling the merchants to move from place to place and being busy throughout the week.  Each village had a specialty for the fair; some were well known for fruits and vegetables, some for sheep and fish, some for food grains etc, though there was no hard and fast rule for the items to be displayed and sold in such fairs.  The hair-cutters also used to move from village to village and sit in a regular place, usually below one of the trees for providing shade. This provided a place for the villagers to find the barber and there used to be brisk business for him throughout the day.  I have also seen fights among barbers when a regular place for one was occupied by another in such fairs.  The more enterprising ones and those tired of moving from village to village every day started hiring a small shop premises in bigger villages and towns and started the regular saloons.  The high legged chairs replaced the stone benches and razor blades took the place of long razors, though many still used the long razors for economic reasons.  Over a period of time they started using talcum powder at the end of the customer's session and aftershave lotions made their debut much later.  Certain types of plants were kept in earthen pots in front of the saloon and the place could be identified from the bend in the street itself by looking at these plants.  It is a sign of changing times that such plants like cactus, which were a trademark of hairdressing saloons, have now started adorning the living rooms of the affluent!  In due course of time other additions like Dyeing of hair, Head and back massaging have been added as value additions for visiting a saloon.

I remember going for a haircut once in two or three months to a saloon, walking all the way holding my father's finger and he always had some story to tell me on the way.  Walking with him was never dull and was always like moving with a library.  The barber would place a wooden plank on the hands of the chair for small boys like me to ensure that he could reach for the head without bending.  In the initial days my father had to hold me, especially when the knife was used so that jerks may not lead to injury.  Afterwards plank used to be there, but holding firm was not needed.  When we reached Middle School, we graduated from the plank to the main chair, thus marking a milestone in our growth.  My younger brother and myself were to go with my father on alternate trips.  Father and Son could have haircut on the same day, but not two brothers.  Brothers had hair-cutting  together only on two days in their life - on the funeral day of their mother and father.  After reaching the age of about 12 years, we were visiting the place alone carrying the prescribed fee safely in our pockets.  The saloons generally used to keep some newspapers and magazines for the customers to read before their turn came.  Some of them used to be even two weeks old and many pages missing.  The magazines I remember were "Janapragati" and  "Filmfare"weekly and "Chandamama" and "Kasturi" monthly.  In fact, reading these magazines while waiting for the turn at the chair developed the habit of reading magazines and books in me.

The persons manning these saloons were very talkative and always had something to discuss with their customers.  Some of them were remarkably well informed about the current affairs as well as epics and literature.  The topic they used to choose for discussion depended on their own knowledge and understanding of the customer.  It used to be Cinema or Agriculture for the general customers and more specific topics like Music and Epics for the more educated.  Some of the interesting topics discussed which I can recollect include the criminal case of the famed musician M K Thyagaraja Bhagavatar in Lakshmikantan murder case of 1944 and Belur Srinivasa Iyengar, who was murdered in 1956.  They were well informed about music and were also playing "Naadaswaram", a pipe instrument in functions like marriage etc.  They usually were addicted to drinking and those who did not have this habit made a decent living from their earnings.  They were also respected for their talents in music and one hairdresser I knew in my childhood was refered as Dr. Narasimhaiah in our household.  He was able to talk at length on Saints Purandaradasa and Thyagaraja and quote their compositions with raaga and taala etc.  The honorary doctorate was conferred on him by us, not any University, for his knowledge and the range of topics on which he could indulge in a discussion.  His brother Nagaraj suffered in comparison and was only given an honorary MA degree, due to his lack of knowledge in some areas. 

Today's Saloons have come a long way from those days.  Pictures of different hairstyles on the walls have been replaced by costly paintings.  Old magazines are replaced by fresh supply of dailies in many languages and chic magazines.  Bonsai plants have entered the cutting hall and cactus pots which exited from the outside itself.  Air-conditioning and revolving chairs are the norm now.  Running hot and cold water taps with large washing basins have replaced aluminum cups. The dressers talk less as they are busy watching cricket or football  matches or films in expensive colour TVS. Some of them offer Coffee or Tea as soon as you enter their premises.  They are also ready to get breakfast or lunch if you indicate.  Computer images have replaced printed catalogue of hair styles.  Some of them entertain you only with appointment.  Value added service like Sauna bath and body massaging services are thrown in.  Fresh towels and blades are provided for each customer to aid prevention of AIDS.  Today, there are Saloons ranging from providing basic and pure haircut to catering to luxurious hair styles and life style to those who are interested and capable of affording them.

Of Pure Haircuts and Cutters

After a piece on "Haircuts and Stock Markets", a piece or even two/three pieces (especially because the subject is one of cutting) on pure haircuts and hair cutters is indeed required.  Otherwise we may forget the original haircuts and remain confused that haircuts are purely for stock markets and investors and not for the human beings for whom a haircut is an important routine of life!

"Kasturi" is a monthly Kannada Magazine published from Hubli by "Lokashikshana Trust" which is also known for its Kannada daily newspaper "Samyukta Karnataka".  The trust is in existence for over 70 years and has rendered yeomen services to the people of Karnataka.  Veterans like Ranganatha Diwakara (R R Diwakara) and Pa. Vem. Acharya have guided the publication over the years. Kasturi has modeled itself on the lines of "Readers Digest" and is now in its 55th year of publication.  Pa. Vem. Acharya, who later on became the editor of the magazine also, used to write well informed but humorous articles in the magazine.  Some forty five years ago, I read an article written by him titled "Kalaprapoorna Ayushkarma Shaala" which would translate to "Artistic Hair Dressing Saloon".  Venkateswarudu, who was the Proprietor and only artiste in the Saloon, had a policy for attending to his customers.  He would not attend to any customer who directs him to cut the hair in any desired style or shape.  His logic was simple.  Any patient going to a Doctor does not suggest or demand that he should be given such and such medicine.  It is left to the doctor to diagnose and decide as to what is the disease and what medicine should be prescribed to remedy it.  The patient has no right to interfere with this freedom of the Doctor and should only place himself in the hands of the Doctor and leave the rest to him.  Similarly, the Hair Dresser is the sole and final authority to decide what type of hair dressing should be given to the "particular Head" placed literally and practically in his hands.  He is the artiste working on his subject, or the better word would be "the Model", and he would not brook any interference in his field of expertise.  The Story has a sad ending as the customers do not accept this line of thinking and Venkateswarudu had to close down his Saloon since he neither wanted to surrender his artistic freedom nor had any "Models" to work on. 

First haircut in his life for a boy is considered as an important event in parts of India and is celebrated with lot of fanfare by inviting near and dear ones.  It is called "Choodakarma" or "Chandika Mahotsava" and many people celebrate the event  by making a trip to their family deity.  This is one of the "Shodasha Karmas" or "Sixteen important Stages or rituals".  The actual area of head tonsured depends on the family custom.  Some people offer only a part of the hair on the head - said to be equal to a "Goshpaada", meaning an area equal to a cow's front feet, say about 12 square inches.  Some others do not have any such rule and the entire head is tonsured till the shining head in its entirety is clearly visible to every one.  I also know of families who believe in equality of gender, though they may not believe in it in other aspects of life, and get the head of a girl child also similarly tonsured.  A generous layer of "Srigandha" (sandalwood paste) is applied on the shaved head after a holy bath and before the  "Darshan" (viewing) of the family deity.  One of the reasons for applying this is due to its anti-septic quality and protect the tender skin of the child after a barbarous attack. A similar haircut is given to the boy before "Upanayanam"or the holy "Thread Ceremony" in some parts of the country. Tonsuring the head and keeping it that way thereafter is one of the basic rituals of "Sanyas" or "Renunciation", a passport for entering the priesthood or a monastic order and thereby conferring on a right to make all hairy heads bow before you thereafter.

A practice of offering the hair or tonsuring the head to some God or Goddess in accordance with one's belief to cure a disease or fulfill some wish is also prevalent, though the practice is fast losing its currency.  Tirupati is one such place where thousands offer their head (it is actually only hair on the head) to the Lord of Seven Hills.  The temple in Tirupati earns millions of dollars every year by sale and export of such hair offered by the devotees.  This hair is further used for manufacture hairy beauty products and one of the objectives of such products is to cover baldness.  "Tirupati Kshowra" (Head shaving in Tirupati) is a well known and oft quoted proverb or idiom when someone leaves a task unfinished and takes another job, thus leaving many unfinished tasks and causing irritation to others. Origin of this practice has a very interesting study.  In olden days, devotees had to purchase a token by making payment of a prescribed fee at the Temple and surrender the token to the person tonsuring the head. Hair shavers were later paid on the basis of tokens collected by them by multiplying the number of tokens by the amount payable for each token.  In order to ensure that they have sufficient "heads" and tokens, shavers used to cut a small portion of the hair and jump at grabbing the token from the next  "arrival" and prevent them from going to the next shaver.  the devotees had to perforce wait for this shaver only, as any other shaver would not accept the "Head" without a token.  I am told that this practice is now given up, though I have no personal experience of the same.  I was myself saved of this ordeal in my younger days since thankfully my family was not subscribing to this practice.

Tonsuring one's head is also a ritual practiced in several parts of the world, before embarking on holy rituals like cremation of a dead close relative.  "Garuda Puraana" states that such an act brings infinite happiness to the departed soul and we have to perforce believe it since no departed soul has yet come back to dispute it.  One practical aspect of such a practice as experienced by me and many others is that the shaved head provides protection against "common cold" during the days of rituals when innumerable baths have to be taken while performing rituals.  This also provides some uniformity among the persons (usually brothers) performing such religious tasks by giving them a "common look".  Of course, there is an associated problem of identifying our kith and kin when one goes to some holy places where number of such ceremonies are being done at the same time, as everyone performing these rituals appears to be close to us due to multitude of shaven heads.  This is best experienced when one visits Ttirupati or Gaya.

There was an inhuman practice of shaving off the head of a widow, at the death of her husband, presumably making her unattractive to look at.  Civilized world can heave a sigh of relief that this barbarous practice is no longer in existence, but for those who have seen such practice decades ago, this is still a scar in the memory lane.

While on the subject of haircuts, I am reminded of a delightful story I had heard from my grand uncle in my childhood.   This story had no title to it, but I have given it a title,  "Baalwale Baba", which roughly means "The sage with long Hair".  Roughly not because his hair was rough but because strict translation of such words is somewhat impossible.   In a village there was a very poor man who had no sources for getting two square meals a day.  Needless to say that he could not pay for a hair cut.  He was very irregular in taking haircuts.  His days became even more difficult, sometimes one wonders whether that was possible, and he could not take a hair cut for a very long time.  Once he went to a far away place on some work and unable to find a lodging place, he dozed off below a big tree.  When he got up from his slumber, he found that many people had kept fruits and small coins before him and some were even prostrating before him. The growth of hair on his head and beard became so much that people were mistaking him to be a holy man and this notion led to this spectacle.  He was happy that his immediate problem of food was solved!  He stayed there itself and in due course of time, the stream of visitors increased.  He became famous as "Baalwale Baba" as nobody knew his real nae and he did not care disturb his new found status by disclosing his past.  After some years he actually started meditating and found divine light and enlightenment!  Somewhat similar to a hunter turned sage, Vaalmeeki, the author of epic "Raamaayana".

The faster growth of hair and nails on human body is said to be a symbol of good health.   Of course, like two Economists, two Doctors may not agree with this statement.  The topics to be covered under "Haircuts" is also growing quite lengthy, with more and more related topics cropping up.  May be I have to cover them in two more pieces, titled "Historical Haircuts" and "Evolution of Hair-cutting Saloons".

Haircuts and Stock Markets

I had referred to some reasons attributed for the fall of the Stock markets in the piece titled "Stock Markets or Monkey Business".  Some of them were like earthquake in Japan, higher inflation going up still higher,  great difficulties of  Greece or even that there was not enough steam for markets to move up.  One reason I forgot to mention was Haircut!  

A friend has sent me a joke about haircut.  A high profile Hair Dresser in Delhi has regular VIP visitors.  In fact, he is reported to have exclusive rights on big heads, political and bureaucratic ones.   Nowadays, he has stopped attending to general public.  Like we used to have "Raajapurohitas" who would attend to rituals of the Royalty only and not accessible to the common man.  Not affordable as well.  This Hair Dresser had a visit by a high profile CBI official last week.  The Dresser greeted the official warmly and started to clean the already clean chair in an invitational gesture for a haircut or hair dressing.  The officer brushed him aside and curtly told him that he had not come for a haircut this time and he was so busy he had no time for a haircut.  He asked the Hair Dresser whether he was an agent of Baba Ramdev.  The surprised Hair Dresser said he was not.  The Officer asked him whether he was an agent of Anna Hazare.  The Dresser again replied he was not.  The officer now asked him why he was talking too much lately about Swiss Bank Accounts and asking too many questions  to VIPs about this.  The Hair Dresser politely replied, "Sir, the moment I ask these people about Swiss Banks, all their hair stand up and that makes my work very easy.  That is why I ask them question about Swiss Banks.  Otherwise I neither have an account in Swiss Banks nor I have any interest in Swiss Banks".  The Officer warned the Dresser against asking too many questions about Swiss Bank accounts in future.  The Dresser was surprised and enquired why it was so.  The Officer replied that the agencies were closely monitoring "Swiss Bank Issue" and since they could not make much headway with Swiss Banks, they were now concentrating on people who were asking questions about them.

Stock Markets all over the World had a heavy fall on 27th and 28th November 2011 on a report that European Banks had agreed to take a voluntary haircut of 50% on Greece bonds.  The Banks took a 50% voluntary haircut, but the small investor once again had the pleasure of an involuntary 100% haircut. 

In financial parlance, a haircut simply means the margin deducted from the market value of an asset accepted as a collateral.   It is the value deducted from the market value of the security for considering lending against it.  Higher the haircut, lower the amount of loan given.  Just like higher the length of the hair cut during dressing, lower the length of hair left on the head or wherever the hair is cut or kept.  The percentage of haircut is decided on the risk perception associated with the security.  Even when haircut is applied for deciding the amount of the loan, the lender has a full value of the security.   Lower haircuts allow for more leverage or higher entitlement for borrowing.  Haircut has an important role on many kinds of trades, for example for Repo or Reverse Repo transactions and borrowing from the Central Bank of a Country.

Then what actually happened when European Banks voluntarily accepted a haircut of 50%?.  Why should it affect us as investors?  When Euro zone was formed and a single currency was accepted by all the member countries, the fundamental strength or weakness of the economies of individual countries were set aside and the financial dealings became to be treated on an equal footing.  Borrowing of a Country and its entities depends on the "Rating of a Country" and a Country with higher rating can borrow higher amounts more easily on better terms.  Better terms like better interest rates as the risk of default is perceived to be low.  Financially weaker countries like Greece were bracketed with economically stronger countries like Germany and France and hence were able to borrow higher amounts at cheaper rates which they would not have been able to borrow on their own strengths.  This could not go on for ever and ultimately the borrower has to pay back the money and unless the economy is stronger and generates surpluses, the risk of default is always lurking in the corner.   By accepting higher haircuts, the lending against Greece securities would come down and thus partly remedy the situation.  But in market perception, holding such securities with even higher haircuts is risky and hence the consequent turbulence in the market.

The issue of haircut is technical and has assumed higher importance in view of Basel III norms, which is even more technical.  But for the small investor, whether it is technical or non-technical,  higher or lower, more important or less important,  haircut has resulted in a real cut of his investments.