Ambedkar's Contributions to Indian Economics Author(s): S. Ambirajan Source: Economic and Political Weekly, Vol. 34, No.

46/47 (Nov. 20-26, 1999), pp. 3280-3285 Published by: Economic and Political Weekly Stable URL: http://www.jstor.org/stable/4408623 Accessed: 23/02/2010 06:36
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PERSPECTIVES
Those who studiedeconomicsandwrote economic treatises were not strictly speakingprofessionaleconomists.They used economicsas a politicaltool. Thus the distinct contributionsof Dadabhai S Ambirajan GovindaRanade, V G Naoroji,Mahadev Joshiandnumerous otherthinker-activists remain polemical writings notwithstanding Ambedkar's writings on monetary policy, public finance, public solid and substantialanalyticalcontent. expenditure and landholdings reveal his keen interest in and wide With the 20th century dawning, and ranging grasp of policy-oriented welfare issues. His approach to universitiescoming to be established,a economics reflects his uncompromising modernist bent of mind, firmly professional academic economic comrooted in the Judeo-Greek enlightenment tradition. munity began to evolve. A numberof Indians wentabroad the during firstquarter I am deeply touched by the honour to honour Ambedkar by awarding of this centuryto get advancedtraining bestowed upon me by the University of posthumous titles, instituting fellowships in the disciplineof economicsto become Madras to give the Ambedkar Memorial and other memorials, is doing all this, not professional economists,andthey set the Lecture.I must at once state thatI accepted for genuinely honouring the departed tone of economics studies in Indiauntil this invitation only after considerable leader but with the very utilitarian-selfish the 1960s. In this first group of foreign hesitation because I am by no means an motive of securing the votes of those in trainedprofessionaleconomists we can expert on Ambedkar's life, politics, legal whom he tried to instill a sense of self- nameC N Vakil, P N Banerjea, Jehangir and social writings, as well as his brilliant, respect. I must also make another Coyajee,Gyan Chand,D R Gadgil,P S if chequered, career. However I have had melancholy reflection that in these days Lokanathan, P Niyogi, P J Thomas, J some acquaintance with his writings in when the minority communities are P Pillai, John Mathai, Radhakamal economics, and it is my intention to claiming affinity with dalits - no doubt Mukherjeato name a few. Ambedkar to to highlight a few aspects of his contributions with the intention of strengthening their belonged thisgroup receiveeducation to the study of Indian economics. Before electoral clout - it would be worthwhile abroadundersome of the most eminent I proceed, I wish to remark on one aspect to remember that they treated dalits as no economistsof the time,butunfortunately of Ambedkar's present status with which better than the caste Hindus. Ambedkar heleftthepursuit academic of professional manyof you may not agree. I am somewhat wrote of his experiences: Although on economicsverysoonafter comingto India distressed to see that he is portrayed as a conversion to Christianity, the husband having for served abriefperiod professor as leaderof the 'dalit' communityandnothing had become liberal in thought "the wife of political economy at the Sydenham else. Partly it is the fault of the Indian had remained orthodox in her ways and Collegeof Commerce, Bombay.Ourmain politicalleadershipin thepost-independent would not have consented to harbour an interest today is to examine his solid era.It succeeded in its effort to marginalise untouchable in her house...I leart that a contributions the subjectbeforehe left to him politically. But equally it is the fault person who is an untouchable to a Hindu thediscipline alsoseewhether and anything is also an untouchableto a Parsi...a person of the deep understanding economics of the community itself for having of projectedhimexclusively as its own leader. who is an untouchable to a Hindu is also he had acquiredduringthe early years, This led to the repercussion of other much an untouchable to a Mohammedan" (XII, surfacedlater.

Ambedkar's Contributions to Indian Economics

inferior people propelled as leaders of other communities, and the result was that Ambedkar got equated on a politicointellectual plane with regional pygmies devoid of any significant nationalpresence. It is my conviction that in reality we have hadonly two majorpersonalitieswho could be considered the founding fathers of modern India. Vallabhbhai Patel unified and organised whatever bits and pieces left of a brutally partitioned geographical entity into a nation state. Ambedkar provided the cementing framework in the form of a Constitution that gave the newly born state a measure of feasibility and stability. All the remaining leaders were mere bit-players in this great story of the building of our sovereign democratic republic. I may be wrong, but there is enough ground for suspicion that the present Indian political class which seeks 3280

677, 678, 685). There must be something in the Indian soil and ethos that despite the lofty ideals of all religions, in the social and human sphere, much barbarism prevails. While Ambedkar achieved great things in life, especially in the national-political arena, it is a matter of regret that he did not pursue economics which was his main interest during his early career. Ambedkar was among the first set of Indians who were trained in economics systematically and practised it professionally. India has had a hoary tradition of economic studies in ancienttimes as classics likeArthasastra, Sukraniti, and Tirukkural will attest. However the study of economics untainted by these texts and receiving its inspiration from the largely western (Judeo-Grecianenlightenment) traditionfor analytic study began in the middle of the 19th century.

The first thing that strikes us is that Ambedkar studiedunder foremost had the authorities thetimebothattheColumbia of in University theUS andat theUniversity of London.He came underthe influence of the outstanding American philosopher of the time,JohnDewey who was among Ambedkar'steachers at the Columbia the University.Dewey hadforsaken then dominantHegelian theoryof ideas, and formulatedan instrumentalist theory of knowledge, which conceived ideas as instrumentsto solve social problems. Ambedkar interalisedDewey'smessage, which considered philosophy, in its essentials, as criticism involving reconstruction.He could also have been influencedby one of the leadinganthropologists of the US, A A Goldenweiser
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in whose seminar, Ambedkar was remarkedin the preface of the Indian to encouraged presenta paperon castes edition of The Problem of the Rupee in in Indiawhichwas laterpublishedin the 1947. It would appearthat even at that Indian Antiquary (May 1917). What was stage,he hopedto comebacktothesubject the from1923 was teacher bybringing financial most fortuitous Ambedkar's history of public finance,Edwin R A Seligman onwardsin a second volume, and wrote of "I can give them (readers)an assurance who was thenthe McVickar professor atColumbia, firmly that they will not have to wait long for and economy political to placed among the most outstanding volumetwo. I am determined bringit studentsof publicfinanceandhistoryof out with the least possible delay" (VI, economicthoughtat thattime. You will p 323). But alas! within two monthsof En- writing this, India became free, and know thathe editedthe monumental was caughtonce more in the cyclopaedia of Social Sciences published Ambedkar in the 1930s. Subsequently, when world of law and politics, and he could Ambedkar went to London,his teacher not keep this promise. Edwin wasanequallyeminent economist, II Cannanwho was also an acknowledged I shallnow examinefourbroadthemes authority on the history of economic concernedhimself in his thought. It is worth rememberingthat thatAmbedkar editionof AdamSmith'sWealth professional Cannan's writings. Firstly,thepolicies in by of Nationswas themostusededitionuntil examined Ambedkar hisTheProblem very recentlywhen the Glasgowedition of the Rupeemainly,andelsewhere,deal with monetary standardsas they had replacedit. the few Ambedkar's majorwritingsare easily evolvedduring previous decades. listed because after the late 1920s, he The basicIndian unit,therupee, currency seems to have written almost nothing, has hada long history.Until 1893, it was which means though he has made some extremely based on a silver standard insightfulcommentshere and there one that the Indianrupee was based on the in at of whichI shallelaborate the end. The valueof thesilvercontent it. From1841 major economics publicationsare The onwardsgold coins also became legal Problem of the Rupee: Its Origin and Its tenderat one mohuras equalto 15 silver Solution (P S King and Son Ltd, London rupees.Owingto vastgold discoveriesin 1923), and The Evolution of Provincial Australiaand US, gold value fell, and Finance in British India - A Study in the from 1853 onwardsgold coins ceased to Provincial Decentralisation of Imperial be legaltender. Though manysuggestions Finance(P S King and Son Ltd,London were made to introducegold coinage after1872,thesewerenotheeded 1925).Thereis one significantacademic especially due paperhe wrotein 1918, 'SmallHoldings despitefrom 1873 onwards, to enorin IndiaandTheirRemedies'in Journal moussilverdiscoveries, priceof silver the of the Indian Economic Society, Vol I, fell andhence the price of rupeeslipped 1918. Besides these, there is his un- in termsof gold. From1872to 1893,this MA and acted as a continueddevaluation the of published thesis,Administration Finance of the East India Company Indiancurrencywhich while was good (Columbia University,1915).Apartfrom for Indianexports,was not good for the these academiceconomicwritings,there Indianeconomy,it had to producemore arehis Memoranda evidencegiven to rupees to remit expenses undertaken and in various government commissions, Englandby Indiawhich were in sterling in bodies, (i e, gold) terms.In 1893,thegovernment speeches thedifferent legislative and book reviews which all have some stopped coining silver rupees though economiccontent.All of thesehavebeen agreedto coin rupeesin exchangeof gold broughttogetherby the governmentof at a ratio of one poundfour pence per Maharashtra a multi-volumedcom- rupee.It becamemanaged in with currency plete edition, Dr Babasaheb Ambedkar: the government reserving the right to Writings and Speeches. It is a matter of coin rupees whenever it was found someregret whilemuchdevotionand necessary. The idea was to introduce that dedication gone into the production eventually a gold standardwith gold has of this edition, adequate attention to currency the replacing existing(managed) In properediting and scholarlyannotating silverstandard. 1899,at thesuggestion has not been tendered. of the currency committee headed by Earlier remarked itwasunfortunate H H Fowler, Indianmints were thrown I that for the economics profession that opento issuegold coins.Goldwas sought Ambedkar decidedto "changeover from to beusedwidely,butitalsorecommended economics to law and politics" as he the silverrupeeto remain unlimited legal
Economic and Political Weekly Novewnter20, 1999

becauseunder tender.This was mistaken should have been gold currency,rupee token coin. From now on, many events tookplacetill the gold exchangestandard in cameto be established 1906.According to thissystem,silverrupeewasguaranteed into convertibility sterlingpounds(based on gold value)at a fixed price,andmake it available without any limit. The accumulated gold in India, instead of supportinga gold standardwith gold in currency India,was keptin Londonto maintain the stability of the rate of down broke However system the exchange. rise in 1916withtheenormous inthevalue of the silver. Silver rupee more or less ceasedto be merelytoken,andthesystem effectively became silver standard. Ambedkar'swritings took all this and for gold stridently aproper standard argued as withgoldcurrency hewashighlycritical of the gold exchangestandard thoughthe latter received theoretical support powerful from all the then leading authorities including John Maynard Keynes. Ambedkar's main thrustwas to criticise made the"reckless issueof rupee currency" possible by the gold exchangestandard. of Hehighlighted perversity thesystem the because gold reserves which were supposedto guarda runon the currency, depend actually upon adding to the the stock.Ingeneral removing by currency of automaticity thecurrency supplywithin the country, systemvests the governthis mentenormous powerto bloatthe money given supply.The excessive importance to maintainthe stabilityof exchangeas againstinternalstabilityof the value of was policyforIndia, currency nota proper a he contended.Neitherwas Ambedkar votary of deliberate lowering of the exchange rate whether planned or unplanned. Low exchange rate increases exportsand boosts internalprices. This benefitsthe trading classesat theexpense of the poorerpeople at home. Ina goldexchange the standard, coinage is manipulated thegovernment keep to by it at parwiththe valueof gold.Ambedkar asked:Was the job of currency management only important the amountof for in market? goldit will procure theexternal not, because "what really Obviously concerns thosewho use moneyis nothow muchgold thatmoneyis worth,but how muchof thingsin general(of whichgold is an infinitesimalpart) that money is worth.Everywhere, the therefore, attempt is to keep money stablein termsof commoditiesin general,andthatis butproper, forwhatministers thewelfareof people to is not so much the precious metals as
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commodities and services of more direct utility" (VI, p 563). Ambedkar's commitment was internal stability, and he was convinced that only an automatic system based on gold standardwith gold currency could achieve this desirableend. Like every economist of his generation, he was a believer in the quantity theory of money and was afraidthat governments will tend to artificiallyincreasemoney in circulation. In his memorandum given to the Hilton Young Commission in 1925 he pointed out:"amanagedcurrencyis to be altogether avoided when the management is to be in the handsof the government". While there is less risk with monetary management by a private bank because "the penalty for imprudent issue, or mismanagement is visited by disaster directly upon the property of the issuer". In the case of the government "the chance of mismanagementis greater" because the issue of money "is authorised and conducted by men who are never under any present responsibility for private loss in case of bad judgment or mismanagement" (VI, p 627). In short, Ambedkar's conclusion is clearly towards price stability through conservative and automatic monetary management. This is of such currentrelevance thatin these days of burgeoning budget deficits and their automatic monetisation, it would appear thatwe could do with an effective restraint on liquidity creation throughan automatic mechanism. The second theme that Ambedkar discussed in his academic publication The Evolution of Provincial Finance in British India (1925) relates to public finances. Ambedkar draws his main conclusions from his study of the Indian system which are probably even more relevant now than it was at the time he wrote. What arrangements can be made in a public fiscal system that will enable it to be "administrativelyworkable"?The main objective according to him was: "To make administrative polities independent by requiring them to finance themselves entirely out of their own respective resources without having to depend upon one another must always be regarded as a very important end to be kept in view in devising a new financial arrangement". This is not always possible because of "several concurrent or overlapping tax jurisdiction". The two methods to solve the problem, i e, 'system of divided heads' and 'contributions' both have advantages and disadvantages. Ambedkar looked at some of the consequences of the Montague-Chelmsford reforms in provincial finances. What he

cites from the despatch of the secretary of state could have been written now: "If the financial stability of the Provinces is not to be undermined, with ultimatejeopardy to the Government of India itself, it is impossible to contemplatethe continuance of a series of Provincial deficits financed by borrowing either direct from the public or from the Central Government". The similarity does not end. The provinces proposed an increase in their resources by revising the financial arrangements enunciated in the Act. What the secretary of state said in 1922, might have been said by Yashwant Sinha today: "Equilibrium can only be achieved by reduction of expenditure and the adoption of measures which will lead to an increase in revenue". Ambedkar of course is scathing towards what he calls the "very unreasonable attitude"of the provinces, and points out how they have all failed their duty. Years later in 1939, he was to remark that "patriotism vanishes when you touch a man's pocket and I am sure that the States representatives will prefer their own financial interest to the necessities of a common front" (I, p 347). He squarely blames the governments for lacking political will to achieve efficient and equitable economic administration: "National prosperity may be great and growing andthe increaseof nationalwealth may be proceeding unchecked. If under such circumstances enough revenue is not obtained the fault does not lie with the social income. Rather it is a fault of the government which must be said to have failed to organise and marshalthe national resources for fiscal purposes. The same is to some extent true of the Indian government. As for the base of taxation, Ambedkar considered income from land as the most likely source to augment state revenue, but he was vehemently opposed to the "pe-nicious effect of the system which bases the tax on a unit land held" (VI, 302ff). Ambedkar knew the problem clearly of tax proposals.Underthe diarchy, when the government is run by a ministry recruitedfrom the elected members of the provincial legislature, it would be futile to expect tax increases. More generally he said that if "nomination was the general mode of obtaininga seat in theLegislature", it was not necessaryto "mindthe prejudices of the electors". If however, the "seat is in the gift of the elector a candidate to the Legislature who proposes to touch his pocket has a small chance of success, even though the new taxes are to result in more than proportionate benefit". In any case a political party which "has won power

from a bureaucracyby accusing it of heavy taxation cannot easily disgrace itself by continuing the same policy". But can they reduce public expenditure by enforcing administrative economies? Not likely because under diarchy, the governor in council will not allow retrenchmentas he has no particular interest in effecting economies in public expenditure. The result was that "the chances of an early equilibrium in Provincial finance are very small". One wonders whether Ambedkar was talking of state finances in India in 1999? Ambedkar's criticism of diarchy has a modern ring to it. Again in Ambedkar's words: "if there is no sound finance in the Provinces it is because diarchy is not a good form of government. Now, why is diarchy not a good form of government apart from its basic undemocratic character? The answer.... is very simple....it is opposed to the principle of collective responsibility". If an administrationhas to work smoothly, "it must recognise the principle of impartibilityof governmental work and a collective responsibility of the administrators in the execution thereof'. It is not easily understoodthatgovernment work by nature is invisible because in practice "thefunctions of government can be and commonly are partitioned, as they are between local bodies and between departments" (VI, p 303). This does not mean thatthere is no "common threadthat runs through them all: that no function of government acts in vacuo; that each reacts on some otherfunction, andthatthe various functions cannot act at all produce orderly progress unless there is some force to harmonisethem".Collective responsibility is this harmonising force. The conclusion is unmistakable: "Hybrid executives, division of divided responsibility, functions, reservation of powers, cannot make for a good system of government, and where there is no good system of government, there can be little hope for a sound system of finance" (VI, p 307). There is some discussion on public expenditure.The main point he makes is that an alien government cannot be expected to use the funds it has to the betterment of the people. As he made it clear: "if the Executive in India did not do certainthings most conducive to progress it was because by reason of its being impersonal and also by reason of its character, motives and interests it could not sympathise with the living forces operating in the Indian Society, was not charged with its wants, its pains, its cravings and its desires, was inimical to its aspirations, did not advance

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education, disfavoured Swadeshi or snapped at anything that smacked of nationalism,it was because all these things went against its grain".In other words, the government"notbeing of the people could not feel the pulse of the people". One wouldhave expected thatAmbedkarwould have given detailed treatmentto problems of taxation and expenditure having been a student of Seligman, but as his concerns were different, he did not give much importance. But his interest surfaced on these issues when dealing with the Indian Constitution almost at the fag end of his professional career. This leads me to the third theme of Ambedkarian economics. One has heard of the famous canons of taxation enunciated by Adam Smith more than 200-years ago, but has there been any similar canons regarding public expenditure?Nothing so pithy and pointed came my way in my not necessarily exhaustive studies of public finance literature until I happened to notice recently such canons in a most unlikely place. B R Ambedkar while discussing the functions of the Comptroller and Auditor General said in 1949 duringthe framingof ourConstitution that governments should spend the resources garnered from the public not only as per rules, laws and regulations, but also to see that "faithfulness, wisdom and economy" have gone into the acts of expenditure by public authorities. Firstly, the question of faithfulness. Faith in this context as defined by the dictionary is "duty or commitment to fulfil a trust,
promise ..." A main reason for the existence

of public finance is that human beings living in society requirecertain things like roads, law and order, etc. that cannot be enjoyed exclusively. As the costs and benefits of such items cannot be internalised, they will not be supplied through the free marketmechanism. Governments exist to provide these common requirements. Citizens in democratic forms of government are promised by their representatives to improve their welfare by judicious provision of such public goods and services, and they place their trust in the government by delegating authorityto take taxation and expenditure decisions. How the individual acts of public spending resultsin the augmentation social welfare of may not always be obvious because of spillovereffects andlong gestation periods. When the citizens are thus not in a position to comprehend clearly the consequences of government action, it is so easy to mislead them by false claims. Hence it becomes all the more necessary for the

government to be faithful to the original based on the democratic will of the people, intentions. For example, if a certain sum allocation of that total among competing is allotted to a centre for higher education demands and the mannerof utilisation fall to improve its facilities without specifying within the domain of these canons. the item of expenditure, a more faithful Following the canons scrupulously in way of spending would be on libraries, individual items of expenditure cannot laboratories and other items of teaching always eliminate problems arising out of andresearchratherthanon frivolous things the broader economic policy pursued by such as statues of past professors or air the government. But they can mitigate the conditioned limousine for its vice harmful effects of ill-considered policies chancellor. The fidelity to the original of our governments. In the present context intention must be tempered by 'wisdom'. of high fiscal deficits, a rigorousapplication For example, the original intention of the of the Ambedkar canons can help reduce policy may be to spread appropriate the quantum of public expenditure. information through expenditure on the The last theme I wish to discuss relates activities of the DAVP or information to his ideas on agrarian economy. In his departments. But such a policy when paper 'Small holdings in India and their executed may be faithful to the intentions remedies' (I, 453ff) published in 1918, he but may not be wise. In other words, takes on a problem that is still haunting expenditureshould transcendthe personal, Indianagrarian system. At thattime, British the ephemeral and the showy, but must be administratorsand academics in Indiawho done with circumspection and under- were used to their own country where standing of the deeper issues involved. large agricultural land holdings was the While sagacity, prudence and common norm,were appalledatthe low productiv ':. sense are the hallmarks of a just and wise of Indian land. This they ascribed to ti; ruler, he should also possess experience minuscule size of the farm land cultivated andknowledge thatcan be appliedcritically by Indian peasants. A number of sugand practically in specific areas. In the gestions emanated from sympathetic context of ajust utilisation of public funds, observers like H S Jevons of Allahabad economic wisdom becomes a paramount University, HaroldMannandG F Keatinge necessity. But mere apparentfaithfulness of Bombay, and the committee appointed to the original intentions and wisdom are to make proposals on the consolidation of not sufficient in themselves for public small and scattered holdings in the Baroda expenditure to achieve social well-being. State (1917). They all proposed to conThe importanceof the thirdcanon of public solidate and/or enlarge the holdings in the expenditure takes a special meaning here. hands of individual farmers through 'Economy' in public expenditure does not interesting administrative measures. simply meana low level of public spending, Ambedkar made a critical examination of but it is the intelligent use of funds so that the above, and in the process arrived at c verypaise fetches the most benefit. Those some very advancedconclusions. To begin in charge of public funds must strive to with, he struck at the very root of the evaluate alternative methods of achieving proposals by arguing that there can be no the objectives and see to it that leakages such thing as a correct size of agricultural do not occur. The remarkablething about holding. As he argued, land is only one Ambedkar's canons is that they are ism- of the many factors of production and the neutral.One can follow a policy of a large productivity of one factor of production or a small public sector and yet the is dependent upon the proportionin which principles behind these canons are the other factors of production are applicable. The canons are sufficiently combined. In his words: "the chief object flexible so that expenditure decisions can of an efficient production consists in be related to the state of the economy. For making every factor in the concern example, what may be economic wisdom contribute its highest; and it can do that in undertaking a particular item of ex- only when it can co-operate with its fellow penditurein one country may be economic of the required capacity. Thus, there is an stupidity at other times and other places. ideal of proportions that ought to subsist The canons emphasise thatthe expenditure among the various factors combined, decisions should closely relate to the though the ideal will vary with the changes specified objectives and the available in proportions".From this he proceeds to resources besides ensuring economy, say that if agriculture "is to be treated as efficiency and effectiveness in the imple- an economic enterprise, then, by itself, mentationof government decisions. While there could be no such thing as a large or the determination of the aggregate level small holding". If this is so, what is the of expenditure is a matterof overall policy problem? Certainly it is not due to a want

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of efficiency in utilising whatever the peasanthas. Ambedkarcites with approval an English civil servant: "The ryots have a keen eye to the results of a good system of farming as exhibited on model farms". Ambedkar's answer rests on the inadequacy of other factors of production. The insufficiency of capital which is needed for acquiring "agricultural stock and implements" arises from savings. But as Ambedkar remarks "that saving is possible where there is surplus is a common place of political economy". Even this is a surface reason, the ultimate cause being "theparentevil of the mal-adjustment in her social economy". This is partly defined as the non-availabilityof sufficient land in India to give her prosperitythrough the means of agriculture alone. There is almost a prophetic statement made by him long before modern theorists of development systematised notions of disguised unemployment or underemployment: "A large agricultural population with the lowest proportion of land in actual cultivation means that a large partof the agriculturalpopulation is superfluous and idle." Even if the lands are consolidated and enlarged and cultivated through capitalistic enterprise, it will not solve the problem as it will only aggravate"theevils by adding to our stock of idle labour". The only way out of this impasse is to take people away from land. This will automatically"lessen anddestroy the premiumthatat present weighs heavily on land in India" and large "economic holding will force itself upon us as a pure gain".He concludes that"Industrialisation of India is the soundest remedy for the agriculturalproblems of India". This can generate adequate surplus that will also eventually benefit the agriculturalsector. Indeed a shift from primary industry to secondary industry is vital and it must be attemptedseriously to prevent the present enlargement of the rural population that was being witnessed and remedies based on what he calls "faultypolitical economy" were being advocated.

however does not mean that he did not show any regardfortheoreticalconclusions derived by others. Indeed it is significant that his knowledge of economic theory was amazingly up-to-date. Not only was his reading of contemporary economic literature wide and deep, he applied whatever that was in the cutting edge of the discipline to concrete situations, very imaginatively. Just to give an example, in a paper he wrote in 1918, he refers to the contributionsthatappearedin theAmerican Economic Review issued a few months earlier. Another example of his penchant for using received economic theory to critically examine arguments is in an obscure review writtenin 1918 of Bertrand Russell's book Principles of Social Reconstruction. Ambedkar takes him on the questionof the 'Love of money' leading to human beings to "mutilate their own nature from a mistaken theory of what constitutes success" with the consequence of promoting a dead uniformity of "characterand purpose, a diminution in thejoy of life, and a stress and strainwhich leaves whole communities weary, discouragedanddisillusioned".Ambedkar tears into this argument of the 'moralists' against 'love of money' showing that this philosophy is connected to a particular economic circumstances, and not of universal validity. In any case, money is requiredfor something,andit is the purpose for which money is loved "will endow it with credit or cover it with shame" (I, 483ff). He brings the heavy artillery of neo-classical theory of marginal utility developed by as he says "Courot, Gossen, Walras, Menger and Jevons" to counter Russell's position that it is all due to individual preference, and thatpeople will give up things as soon as they have too much of anything. His books and papers are full of appropriatecitations from the great contemporary economists, Irving

Fisher, Alfred Marshall, Richard Ely, AlfredKemmerer, AllynYoung,andJohn MaynardKeynes to name a few. Ambedkarwas not content with the current becausehe had corpusof thought a tremendous historicalsense becausehe was fully aware that present situations wear the scars of the past. In almostall his academic works, he employed the historical method. Whether isthecurrency it or conundrums publicfinance,Ambedkar digs deep in the bowels of history to understand significancethe eventshe the was currently It analysing. was analytical rather thanthe dialectical methodhe used though occasionally one does find a in dialecticalapproach his writings. Thus dealingwith the need for legal solutions to social problems,he said: "Societyis always conservative.It does not change unlessit is compelledto andthattoo very there always is slowly.When change begins, a strugglebetweenthe old and the new, andthe new is alwaysin dangerof being eliminated in the struggle for survival unless supported" p 115).However itis (XII, dialectics a methodof approaching as any work. subjectis absentin Ambedkar's In many areas of Indian economic he and history, wastrulyapioneer hefaced all the problemsthat a pioneerfaces as he pointedout in the prefaceof his The
Evolution ofProvincial Finance. Like Karl

Marxsomedecadesearlier, Ambedkar too over pored voluminous government reports andbluebookstoarrive firmconclusions. at Arisingfromhis conscioususe of history, was his use of statistical data. Notthe withstanding variouslacunaeof the official data,he skillfullymarshalled the available andusedwhatever data statistical that at techniques wereavailable thattime. Thevalueof hisconclusions substantial are preciselybecausehis analysiswas based on sound empiricaland historicalfoundations.

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Economic and Political Weekly

November 20, 1999

Thanks to Ambedkar's study under Cannanand Seligman, he was deeply read in the history of economic thought which came in most useful in all his writing. Apart from that he was widely read in history, jurisprudence, literature and classics. All this shows in the remarkable clarity and style one sees in his books, papers, speeches and so on. One cannot but marvel at the amount of writing he had accomplished and that too in pioneer areas and difficult subjects. And all these before he had crossed his 30 years. The range too is remarkable, from a disquisition on ancient Indian commerce to the current problems faced by the Indian rural population. In all his academic writings - as indeed in his later political life - he was never overawed by If criticism, authority. somethingwarranted he did not hesitate to voice his opinion even if it meant going against the most acclaimed author of the age or his own teacher as in the case of Edwin Cannan. The criticism was always based on sound judgment, and never used in a spirit of bellicosity. Ambedkarfirmly belonged to the JudeoGreek-enlightenmenttraditionand was an uncompromising modernist. This shows in his approach to economics, politics, law, society and everything else including the matter of sartorial habits. He himself was always impeccably dressed in western clothes, and chastised Mahatma Gandhi for going to the Round Table Conference in London to discuss political settlement "as though he was going to a Vaishnava shrine singing Narsi Mehta's Songs" (I, p 351). His preference for a modernist approach comes most clearly when he comparedRanadeand Gandhi: "Inthe age of Ranade the leaders struggled to modernise India. In the age of Gandhi the leaders are making her a living specimen of antiquity. In the age of Ranade leaders depended upon experience as a corrective method of their thought and their deeds. The leaders of the present age depend upon their inner voice as their guide. Not only is there a difference in their mental make up, there is a difference even in their viewpoint regardingexternal appearance. The leaders of the old age took care to be well clad while the leaders of the present age takepridein being half-clad"(I, p 352). But more importantly he believed in materialprogress,constitutional approach to solving problems, rule of law, right to property,civil liberties, democracy based on the liberty, equality and fraternity principles enunciated by the French Revolution. His extensive critique of the

caste system is also basedon enlightenment principles of economic efficiency through private initiative, individual liberties and human equality. It is possible to construe from his later - especially in the 1940s - that he moved away from the strictmainstreameconomic theoretical position. It is no doubt true that he moved towards an economy based on state socialism where he proposed "state ownership in agriculture with a collectivised method of cultivation", state ownership of industry, nationalisation of insurance and so on. It was probably more due to functional reasons than any fundamental change in his enlightenment economic ideology, because he felt that private sector had not achieved growth and his rational mind told him that we should "put an obligation on the state to plan the economic life of the people on lines which would lead to highest point of productivity without closing every avenue to private enterprise, and also provide for the equitable distribution of wealth" (I, p 408). We must recollect that Ambedkar placed much value on democracy and individual liberty which he thought could be preserved by judicious state action. In a sense this conforms to the classic Smithian position. The causal chain thatAdam Smith envisaged was that economic andsocial freedom/equalitywill propel the society towards political equality/freedom. And this is long lasting than the other way round where first you get political freedom and strive to achieve economic and social equality/freedom. In almost all his writings, Ambedkar while fighting for political emancipation, does not forget the need for social andeconomic reforms. Again it was Ambedkar's strong belief in the primacy of rationally directed social and economic development that he advocated centralisation of economic activities. Whether it is his signal achievements in formulating a coherent national water policy (done duringhis membership of Viceroy' s Council 1942-1946) as elaborated in a recent book Ambedkar's Role in Economic Planning and Water Policy by Sukhadeo Thorat, or his helping to give a unitary bias to the Indian Constitution, Ambedkar's anxiety was to promoteeconomic andsocial development of the Indian nation as quickly as possible. Indian Constitution is more unitary than federal which in a sense is a reflection of Ambedkar's long standing bias as he said in 1939 at the Gokhale School of Politics while delivering Kale Memorial Lecture: "I am not opposed to a Federal Form of Government. I confess I have a

partiality for a Unitary form of Government. I think India needs it" (I, p 353). This is not a place to involve myself in a controversyespecially aboutAmbedkar's writingsafter 1925. Butfrequently mention is made about Buddhism and Marx while discussing Ambedkar's ideas. Obviously he was appreciative of the humanitarian and anti-exploitative sentiments that are in Buddhist andMarxianthought,butthere is no evidence of them in his academic works. Even in later years when he did study Buddhism deeply in orderto convert to that religion, his reading of Buddhist economics is at variancewith thatof others especially Schumacher, who in his Small Is Beautiful writes a substantial essay on Buddhist economics. There is more in common with the anti-modernistMahatma Gandhi rather than with the modernist Ambedkar. The four themes from the early writings of Ambedkar that I have sketched here shows in ample measurehis keen economic mind and there is every possibility that he might have achieved substantial success in academic economics had he chosen to continue in the groves of academe. But he must have been touched by what the great enlightenment Scottish philosopher, Adam Ferguson stated in 1767 in his monumental An Essay on the History of Civil Society: "Where power is already where the strong are established, unwilling to suffer restraint, or the weak unable to find a protection, the defects of law are marks of the most perfect corruption". This could have led him to the study of law andjurisprudence so that he could reform the legal system to make it more equitable and civilised. But law and economics are very much intertwined and though he might have exiled himself from the academic pursuit of economics, the practice of that discipline was not totally absent in his legal and political career. We can end our tribute to this great son of India no better than what the unfortunate Pope Gregory VII, the great reforming Head of the Catholic Church of the l th century said: Dilexi justitiam et odi iniquitatem, propterea morior in exilion (I have loved justice and hated iniquity: therefore I die in exile).
[I am grateful to Professor Kuppuswamy, Ambedkar Professorat the MadrasUniversitynot only for invitingme to deliverthis lecturebut also for providingme with necessarybooks and other materials.References in the bracketsrefer to the volume and page of Babasaheb Ambedkar: Writings and Speeches brought out by the Government of Maharashtra.]

Economic and Political Weekly

November 20, 1999

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