Chandrasekaran Balakrishnan

B.R.Ambedkar, the Greatest Free Market Economist of India B.R.Ambedkar, the Greatest Free Market Economist of India Chandrasekaran Balakrishnan January 23, 2014 Indian Liberals Before Ambedkar became a lawyer, social reformer and Constitution maker, he was a professional economist. Strangely, he is now known more as a Dalit leader than as an economist in the Dalit community as well as in the society at large. Socialist myth: when people do talk about his economics, but it is about his opposition to capitalism and socialist leanings. This is a myth forwarded by dalits to further their own agenda.In fact, Ambedkar did not oppose free-markets but was himself an advocate of free-markets!! Dalit politics: his economics is ignored by the mainstream and misrepresented by the dalits community because it is contrary to the socialist politics in India. True free-market capitalist: those who know about his economics downplay it but he was free-market economist even before Austrian Economists like F.A.Hayek, etc. Significance of Ambedkar’s economics today: in the heyday of economic reforms in India, we need to rediscover the Ambedkar’s economics, especially his ideas of free-market principles, to empower the dalits and raise them from deep ignorance. In his article “Dalit Capitalism and Pseudo Dalitism” (5 March 2011, pp 10–11), the civil rights activist Anand Teltumbde makes several dubious claims, one of them being Ambedkar’s opposition to capitalism/free market economics “throughout his life”. In reality, Ambedkar was one of the first-generation economists in India and a leading free-market economist in the early decades of 20th century. He was a trained economist with degrees from Columbia University in U.S.A and the London School of Economics before moving on to law and social theory and practices. The reason for this myth is the poor understanding of the intellectuals among the Dalit community and by the mainstream academia and society. The academic environment both in India and abroad has almost forgotten Ambedkar as an economist (leave alone his contribution to free-market economics). According to eminent economist Narendra Jadhav, the lack of awareness continues due to the “intellectual slavery of the Indian society”. Even today, there is a blatant lack of awareness about Ambedkar’s life and works. We continue to underestimate, or worse ignore, the many original contributions that Ambedkar made to many mainstream economics theories in the latter part of the 20th century. Professor S. Ambirajan (1999:3280) said, “I am somewhat distressed to see that he is portrayed as a leader of the ‘dalit’ community and nothing else.” Dalit activists such as Teltumbde seem to downplay Ambedkar’s free-market economics. For example, Teltumbde says: The protagonists of globalisation have tried to project him as a proponent of the free-market, indeed, as a neoliberal, and have even gone to the extent of painting him as a monetarist (monetarists are supposed to be the intellectual initiators of neoliberalism) to claim him in support of their propaganda. In any case, how many dalits, even among the educated ones, know what monetarism is?  Further, Teltumbde paints Ambedkar as a socialist and Marxist: Ambedkar, who publicly professed his opposition to capitalism throughout his life, was thus willfully distorted to be the supporter of neoliberal capitalism, which globalisation is! This denial of Ambedkar’s free-market credentials seems to be rooted in further propagating Ambedkar’s socialist beliefs for populist reasons and political gain, which is a gross mistake and a misrepresentation of his original arguments. Indeed:  [Ambedkar] rejected the totalitarian approach of Marx in advocating control of all the means of production. He did not accept the Marxian position that the abolition of private ownership of property would bring an end to the poverty and suffering of the have nots. He also did not accept the Marxian prognosis that the state is a temporary institution that will wither away in course of time. (Jadhav, 1991: 982). In fact, in his book States and Minorities, Ambedkar entrusted: …an obligation on the state to plan the economic life of the people on line which would lead to highest point of productivity without closing every avenue to private enterprise, and also provide for equitable distribution ofwealth (ibid 982). To illustrate my core contention that Ambedkar was a free-market economist, I would like to draw the reader’s attention to his early career as a professional economist. Ambedkar wrote at least three scholarly contributions to economics and in which he makes many original arguments. (1) Administration and Finance of the East India Company (1915) (2) The Problem of the Rupee: Its Origin and Its Solution (1923, and (3) The Evolution of Provincial Finance in British India: A Study in the Provincial Decentralisation of Imperial Finance (1925). The Problem of the Rupee was Ambedkar’s magnum opus and was based on his LSE thesis. He emphasized the need for a sound monetary system for trade and its nexus with private property rights, writing in the first chapter (1947: 1-2): Trade is an important apparatus in a society, based on private property and pursuit of individual gain; without it, it would be difficult for its members to distribute the specialized products of their labour. Surely a lottery or an administrative device would be incompatible with its nature. Indeed, if it is to preserve its character, the only mode for the necessary distribution of the products of separate industry is that of private trading. But a trading society is unavoidably a pecuniary society, a society which of necessity carries on its transactions in terms of money. In fact, the distribution is not primarily an exchange of products against products, but products against money. In such a society, money therefore necessarily becomes the pivot on which everything revolves. With money as the focusing-point of all human efforts, interests, desires, and ambitions, a trading society is bound to function in a regime of price, where successes and failures are results of nice calculations of price-outlay as against price-product. He further went on to say: Money is not only necessary to facilitate trade by obviating the difficulties of barter, but is also necessary to sustain production by permitting specialization. For, who would care to specialize if he could not trade his products for those of others which he wanted?

Pseudo – Liberals and Neo – Colonisers Pseudo – Liberals and Neo – Colonisers Chandrasekaran Balakrishnan December 23, 2012 Indian Liberals I was recently accused of being a pseudo feminist. Here’s why. While talking on the Sabarimala issue, I said, women who are ready to wait were not anti-feminist, but merely were respecting tradition. A colleague of mine rightly countered me by pointing out how I had made my feelings against triple talaq heard. It really got me thinking. While justifying the need for religious traditions to coexist in a democracy, I might proudly wear the badge of being a liberal. By openly critiquing Mahatma Gandhi and by opposing to Veer Savarkar’s ideology, a section of today’s voters call themselves moderates.But in reality, who are we, if not pseudo liberals or pseudo feminists? In the age of Modi-Trump-Johnson politics (all right-leaning leaders belonging to conservative parties), it definitely feels like the right thing to do, to raise our voice of dissent, of disgruntlement towards the government. The Modi government wants to confer Bharat Ratna on Veer Savarkar? Lets list all the Hindu-oriented ideologies he preached or let’s recall how he justified use of rape as a weapon of war.Article 370 abrogated? Let’s raise voices without considering what people in the state actually want. When a BJP leader urges people to buy swords, while awaiting verdict on the Ayodhya case we cringe; suggest that the land be divided equally and let there be a mosque as well as a temple erected on it. To be honest, I was raised in a household that was proud to be Hindu and did not have high opinions about those belonging to other religions. I was asked not to walk through the ‘Muslim galli’ especially after dark. My husband grew up in Kerala and has some egalitarian ideologies instilled. At least he and his family have no ill feelings or prejudice against people belonging to other religions or other castes. So maybe my thoughts evolved with time and while I am actually a modern feminist who believes in equality and the idea of coexistence, going by my grooming I should be an adarsh nari who is pro BJP? Instead, why can’t I be a moderate. Scores of those belonging to my generation or born between the late 70s and late 80s are surely at a juncture when they are questioning their values. On my last trip to Mumbai, I met with two groups of friends. One, a bunch of women I grew up with, all of them doing quite well career-wise, have a healthy work-family balance, in the thirties. Most of them (to my astonishment) were pro the BJP government. They proudly parroted the economic benefits their beloved Modi sarkaar brought about including lowering corruption (in perceived corruption in the public sector in 2018, India is 78th among 180 countries compared to 85 among 175 countries in the 2014).The other group, the bunch I went to college with, most of them single, living in prime residential areas between Juhu and Bandra, were unhappy with the government, bashed it on numerous issues that affected them locally like potholes that inconvenienced commute and the Aarey issue, drainage problems and more. Personally, I would like to identify myself with the second bunch. Nope, not because they seem the ‘cooler’, ‘more intellectual’ type. Because they seem like a voice of reason and not one derived from emotion. They were talking of everyday issues faced by everyday people, rather than of the parallel changes that make us look good on a macro level— confused? Don’t be. Democracy should not be catering to a single stratum of a society. It should benefit people from all classes. Drainage problems should be resolved so that the homeless who sleep on the street, the stray dogs, the cattle don’t get swept away and thousands of lives aren’t lost. Not just because water causes damage to cars and other vehicles of middle class/ upper middle class families. On the other hand, economic and sustainable housing should be made available to those who cannot afford it so that people aren’t living on the streets in the first place. While, swamps should not be reclaimed nor should trees be cut down illegally to accommodate them, as it could prove to be harmful to the environment and cause the flooding that we want to avoid — makes sense? I hope so!Coming back to my question. Why can’t we belong to a generation who oppose triple talaq, a practice where women have very little or no say, while not agreeing with the Sabarimala verdict because that does not further women’s equality in anyway. Here is to the moderates! Facebook Instagram X-twitter

B.R.Shenoy’s Forgotten Voice of Dissent B.R.Shenoy’s Forgotten Voice of Dissent Chandrasekaran Balakrishnan July 29, 2011 Indian Liberals On a pleasant   March day in 1963, Milton Friedman met US Ambassador J. K. Galbraith for lunch in New Delhi. The invitation from Galbraith read, “As you know, I do not agree with your ideas, but they will do less harm in India than anywhere else…” Even Galbraith — a great proponent of planning — recognised the relation between corruption and interventionism. Unfortunately, a great majority of India’s economists toed the Gosplan line. (Gosplan is short for Russia’s state committee for planning whose Five Year Plans continue to be a model for India.)  B.R. Shenoy is the only Indian economist to write a note of dissent to the second Five Year Plan. Shenoy, India’s first monetary economist, thought that “the only hope of eradication of corruption on the current scale is a complete U-turn in our policies”. An ombudsman will not solve the problen of corruption in the world’s 10th largest economy, only more business freedom will. In February 1975, Shenoy delivered a lecture in Ahmedabad putting forward the thesis that interventionism is the root cause of corruption. Shenoy says corrupt payments arise because “a piece of paper which costs nothing, but the signature of the government official concerned to produce” has value. And it has value because government policy mandates acquiring licences, permits and quotas (LPQ) to run businesses. Data backs Shenoy’s theoretical ideas. There is a strong empirical relation between Heritage Foundation’s measure of ‘business freedom’ and Transparency International’s corruption index. In 2010, seven of the world’s 10 ‘least corrupt’ countries ranked amongst top 10 in ‘business freedom’: New Zealand, Singapore, Denmark, Canada, Sweden, Finland and Iceland. The 10 most corrupt countries have an average business freedom rank of 154, the 10 least have a rank of 12. India’s business freedom rank is 167!The Nordic countries from whom the concept of Ombudsman is borrowed, have an average ‘business freedom’ rank of 8. These countries do not have LPQ levers which bureaucrats could use to extract rents. According to the Swedish Parliamentary Ombudsmen Report for 2007-08, only one case ended in “prosecution and disciplinary proceedings”. The Ombudsman does fine-tune a well functioning system; it cannot fix a broken system like India. Unfortunately, the great Indian corruption debate is a battle between two camps of interventionists: Neither the government nor Team Anna realise that corruption is a consequence of entrusting few ‘wise’ men with too much, more of the same will not solve the problem. Shenoy, with his 1931 Quarterly Journal of Economics article, became the first Indian economist to publish in an academic economics journal. But India chose to ignore his critique of central planning. What followed was a tragic verification of his theoretical vision.   (Vipin P. Veetil is doing his Ph.D. in Economics at Iowa State University. B. Chandrasekaran is in the Planning Commission, New Delhi) Facebook Instagram X-twitter

Gandhi,the Liberal Gandhi,the Liberal Chandrasekaran Balakrishnan July 23, 2011 Indian Liberals  Are Gandhian economic policies incompatible with free market economics? Gandhi advocated limited government intervention, unfettered individual liberty and freedom, higher education in private hands and sex education in schools. In the wake of the global economic crisis, it is pertinent to examine Gandhi’s views on economics and ethics. Writing in Young India (1921), Gandhi argues: “I do not draw a sharp or any distinction between economics and ethics.Economics that hurt the moral wellbeing of an individual or a nation are immoral and, therefore, sinful. Thus the economics that permit one country to prey upon another are immoral…The economics that disregard moral and sentimental considerations are like wax works that, being life-like, still lack the life of the living flesh. At every crucial moment thus new-fangled economic laws have broken down in practice. And nations or individuals who accept them as guiding maxims must perish.”This is akin to what Adam Smith emphasised in his first book, The Theory of Moral Sentiments, in which he coined the phrase‘invisible hand’. Gandhi, as a philosopher of human action, seems to be well aware of the consequences of the moral sentiments.Advocating individual freedom and liberty, Gandhi wrote in the Harijan (1943 & 1942): “If individual liberty goes, then surely all is lost, for if the individual ceases to count, what is left of society? ….No society can possibly be built on a denial of individual freedom. It is contrary to the very nature of man”. Further he went on to argue that “Every individual must have the fullest liberty to use his talents…Individual liberty and inter-dependence are both essential for life in society.” Indeed, there is some convergence between Gandhi and Ambedkar on their views on the individual and society. Ambedkar argued that: “Unlike a drop of water which loses itsidentity when it joins the ocean, man does not lose his being in the society in which he lives. Man’s life is independent. He is born not for the development of the society alone, but for the development of his self…The first is that the individual is an end in him self and that the aim and object of society is the growth of the individual and the development of his personality. Society is not above the individual and if the individual has to subordinate himself to society,it is because such subordination is for his betterment and only to the extent necessary. Man is an individual who holds himself in hand by his intelligenceand his will; he exists not merely in a physical fashion.” Both liberals and opponents of Gandhihave misinterpreted his argument on selfsufficiency. Gandhi wrote that:“Only a Robinson Crusoe can afford to beall self-sufficient…A man cannot becomeself-sufficient even in respect of all thevarious operations from the growing ofcotton to the spinning of the yarn. Hehas at some stage or other to take the aid of the members of his family. And if one may take help from one’s own family, why not from one’s neighbours? Or otherwise what is the significance of the great saying, ‘The world is my family’?” This contradicts the image of absolute self-sufficiency that one finds in Gandhian literature. On the question of State intervention in public affairs, Gandhi was very much concerned about the State’s role in protecting the individual freedom and its role in trying to be friendly with neighbours. He wrote (1948 & 1935): “I look upon an increase of the power of the State with the greatest fear, because although while apparently doing good by minimizing exploitation, it does thegreatest harm to mankind by destroying individuality, which lies at the root of all progress.” He further argued that the “State represents violence in a concentrated and organised form. The individual has a soul, but as the State is a soulless machine, it can never be weaned from violence to which it owes its very existence…What I would personally prefer would be not a centralisation of power in the hands of the State, but an extension of the sense of trusteeship; as in my opinion the violence of private ownership is less injurious than the violence of the State. However, it is unavoidable, I would support a minimum of State-ownership. Today, the government rules out “coercion completely in the efforts for population stabilisation”. For years population was seen as a problem rather than a key resource. Interestingly, Gandhi was completely against population control strategy. He said (1925) that “…it is contended that birth control is necessary for the nation because of overpopulation. I dispute the proposition. It has never been proved. In my opinion, by a proper land system, better agriculture and a supplementary industry, this country is capable of supporting twice asmany people as there are in it today.” Writing in the Harijan (1946) he noted that “The bogey of increasing birth-rate is not a new thing. It has been often trotted out. Increase in population is not and ought not to be regarded as a calamity to be avoided. Its regulation or restriction by artificial methods is a calamity of the first grade, whether we know it or not.” Earlier he had argued that “This little globe of ours is not a toy of yesterday. It has not suffered from the weight of over-population through its age of countless millions. How can it be that the truth has suddenly dawned upon some people that it is in danger of perishing of shortage of food unless the birth-rate is checked through the use ofcontraceptives?”At a time when India is debating higher education policy, Gandhi’s views on the subject are particularly interesting (1937, 1938,1947 & 1948): “I would revolutionise college education and relate it to national necessities. There would be degrees for mechanical and other engineers. They would be attached to the different industries which should pay for the training of the graduates they need. Thus the Tatas would be expected to run a college for training engineers under the supervision of the State,