From the archives of India Today (1999) | BR Ambedkar as a market-friendly economist?

(NOTE: This article was originally published in the India Today issue of April 26, 1999)

April 14 marked the birth anniversary of one of the most remarkable and inspiring Indians of all time, a man who fought against prejudice and discrimination all his life, but who rose to the heights of intellectual success as few have done elsewhere.

Bhim Rao Ambedkar was more than an icon who gave pride, dignity, self-respect and political power to one-sixth of India. He was the man who chaired the committee that drafted the Constitution that committed the world’s most stratified and hierarchical civilization to the ideals of equality of opportunity. He was the one who shepherded the revolutionary Hindu Code Bill in its initial stages. And it was he who rediscovered for Indians, in an unusually original way, one of India’s greatest gifts to the world: Buddhism.

But what few people know is that Ambedkar was also one of India’s earliest economic researchers. He actually held a double doctorate. His first dates back to 1916 in Colombia and was entitled “The Evolution of Provincial Finances in British India”. In 1918 he wrote a brilliant article in the Journal of the Indian Economic Society, drawing attention to the small size of agricultural holdings in India and the tendency towards fragmentation and emphasizing that industrialization must precede consolidation.

In 1922, he received a second doctorate from the University of London on “The Problem of the Rupee”. This work also has contemporary relevance. Ambedkar argued for devaluation since Indian textiles and other exports were affected by British policy. His testimony before the Hilton-Young Commission in 1926 was a masterful presentation on exchange rate management.

Subsequently, Ambedkar did not write much on economics. He had little sympathy for the Gandhians, whom he saw as anti-industrial. He also had little time for Marxists, characterizing them as young Brahmins not sufficiently committed to promoting the cause of parliamentary democracy, so essential to India’s salvation. He also differed from socialists, who he believed wanted to abandon caste, the basic Indian reality.

Ambedkar’s early writings reveal his strong belief in state socialism, largely because of his fears that private enterprise would accentuate social inequality. At the same time, he emphasized that Lord Buddha praised the moral accumulation of wealth. He believed that collectivization of agriculture along the Soviet lines was the only way to ensure the welfare of Dalits.

As a member of the Viceroy’s Executive Council, Babasaheb made notable contributions to industrial relations and social security. One of his grievances against Pandit Jawaharlal Nehru was that the latter had reneged on his promise to put him in charge of the planning commission, a position he ardently desired.

In recent years, there has been a resurgence of interest in Ambedkar’s economic philosophy. Many Dalit ideologues have slammed the economic reforms, saying they will harm Dalits. But there are others, like Narendra Jadhav, who believe Ambedkar would have supported a social market economy. Nagesh Chaudhury, Divakar Bhoyar and Siddharth Kamble have written that participation in a global economy is part of the heritage of Dalits, unlike upper castes, who prefer a closed economy.

Gail Omvedt, a sociologist-activist and student of Ambedkar for three decades, believes that he would have been pragmatic and sought the most effective combination of the roles of state, market and community. She caused a stir a year ago with her thesis that the pre-1991 economic system was actually an upper-caste construct that did little for Dalits.

The socio-economic impact of the growth of the leather industry in states like Tamil Nadu and Uttar Pradesh shows that globalization can contribute to the empowerment of Dalits. Here is a great example of how swadeshi can marry with globalization. But opportunities are being missed. Over the past decade, India’s share of the global leather and leather products market has declined from 8.5 percent to around 3.5 percent.

The main concern of many Dalit thinkers is the decline in public sector employment, including in the government. This is a legitimate concern; especially since beyond the income aspect, such employment has a great prestige value and has contributed greatly to eliminating social inequalities. This created a Dalit middle class of around two million people.

But the size of government and the public sector must shrink if the country is to grow and create wealth faster. How to achieve this while preserving the social aspirations of Dalits is a daunting challenge. Private industry also needs to pay more attention to affirmative action. Technical and vocational training opportunities for Dalits must be expanded and this must be done by the government.

As the reforms will strengthen the government’s capacity to invest more in infrastructure such as irrigation and education, Dalits will benefit. It is certainly in their interest for the government to reorient the structure of public spending, a fundamental principle of liberalization.

The great paradox is that the so-called social justice parties of the North have not included land reforms, minimum wage, primary education, health, nutrition and gender equality in their agenda. Unlike the south and west, the Dalit struggle in the north is for political power. This is a laudable goal. But social justice must go beyond political power and reservations in government jobs.

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