Economic Thoughts of Dr. Ambedkar

Dr. CA. Varadraj BapatIndian Institute of Technology,

Mumbaivaradraj@som.iitb.ac.in

9892413119

Dr. Varadraj BapatCA., CWA., M.Com., DISA, PhD.

School of Management

Indian Institute of Technology, Mumbai

अखिल भारतीय विदयारथी पररषद परदश अधयकषभारतीय अरथथवयिसरथा, भारतीय ससकती, शशकषण, ससकत,

योग, बरहमविदया या विषयाची आिड

Education of Dr. Bhimrao Ambedkar

• Columbia University

• M.A., 1915, Ancient

Indian Commerce.

• MA, 1916, National

Dividend of India-A

Historic and Analytical

Study

Education of Dr. Bhimrao Ambedkar

• PhD, 1917, "The Evolution of Provincial Finance in British India",

(is considered a seminal contribution to the field of public finance. It analysed the evolution of the centre-state financial relations in British India)

• Columbia University

• M.A., 1915, Ancient Indian Commerce.

• MA, 1916, National Dividend of India-A Historic and Analytical Study

• PhD, 1917, "The Evolution of Provincial Finance in British India",

(is considered a seminal contribution to the field of public finance. It analysed the evolution of the centre-state financial relations in British India)

Education

• London School of Economics

• DSc, 1927, "The Problem of the Rupee: Its Origin and Its Solution", (is a magnum opus and seen as a major contribution to the field of monetary economics)

• http://www.ambedkar.org/ambcd/28H.%20Problem%20of%20Rupee%20CHAPTER%20VIl.htm

Books

• He wrote three scholarly books on economics:

• Administration and Finance of the East India Company

• http://www.ambedkar.org/ambcd/26.%20Administration%20and%20Finance%20of%20East%20India%20Company.htm

• The Evolution of Provincial Finance in British India

• The Problem of the Rupee: Its Origin and Its Solution

• The Reserve Bank of India (RBI), was based on the ideas that Ambedkar presented to the Hilton Young Commission

• Various memoranda and statements that he submitted to the government (under British rule as well as in independent India) are indicative of his deep insights into India's economic problems.

• His speeches are replete with stimulating economic thoughts. He is probably the first thinker to analyse economic dimensions of social maladies in India, such as the caste system and untouchability.

• SMALL HOLDINGS IN INDIA AND THEIR REMEDIES• http://www.ambedkar.org/ambcd/11.%20Small%20Holding

s%20in%20India%20and%20their%20Remedies.htm#c05 • the production of food is enough to make its problems

demand our most serious thought. But when a country, like India, depends almost wholly upon farming its importance cannot be exaggerated. The problems of agricultural economy dealing directly with agricultural production are what to produce, the proper proportion of the factors of production, the size of holdings, the tenures of land etc. In this paper it is attempted to deal only with the problem of the size of holdings as it affects the productivity of agriculture

• He also spelt out his views on the ideal strategy for India's economic development in his Memorandum, "States and Minorities" (1947).

• http://www.ambedkar.org/ambcd/10A.%20Statesand%20Minorities%20Preface.htm

• Ambedkar presented a perceptive critique of Marxism in his essay, "Buddha or Karl Marx“.

• http://www.ambedkar.org/ambcd/20.Buddha%20or%20Karl%20Marx.htm

• The Marxists may easily laugh at it and may ridicule the very idea of treating Marx and Buddha on the same level. Marx so modern and Buddha so ancient! The Marxists may say that the Buddha as compared to their master must bejust primitive. What comparison can there be between two such persons? What could a Marxist learn from the Buddha? What can Buddha teach a Marxist?

• "Buddha or Karl Marx“.• http://www.ambedkar.org/ambcd/20.Buddha%20or%20Karl%20Ma

rx.htm

• None-the-less a comparison between the two is a attractive and instructive Having read both and being interested in the ideology of both a comparison between them just forces itself on me. If the Marxists keep back their prejudices and study the Buddha and understand what he stood for I feel sure that they will change their attitude. It is of course too much to expect that having been determined to scoff at the Buddha they will remain to pray. But this much can he said that they will realise that there is something in the Buddha's teachings which is worth their while to take note of.

• COMMERCIAL RELATIONS OF INDIA IN THE MIDDLE AGES OR

• THE RISE OF ISLAM AND THE EXPANSION OF WESTERN EUROPE

• http://www.ambedkar.org/ambcd/47.Commercial%20Relations%20of%20India%20in%20the%20Middle%20Ages.htm

• The birth of Islam is synchronous with the consolidation of Papal power in Rome under Gregory the Great. It was the era of theocracies and the east was once more spreading a wave of religion that had almost succeeded in Mohomedanizing the entire continent of Europe. Not to speak of Africa and Asia and like many big things ;

• COMMERCIAL RELATIONS OF INDIA IN THE MIDDLE AGES

• But this system was early disturbed by the rise of Islam. When we imagine that trade was carried on by land Caravans with all the cumbersomeness we can imagine the hindrances it must have underwent owing to the rapid military movements of the Saracens We will recall that there were four principal trade routes from Asia to Europe and they all lay through the dominions of the Saracens." During the Crusades, so long as the avenue by the Persian Gulf and the Red Sea were controlled by hostile Mohomedan powers, it became necessary to adopt another more expensive and circuitous route, requiring much land-carriage and several transfers of freight.

• COMMERCIAL RELATIONS OF INDIA IN THE MIDDLE AGES

• " Islam had hemmed Christendom on every side. On the East as on the South, the Crescentraised a barrier against the advance of the Cross." [f39] But in this mighty struggle of theCrescent and the Cross commerce suffered immensely. " The Ottoman seizure or obstruction of the Indian trade routes brought disaster not alone to the Mediterranean republics. The blow fell first on Genoa and Venice, but it sent a shock through the whole system of European commerce.

• COMMERCIAL RELATIONS OF INDIA IN THE MIDDLE AGES

• The chief channel by which the products of Asia reached the central and northern nations of Christendom was the Hanseatic League."[f40] The Hanseatic had profited mainly owing to its control of Oriental wares coming through Italian Republics.

• “. From very early times "Germany and the north Italian upland were dependent on the Republic (Venice) for the products of the east, and when 1017 of ([f41] ) ships laden with spices suffered shipwreck, the event is noticed by a (*[f42] ) chronicler as a serious misfortune." [f43]" The Indian trade formed an important contributory to this Hanseatic commerce. When the eastern traffic began to dry up, its European emporiums declined." 3[f44] In this blockade of old trade routes lies the (*[f45] ) expansion of western Europe.

• COMMERCIAL RELATIONS OF INDIA IN THE MIDDLE AGES

• The whole situation is well summed up by Prof. A. F. Poland when (*[f46] ) as to why America was discovered towards the end of the fifteenth century, he says, (*[f47] ) would be the paradoxical assertion that Columbus discovered America in 1492 or there abouts because the Turks are an obstructive people. The connection is not quite obvious, but obvious connections are always superficial, and this is more profound.

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• What is world economic history ?

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Share of World GDP from 0 to 1998

Year 0 100

0

150

0

160

0

170

0

182

0

187

0

191

3

195

0

197

3

199

8

W.

Eur

10.8 8.7 17.9 19.9 22.5 23.6 33.6 33.5 26.3 25.7 20.6

USA 0 0 0.3 0.2 0.1 1.8 8.9 19.1 27.3 22.0 21.9

Chin

a

26.2 22.7 25.0 29.2 22.3 32.9 17.2 8.9 4.5 4.6 11.5

Indi

a

32.9 28.9 24.5 22.6 24.4 16.0 12.2 7.6 4.2 3.1 5.0

Worl

d

100 100 100 100 100 100 100 100 100 100 100

Source: Table-B-20 Appendix B; pp263; The World Economy: A millennial Perspective—Angus Maddison OECD Development Centre Studies --2007

GDP during 2,000 yearsSource: Angus Maddison. 2001. The World Economy: A Millennial Perspective. OECD, Paris

Share of Global GDP (%): Year 0-1998

0

5

10

15

20

25

30

35

40

0

1000

1500

1600

1700

1820

1870

1913

1950

1973

1998

Western Europe

United States

Japan

China

India

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• India is not a story from Rags to Riches.

• It’s an economic empire re-establishing itself

• Western economies have to loot others to sustain

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• Dr. Ambedkar considered both Capitalism भााडवलशाही and Communism मारकसवाद as incomplete models

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Capitalism भााडवलशाही

• १७७०

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Capitalism भााडवलशाही

• १७७०

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Capitalism भााडवलशाही

• १७७०

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• Communism मारकसवाद• शोषण मकती • समानता

Marxism• Marx and Engels

studied the history of the world’s economies

Basic Communism

Feudalism

Capitalism

Communism!!!!

Socialism

•They believed they discovered an inevitable pattern

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• Communism

USSR

• USSR stands for:

Union of Soviet

Socialist Republics.

• The USSR was

formed in December

1922.

• USSR a.k.a. Russia.

• The USSR is a

Communist party.

Communist control of the USSR by 1924

• Moscow

• Leningrad

Communist control of the World

• Moscow

माकसथ िाद शोषण मकती / समानता •धमथ / परपरा नषट करा •मानिी मलय पायदळी

माकसथ िाद •हकमशाही•हतया •िन•गररबी

माकसथ िाद १० कोटी हतया

माकसथ िाद

•हकमशाही•हतया •िन•गररबी

माकसथ िाद

•हकमशाही•हतया •िन•गररबी

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• Capitalism भााडवलशाही • Vs. Communism मारकसवाद•

• Post 1990• Communism lost completly

• Capitalism got converted into Consumerism

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• Capitalism भााडवलशाही • Consumerism अनिरबध उपभोग

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• Capitalism भााडवलशाही • Consumerism अनिरबध उपभोग

• Bush urged the U.S. public to go shopping and take vacations (2001 -9/11)

• (http://consortiumnews.com/2011/09/11/chronicling-americas-911-descent/)

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• Capitalism भााडवलशाही • Consumerism अनिरबध उपभोग

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ववषमता

42

ववषमता

43

• Capitalism भााडवलशाही • Consumerism अनिरबध उपभोग • Market Economy

• Market Society

• Market Family

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• Capitalism भााडवलशाही • Consumerism अनिरबध उपभोग • Market Economy

• Market Society

• Market Family

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Family Destroyed - Marriage

In US, More than 50 % of children born to under 30 women are out of wedlock

- Marriage is Luxury Good

http://parenting.blogs.nytimes.com/2012/02/19/for-younger-mothers-out-of-wedlock-births-are-the-new-normal/

http://www.nytimes.com/2012/02/18/us/for-women-under-30-most-births-occur-outside-marriage.html?pagewanted=all

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Family Destroyed - Marriage

In US, More than 50 % of children born to under 30 women are out of wedlock

- Marriage is Luxury Good

http://parenting.blogs.nytimes.com/2012/02/19/for-younger-mothers-out-of-wedlock-births-are-the-new-normal/

http://www.nytimes.com/2012/02/18/us/for-women-under-30-most-births-occur-outside-marriage.html?pagewanted=all

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Family Destroyed - Marriage

In US, More than 50 % of children born to under 30 women are out of wedlock

- Marriage is Luxury Good

http://parenting.blogs.nytimes.com/2012/02/19/for-younger-mothers-out-of-wedlock-births-are-the-new-normal/

http://www.nytimes.com/2012/02/18/us/for-women-under-30-most-births-occur-outside-marriage.html?pagewanted=all

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Family Destroyed - Marriage

A million children growing up without fathers in UK

In UK there are more households with TV’s than fathers

http://www.bbc.co.uk/news/education-22820829 (9 June 2013)

Avg persons per house in us

• Pic

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High rate of crime

परचड गनहगारी.भरषटाचार िन मारामारी बलातकार

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High rate of crime

The dataset includes figures for 126 countries. India a rate of Murders reported per 100,000 population

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High rate of crime

The dataset includes figures for 126 countries. No of prisoners

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High rate of crime

The dataset includes figures for 126 countries. India is 79th on that list with a rate of 1.8 rapes reported per 100,000 population

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षटीच शोषण नसरगथक सपतती चा विधिस परचड परदषण

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Impact ?

• Saving Rates ?

US on a binge

10/17/2016 Dr. Varadraj Bapat, IIT Mumbai 6464

US personal savings

U.S. personal savings rate has been on its way down. In other words, consumers have been spending more than they have been earning. Some economists warn that this is troubling and unsustainable.

http://www.businessinsider.in/CHART-OF-THE-DAY-Why-The-Personal-Savings-Rate-Is-Tumbling/articleshow/21189234.cms 9 Apr 2013

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Indian Economic Model

In india, we should stop cpying failed Western models (Both Communism and Capitalism).

we need a model based on Indian ethos

Economics that hurt the moral well-being of an individual or a nation are immoral and therefore sinful.MM-263That economics is untrue which ignores or disregards moral values.XXV-475

Our object in framing the Constitution is rally two-fold: (1) To lay down the form of political democracy, and (2) To lay down that our ideal is economic democracy and also to prescribe that every Government whatever is in power shall strive to bring about economic democracy. The directive principles have a great value, for they lay down that our ideal is economic democracy.

Deendayal Upadhyay “I visualize for India a decentralized polity and self-reliant economy with the village as the base. We cannot rely upon superficial Western concepts like individualism, socialism, communism, capitalism and need to be rooted in the timeless traditions of our ancient culture. He was of the view that the Indian intellect was getting suffocated by Western theories and ideologies and consequently there was a big roadblock on the growth and expansion of original Bharatiya thought.

• Maharishi Aurobindo said:

“India shall arise upon the ruins ofthe west” He said by the year2011 the western countries willfall and India will rise.

India has to get into act

•The Question is are we

getting ready to create a

new world order?

Bharat has to get into act

References

1 Indian Models of Economy, Business and Management Models- K Kanagasabapathi

2 India Unincoporated- L Vaidyanathan

3 Indian Business and Financial Models course by S Gurumurthy conducted at IITB.

Further readings

1 Too big to fail- Andrew Ross Sorkin

2 The Inside Job- A Documentary on how the global economic crisis happened.

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