Today we should rethink the ideas of B.R. Ambedkar as an economist. The entire thinking of Baba saheb Dr Ambedkar was for generating self -esteem in the society, and the biggest hurdle in that was poverty.
He dedicated his entire life to the movement which centred around restoring harmony and alleviating poverty. He was of the firm opinion that political equality must go with social and economic equality. Baba saheb stressed on rapid industrialisation of the country to reduce the burden on agriculture and also to provide employment to the maximum population.
He also stressed on urbanisation because he believed that as urbanisation increases the untouchability will also reduce . Baba saheb abolished the Khoti system which patronised the begari system ( unpaid labour ). He coined the term social economic humanism and he was for the casteless but not stateless society . Known largely as the father of the Indian Constitution and Ambedkar began his career as an economist, making important contributions to the major economic debates of the day.
He was, in fact, among the best educated economists of his generation in India, having earned a doctorate in economics from Columbia University in the US and another from the London School of Economics. Ambedkar’s London doctoral thesis, later published as a book, was on the management of the rupee. Ambedkar’s views on the rupee and on public finance were responses to the raging economic problems of the day and not all of his analysis may be relevant today. But some of the principles he enunciated such as that of price stability and of fiscal responsibility remain relevant even today.
Ambedkar considered the problem of small landholdings in India and their fragmentation. After examining various proposals to consolidate and enlarge such landholdings that were being debated in those days, Ambedkar came to the conclusion that such proposals were fundamentally flawed.
Ambedkar argued that land was only one of the factors of production required to produce crops, and unless it was used in an optimal proportion with other factors of production, it would be inefficient. Landholdings should, therefore, not be fixed but should ideally vary with the availability of other factors of production: increasing with the availability of farm equipment and shrinking if the latter shrank.
Any proposal to enlarge holdings can be entertained only if it can be shown that the availability of farm implements has grown considerably in the country, argued Ambedkar.
Ambedkar argued that the real challenge lay in raising the stock of capital and that will be possible only if there is greater savings in the economy.
This was not possible as long as a great mass of people depended on land for their livelihoods, he reasoned. Therefore, he posited industrialization as the answer to India’s agricultural problem.
What is most remarkable about Ambedkar’s analysis is that he was able to conceive of the notion of “disguised unemployment" much before it came into vogue in development economics, and that he was able to anticipate one of the key insights of Nobel Prize-winning economist Arthur Lewis three decades before Lewis formulated his famous two-sector model of the economy.Lewis presumed that developing economies had surplus and idle labour in the farm sector, and showed how transferring labour from farms to factories would raise savings and productivity levels in both sectors, leading to overall growth.
In later years, Ambedkar’s energies were devoted more to politics and social change rather than economic analysis, but even his writings and speeches on politics reflected a deep engagement with economic issues and questions of political economy. A careful reading of Ambedkar’s writings dispels the view that he was either a champion of a laissez-faire economy or a revolutionary socialist. Ambedkar’s views on economics were as complex as his views on politics and it is likely that one shaped the other. As his views on India’s agrarian problems indicate, he saw no contradiction between advocating for industrialization on the one hand and cooperative farming on the other. And in both cases, he supported his arguments with examples of countries in other parts of the world which had adopted the solutions he was advocating. More than doctrine, empirical evidence seems to have guided many of his policy positions.
Although Ambedkar spoke out in favour of industrialization and urbanization, he also warned of the ills of capitalism, arguing that unfettered capitalism could turn into a force of oppression and exploitation. It was Ambedkar who proposed to the Constituent Assembly that the chapter on fundamental rights in the Constitution should include both negative rights (relating to civil liberties) as well as positive rights (relating to social and economic justice). In a memorandum on this subject, Ambedkar outlined his vision of the rights of citizenship in a free India, and explained why it would entail extensive state control over the economy.
“In an economic system employing armies of workers, producing goods en masse at regular intervals, someone must make rules so that workers will work and the wheels of industry run on," he wrote. “If the state does not do it, the private employer will. Life otherwise will become impossible. In other words, what is called liberty from the control of the state is another name for the dictatorship of the private employer."
Economic and social thoughts of Baba saheb are still relevant and we all need to materialise them collectively.
The economic thought of Dr. Ambedkar cannot be separated from his social and political thinking and therefore , there is a need to understand Babasaheb through his original writings in a holistic manner . Babasaheb was not against capital ,but exploitative nature of the capitalist system . Dr. Ambedkar also focus on the field of public finance and issues related to the land distribution . I personally think that if the workers today work with dignity and get fair wages ,both in private and public and private sectors , it is because of the security granted by Baba saheb in the form of labour laws.
Personality of Baba saheb was multi dimensional but many significant aspects of his life , including his economic thoughts ,have not come into light in a proper manner.