ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

An Eclectic Economist's Canon

The Collected Works of A K Dasgupta compiled and edited by Alaknanda Patel

march 14, 2009 vol xliv no 11 EPW Economic & Political Weekly28book reviewAn Eclectic Economist’s CanonAnand ChandavarkarThe Collected Works of A K Dasguptacompiled and edited by Alaknanda Patel (New Delhi: Oxford University Press), 2009; Volume I(Two Treatises on Classical Political Economy); pp XLVIII, 377, Rs 995; Volume II (Essays in Economic Theory); pp XVIII, 455, Rs 995; Volume III (Essays in Planning and Public Policy); pp XX, 589, Rs 995. The title of this review reflects the distinguished economist, Amiya Dasgupta’s (1903-92) personal tes-tament and intellectual stance: “I am neither a Keynesian nor a Marxist. I am an eclectic...But the economist, if he is to be of use to society must not divorce himself from what is happening outside his own field” in history, politics, psychology and sociology (Vol III, pp 549-51). A many-sided economist, Dasgupta was an accomplished theorist who also excelled as a teacher, researcher, policy wonk, and international civil servant, butalways remained the public intellec-tual of surpassing integrity. These three volumes, well introduced by Dilip Nachane, Partha Dasgupta and I G Patel, respec-tively, are a fitting commemoration of his varied métier. The moving biographical sketch by his daughter, Alaknanda Patel, reads like the archetypal saga of the economist as a great all-rounder in an age of specialists, an Asian counterpart of Nicholas Kaldor.Dasgupta was an itinerant academic who taught all over the subcontinent (Dacca, Delhi, Cuttack, and Benares) and overseas at Cambridge and Sussex, so redolent of the peregrinations of medieval European scholars who gravitated around Bologna, Padua, the Sorbonne, Oxford, Cracow and Prague. That Dasgupta could successfully break the insular ramparts of Indian universities thickly coated with layer upon layer of parochialism, “casteism” and cronyism is a remarkable tribute to his talents and reputation, un-equalled in Indian academic annals.The Dasgupta odyssey began in the sylvan campus of the Dacca University, a unitary residential university which even replicated the basics of the Oxbridge tutorial system and was rated as a centre of excellence with outstanding academics like Satyen Bose, the physicist whose Bose-Einstein statistics are a major build-ing block of particle physics, and later the mathematician, Vijayaraghavan. But Das-gupta was singularly fortunate in his teachers in the economics department, headed by S G Panandikar, a starpupil of EdwinCannan, with the rare accolade of a double doctorate (PhD and DSc Econ) from the London School of Economics. His colleague J C Sinha, who taught applied economics, was the author of a standard work on the history of Indian currency based on his PhD dissertation at the Calcutta Uni-versity, approved by John Maynard Keynes, no less. Most remarkably, Panandikar’s joint stress on economic theory and history of economic thought made a lasting impres-sion on Dasgupta, the historical economist extraordinaire to be “Dacca University made Dasgupta the teacher, the economist” (VolI, XXIII).Dasgupta topped the list in his MA ex-amination (1926) and Sachin Chaudhuri a worthy second place in the first class. He recalls: “In class one day I saw him [Sachin] approaching, thin and tall in his flowing dhoti, thick glasses and piercing intense eyes – the look of a genius”. This started four years of studying economics together and a lifetime David and Jonathan friendship that eventuated in his helping Sachin Chaudhuri to start the Economic Weekly (1949). Dasgupta was a regular contributor to the EW and his striking analytic articles contributed in no small measure to establish the pre-eminence of the EW as an economic periodical. The Dasgupta-Sachin synergy was a vital sus-taining influence for theEW as emerges in his delightful reminiscences of Sachin Chaudhuri reproduced in VolumeIII: “Sachin was not just an editor but also a teacher...He was an economist of consid-erable distinction” (ibid: 533).Theorist of Classical Political EconomyDasgupta’s reputation in this genre rests squarely on his two treatises, viz,The Con-ception of Surplus in Theoretical Economics (1942) based on his PhD dissertation at the London School of Economics (1934-36) under the supervision of Lionel Robbins, and approved by P N Rosenstein-Rodan; and the Epochs of Economic Theory (1985).The Surplus offers a completely inde-pendent perspective on neoclassical eco-nomics by way of a critique of what is a portmanteau concept that cries out for unbundling. It discards the traditional Marshallian distinction between “consumer’s surplus” and producer’s surplus as being a “mere terminological convention”. Instead he focuses on the division of the “social or distributional surplus”, emerging in the process of distribution of national income and a “consumer’s surplus” defined broadly as “surplus gain in terms of utility arising out of exchange”. While Dasgupta’s Ricardian critique is post-Marshallian, it bears the heavy imprint of Robbins’ earlier work (1932). He criticises the Marshallian justification of Ricardian rent theory on the basic insight that “variation in the total supply of factors is to be observed in relation to their potential uses for non-pecuniary purposes”. He tended to empha-sise much more the availability of alter-native pecuniary uses for a given factor and its elasticity of supply in the short and long runs in contrast to Frank Knight who focused on the distinction between factors of production based on their degree of substitutability.Dasgupta then analyses the essentially microeconomic concept of consumer’s surplus which is related to individual consumer utilities, unlike the distribu-tional surplus which is related to the allo-cation of the national product between various factors of production. He offers a detailed critique of Marshall’s concept which is flawed by at least two major limi-tations. The first arises from the assumption of a constant marginal utility of money
BOOK REVIEWEconomic & Political Weekly EPW march 14, 2009 vol xliv no 1129over the process of exchange. The second is the assumption of the theoretical possi-bility of aggregating the consumer surplus accruing from different goods to a single consumer. This, according to Dasgupta, is an absurdity once the relative characters of utility and consumer’s surplus are rec-ognised. He also evaluates the notion of consumer’s surplus in international trade where the issue of aggregation is compli-cated by the collateral issue of the alloca-tion of surplus between home and foreign country consumers.An allied contribution is Dasgupta’s dichotomy of fictional and dynamic surplus, which arises from a divergence between the expected and realised economic con-dition, thereby relating profits to uncer-tainty. There is a further distinction between frictional surplus arising out of temporary disequilibrium and a pure dynamic surplus. However, Dasgupta did not explore the role of the investable surplus (undistributed profits + marketed surplus of agriculture) as a determinant of economic growth and development. Nor did he analyse the basic contradiction in the Marxian system – which regards profit both as the source of accumulation, and as the surplus value which rightly belongs to the worker as for his own consumption and which would, in fact, belong to him in a socialist state, which is brilliantly exposed by Daya Krishna in his seminal article on “Surplus Value, Profit, and Exploitation” (The Review of Economic Studies, Vol 22, No 2, 1954-55, pp 96-108).In Surplus Dasgupta attempted a syn-thesis of major economic theories around the grand unifying theme of the economic surplus. Likewise, inEpochs he relied on a single unifying theme of approaching the development of economic thought through successive epochs more comprehensive than earlier attempts of John Law (1750), Pierre Proudhon (1846) and Bruno Hilde-brand (1848). His epochs are divided in terms of “the character of questions asked rather on the views expressed” in three major epochs, viz, the classical marginal-ist and the Keynesian. His relativist ap-proach to economics contrasts with the absolute approach of Schumpeter’sHistory of Economic Analysis.Dasgupta’s affinities with classical and neoclassical economics have been well recognised in the literature but his essential affinity with the pioneer 19th century economists like Dadabhai Naoroji, R C Dutt and Mahadeo Govind Ranade has been overlooked, with whom he shared the relativist approach and the socio-political dimensions of economic issues. His Epochs supplied the methodological rationale of a relativist discipline of Indian economics. Surprisingly, for an assiduous historical economist, Dasgupta ignored the seminal contributions of K T Telang (Theory of Protection), B R Ambedkar (Laws of Returns in Agriculture) and the transmis-sionmechanism of the quantity theory of money in Indian conditions as developed by G K Gokhale and so well appreciated by even Keynes. He was ideally fitted to write a companion volume to Epochs on Indian Economic Thought which would have sur-veyed the contributions of these and others, notably B P Adarkar (monetary theory and federal finance) and J K Mehta (value theory) which were recognised by Keynes and Joan Robinson, respectively. Regret-tably, he never got round to this grand project, which would have made a classic trilogy withSurplus andEpochs. Nonethe-less, Dasgupta stands out as a lone ranger in the history of ideas so well described by one of its foremost exponents “as a lonely discipline” (Isaiah Berlin).Teaching and ResearchIn this sensitive area too, Dasgupta dis-played his unerring instinct for the jugular. According to him, the real problem was not in choosing a syllabus or the period of study, but in choosing personnel. We do not have an adequate number of well-equipped teachers to staff so many universities...The position is made more hopeless by the fact that universities...have often a knack of choosing the wrong kindof men as teachers on account of wrong judg-ment, parochialism and favouritism.There is too a correlation between the rate of growth of doctorates and the decline in the standard of students. It is counter-produc-tive to maintain indiscriminate postgradu-ate centres of research,aresponsibilityof the University Grants Commission. They could be limited to about half a dozen cen-tres and let the other centres limit their teaching responsibilities to theBA standard. The choice of postgraduate centres should be based upon the strength of existing tradi-tion and the incentives it has for competent economists (Vol III: 483-88). Much the same spirit actuated his eval-uation of economic research in India. He conceded that a little bias, insofar as it is explicit, is even necessary and desirable as “a little passion brings meaning to our economic thinking” (ibid: 490). A senti-ment that recalls Keynes’ memorable aph-orism “Words ought to be a little wild, for they are the assaults of thought on the un-thinking”. Dasgupta, while saying three cheers to the econometricians, urged that “our tool box should contain both a blade and an axe” (ibid: 490-91), and “we need the shelter of Mathematics, if only to protect economics, from intruders, while accepting the validity of interdisciplinary research. But research has to be left to specialists” (ibid: 490-92).Pity Dasgupta omitted to exhort research economists to pay as much at-tention to the sources and methods of primary statistics as they do to tools. Errors and omissions can play havoc with findings. The humble social anthro-pologist patiently collects his own data after meticulous fieldwork but the typical econometrician prefers to work with readymade secondary statistics from official yearbooks in eager pursuit of regression values. Likewise, it is prudent to bear in mind that economic variables are not only a matter of kind but also of degree which opens up vistas of fuzzy sets, fractals, and fuzzy logic. Take for instance, the concept of central bank independence which lends itself admirably to this type of analysis. Sur-prisingly, Dasgupta is silent on the deplorable state of peer review among Indian economic periodicals, which is either non-existent or nominal, and too often blatantly incestuous. Dasgupta did not expatiate on the rela-tive emphasis of research and teaching of economics but his life and work was an embodiment of the sage observation of one of the leading exemplars of their synergy. [“I would not recommend to anyone (in the field of social sciences at any rate) that they should concentrate on ‘research’ as against ‘teaching’. It is more fruitful – and in the longer run more creative – to com-bine both” (N Kaldor, Banca Nazionale del Lavoro Quarterly Review, March 1982, p 23)]. Much the same sentiment underlies the attempts of Lord Noel Annan, the former

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Back to Top