Politics in economics departments

I wrote a blogpost a while ago covering Montek Ahluwalia’s speech. He pointed to the role Amartya Sen played in forming Planning Commission. Just reproducing them:

Amartya Sen’s article, which is reprinted in this volume but which first appeared in the Seminar issue on Freedom and Planning almost fifty years ago, provides a flavour of the earlier approach. Sen argued then that planning was necessary not only to achieve distributional objectives – which he points out is a traditional and much discussed basis for state intervention – but also to achieve a high rate of growth. He recognized that the industrialized world had achieved industrialization without planning and acknowledged that we could also follow this path, but warned that if we did, it would take us more than a hundred years to industrialize whereas the experience of the socialist economies showed that a much faster transition was possible with socialist planning.

The superiority of socialism in achieving rapid growth was attributed to two reasons. First, since capitalists seek profit maximization, growth in a capitalist economy is only a by-product of this process, and therefore need not occur at the fastest possible rate. Second, even if capitalists want to maximize growth, they would be less efficient at doing so because individual entrepreneurs do not have all the information necessary to achieve the best results whereas a ‘national coordinating planning organization’ would have much more information and therefore achieve better ground outcomes.

 Sen also warned that planning as practised in India, without a really socialist economy, with a private sector responsible for producing consumer goods and a public sector concentrating on producer goods, was unlikely to achieve results. The model suffered from internal contradictions – the ‘middle path’, as he put it, had run out and it was necessary to take a stand on whether we really wanted a socialist economy. The case for planning was essentially a case for more comprehensive socialism, and was in his view a strong case, but we would need to move to a socialist economy

I got a mail from a friend who is pretty well-versed with Indian economy saying he was shocked to read Amartya Sen’s views.

I just found this another tribute to Paul Samuelson from Subramanian Swamy of Janta Party (HT: TT Rammohan Blog). He was an economist earlier and was a student of Paul Samuelson (both Kuznets and Samuelson were his PHd advisors). Though the piece is a tribute I found very interesting points. He says:

Amartya Sen invited me to join the Delhi  School of Economics as a full Professor in early 1968 stating in a hand-written letter that my ‘gaddi was being dusted.’ I therefore spent three months in the summer of 1968 at the Delhi School of Economics as Visiting Professor, before returning to Harvard with the intention of winding up and joining as Professor of Economics at the Delhi School.

But I did not realise then that the Left triumvirate of Sen, K N Raj and S Chakravarty had in the three months discovered that I was not only not ideologically neutral or soft like Jagdish Bhagwati, but hard anti-Left and wanted to dismantle the Soviet planning system in India besides producing the atom bomb.

So when I arrived in India in late 1969 this triumvirate scuttled my ascending the dusted gaddi. Sen was at his hypocritical best in explaining to me his volte face.

Samuelson was enraged when heard this and perhaps felt empathy because of his own experience in the late thirties at Harvard, and urged me to return. When I returned to Harvard to teach in the summer of 1971, Samuelson told me, “Stay here and write a treatise on Index Numbers and you will be worthy of a prize.” But I was in a fighting mood and told him I would return.

Fortunately there was a professorship open at IIT-Delhi. Dr Manmohan Singh was the chairman of the selection committee. Samuelson with Kuznets, the 1971 Nobel Laureate in economics, wrote the committee strong letters of recommendation. Armed with it, Dr Singh did not wilt under the huge pressure mounted by the triumvirate and I was appointed a Professor of Economics in October 1971. But it did not last long.

The triumvirate then persuaded Indira Gandhi  that I was a closet member of the RSS with chauvinist views, and a danger to her. With the KGB favourite Nurul Hasan as education minister, I was easily sacked in December 1972, but re-instated by court in 1991.

I then joined politics since no academic avenues were now open. I continued to return to Harvard for the summer to teach, and got nothing but warmth and welcome from Samuelson each time.

I was just amazed to read all this for its frankness. I was not surprised though as have heard similar stories before as well. The influence of socialism believing economists was really huge post independence. If you were on the other side of the leading ideology you had limited chances for any success.  We often blame govts for its economics. Well, we should also see where the advice is coming from.

Academics is much more politicised than one can ever imagine. This is especially the case in Economics departments where the stakes are so huge.  It is all the more ironical as most economists think everything politics to be evil. They write extensively against politics, role of government etc. And when one sees what goes on in economics departments…it is not a pleasant sight at all.

One Response to “Politics in economics departments”

  1. Politics in economics departments « Mostly Economics » words Says:

    […] Read the original: Politics in economics departments « Mostly Economics […]

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