Image credit: Tarushee Mehra

Amiya Kumar Dasgupta is regarded as one of the pioneers of theoretical economics and the founding fathers of modern economics in India.  Born on 16 July 1903, he was the youngest of six siblings. He was barely six years old when his father retired from regular service and returned from Bhanga to Goila in Borisal district — now in Bangladesh — and settled there permanently in their ancestral house.  He received education through the elementary education system then prevalent under British rule in unpartitioned India. Until his matriculation, he resided in Goila, and for his intermediate studies, he enrolled at B.M. College in Borisal; in this period he experienced poverty first-hand, which left a deep imprint on his mind which resurfaced later in his works.

He derived pleasure from logical propositions, a custom initiated and fully established with his association with the University of Dhaka in 1922, when he enrolled as an undergraduate student of Economics Honours. The University of Dhaka was an elite institute of its time and had competent teachers that created a fertile academic ambience, catering to this budding theoretician. He received a First class in both his BA examinations in 1925 and MA in 1926. He was so highly regarded by his teachers that even before the publication of his results he became an economics faculty member, starting his fifty-six year long career, during which he served in many prestigious institutions. 

In the early 1930’s, he had the opportunity to go to the London School of Economics and Political Science (LSE) to work on his thesis The Conception of Surplus in Theoretical Economics as a research fellow under the guidance of Lionel Robbins. His external examiner Paul Rosenstein-Rodan, as adjudicator of the thesis, greatly appreciated the work. Dasgupta completed his thesis in a small span of two years and was the second Indian to obtain a PhD in pure theoretical economics. These two years 1934 – 1936 at the LSE rejuvenated and sharpened the creative genius in him thanks to scholarly debates, deliberations, and collaborations with great economists like J.R Hicks,  Michal Kalecki, Nicholas Kaldor, John Maynard Keynes on one hand, and teachers such as Lionel Robbins, A.L Bowley, and Edwin Cannan on the other hand. 

Upon his return to India, Dasgupta served as a professor of economics at the University of Dhaka until 1946. He later worked with the provincial government in Calcutta and founded the journal Current Thought. He returned to academics as a Senior Lecturer in economics at Shri Ram College of Commerce in Delhi and later at Ravenshaw College, Cuttack. In 1947, he was offered the Professorship of Economics at the University of Benaras, where he served as Professor and Head of the Department of Economics. In 1961, he returned to teaching as the Professor of International Economics at the Indian School of International Studies. He later served as the Director of Anugrah Narayan Sinha Institute of Social Studies in Patna. 

He retired in 1981 and was elected as the honorary Professor of Economics at Jawaharlal Nehru University in New Delhi. He worked in different capacities such as the Chief of the South Asia Division of the International Monetary Fund taking leave from the Banaras Hindu University between 1950 and 1953. He was on the Board of the State Bank of India (SBI) during 1956 – 58. In 1958 – 61, he served as the Deputy Director General, National Council of Applied Economic Research, New Delhi. Between 1962 and 1963, he was on the Board of the Indian Industrial Finance Corporation (IIFC). It was in 1970 – 73 that he was associated with the Central Pay Commission. He was President of the Indian Economic Association in 1960. He was President of the Indian Society of Labour Economics in 1970 – 72. He also served as the Conference President of the Bengal Economic Association (1982). He was a member of the Research Advisory Council of ​‘Khoj-Parishad’, an independent socio-economic research organisation located in Calcutta. He was conferred an Honorary D.Litt by the University of Burdwan in 1989. 

Amongst Dasgupta’s international recognitions, he was elected as an Honorary Fellow of the LSE and was awarded the Commonwealth Visiting Fellowship at the University of Cambridge. In 1963 – 64 famous economists and Dasgupta’s teachers at LSE such as J.R.Hicks, Joan Robinson, James Meade, and Richard Goodwin contributed in a festschrift for him. Dasgupta had the rare opportunity of being invited to contribute papers to both the Das Kapital centenary volume (“Marx’s Reproduction Scheme and Indian Planning”) and Marshall’s Principles of Economics Centenary volume (“An Aspect of Marshall’s Period Analysis”). 

Dasgupta subscribed to the predominant narrative of twentieth-century nationalists who wanted to see a self-reliant economy for India. He made significant contributions to theoretical economics and issues on the contemporary Indian economy. He was a perceptive and analytical thinker, seeking solutions to economic problems. He was open-minded and focused on framing policies around India’s unique characteristics. He was an academic, policy maker, and social philosopher all wrapped together. 

Dasgupta’s deep understanding of the subject of economics made it easy for him to theorise on the major economic events of his time. The uniqueness of his treatment of economic theory lies in the fact that he could present complex real economic trends simply and neatly. Dasgupta’s book, Epochs in Economic Theory, gives us a paradigm, explaining the evolution of theory building in economics. The categorisation of epochs was uniquely done by Dasgupta, and is still considered a dependable benchmark for classifying economic theories, as they evolved according to changing socio-economic conditions.

The clarity and astuteness of his analytical framework is evident throughout his works. While dealing with a problem, say surplus labour and unemployment, Dasgupta not only highlighted and dealt with distinctive economic issues involved, but also distinguished himself by presenting a clear analysis of the problem so that he could attempt to end up with a possible solution to the issue. Dasgupta offered a comprehensive critique of classical, neo-classical and Keynesian economics. Being a historian of economic thought, he provided us with a unique lasting perspective of economic history. Dasgupta’s mastery of political economy allowed him to present the subject in a precise and lucid manner, distinguishing epochs in economic theory over time. He was particularly adept at analysing the dynamic and static aspects of surplus. Influenced by contemporaries like Robinson and Kaldor, he framed temporal behaviour in economics within the classical political economy framework, focusing on the employment of surplus labour in less developed nations like India. Here Dasgupta was seen to provide a synthesis between the Marxian and the Keynesian perspectives in economic theory.

Dasgupta did not merely treat one idea in his career, rather made many fundamental contributions to diverse branches of economic theory. Capital formation and employment generation in less developed countries like India was one of his focuses. His theories unravelled the involvement of multi-layered social intricacies of economic reality in simple terms. He retraced the roots of classical political economy and revisited class conflict to offer a contemporary explanation of social reality. 

He provided alternative solutions to economic theories, often using Marshallian tools to understand trade policy. Dasgupta’s work was influenced by Adam Smith and the classical economists. The solution to the classic economic conundrum of Marshall-Graham-Viner using simple tools of analysis remained one of his most original contributions in economics. His efforts were not only pioneering in this regard, but they were also original and unique.

Dasgupta was critical of the marginalist school (barring few exceptions like Francis Edgeworth), which prioritised the relation between goods rather than the relationship between human beings. Although he was appreciative of the mathematical tools of analysis which were developed to better understand the economic behaviour of human beings, he regretted that such development robbed economics of its essence. 

Dasgupta’s deep understanding of the intricacies of the working of the economy made his advice invaluable. According to him, a growth process that did not percolate down to the most deprived was void of any meaning. The notion of spurious growth as conceived by him decades ago is still an expanding reality in the contemporary world. The rational spirit of the economist in him remained predominant in his thought process, for which sentimentality or abstract polemics at the expense of reason remained absent throughout his works. It was always from an economist’s point of view that he observed any social phenomenon and provided solutions entirely on economic lines. Thus, even when writing on austerity – a topic spanning economics, sociology, and philosophy – Dasgupta remained an economist attempting to offer a comprehensive theory of growth, rather than meandering into the rhetoric of Gandhian idealism. For Indian Planning, he stressed that there is a need for restructuring the planning process, so as to shift its focus from production of luxury goods to investment goods. He was critical of the restrictions and controls imposed in the name of planned development, yet Dasgupta had great faith in the institution of planning as was adopted in post independent India, only to ensure the objectives of growth with redistribution. However, he admitted that the five-year plans in India had grossly neglected employment generation as its prime objective. He had always stressed the fact that unemployment must be the main criterion to guide the entire planning process in India. Dasgupta adopted Keynesian mechanics to understand the workings of the economy. His inclination towards the demand side of investment was challenged by the arguments of supply side bottlenecks suggested by V.K.R.V. Rao.   Dasgupta, however, maintained that Keynesian effects in the form of disguised unemployment were bound to be present in an underdeveloped economy like India. His treatment of surplus labour was distinct from the Lewisian treatment, given his Keyensian perspective on the problem of surplus labour in the Ricardian frame of reference.

During his work with the Pay Commission (1970−1973) in India, he proposed low wages and salaries. His rationale was that generation of enough surplus to tackle the problem of unemployment is necessary in the short run. He also argued in favour of reducing the pay differential between the top salary scales with the wages at the lower levels. He was concerned about the unorganised sector in India where the majority of the Indian labour force were engaged. For this reason he emphasised that wage policy needs to be supplemented by a comprehensive income policy. 

Dasgupta’s work has remnants of twenty-first century ideas on sustainable development and environmental economics. Some of his policies and theories regarding less developed countries have been branded by critics as ​“utopian”. However, he framed policies that emerged out of his broad utilitarian outlook towards the society. 

Skeptics of present-day development strategies look for an alternative by seeking refuge in the theories of Dasgupta. To Dasgupta, unemployment caused low levels of development. This surfaced in his work on unemployment and the applicability of Keynesian economics in India. Even before Arthur Lewis, he anticipated the Lewis model of unlimited labour supply, yet he did not consider Lewisian insights to be original. He thought it as a simple extension of the classical development process viewed by Ricardo. His strong concern for alleviation of poverty put him in the forefront of present-day deliberations about inclusive growth. Dasgupta emphasised the importance of poverty eradication by ensuring the poor had purchasing power by way of employment with realistic wages. He believed in a democratic system based on socialism, respect for human freedom, and provision for the newly employed to generate goods and services that are in demand by the new buyers. Simultaneous usage of utilitarian philosophy and the cultural practice of Indian austere living influenced his approach, understanding, and derivations.

Other contributions: Dasgupta and his friend D.P. Mukherjee from the University of Lucknow helped their classmate and old friend from Dhaka University Sachin Chaudhuri, to initiate the publication of the weekly journal named Economic Weekly. Since its inception, Dasgupta remained closely associated with the journal and took an active role in the re-launching of the journal as Economic and Political Weekly in 1966. 

Dasgupta was a social philosopher. A product of the nineteenth century renaissance, he incorporated political philosophy of nationalism into his economics. He was a suitable successor to the likes of nineteenth century economists like Dadabhai Naroji, R.C. Dutt, and Mahadev Govind Ranade who wanted to understand contemporary economic problems in the context of their sociological dimensions. Dasgupta’s approach was characterised by a free mind, a focus on nation building, and a methodological framework for understanding the dimensions of the Indian economy. His ​‘Indian-ness’ and economic thinking that was advanced for his time made him a precursor to other prominent economists. Dasgupta’s contributions include a distinct methodological framework, perception of economics’ role in society, positive analysis, teaching and improvement, clear analysis of economic problems, dispassionate policy prescription, innovations in analytical tools, creative thinking on cooperation, and interdisciplinarity.

By not restraining himself to the boundaries of an economic theorist, Dasgupta was a ​“visionary” who not only analysed economic problems of his own time and society, but also made certain predictions for the future through his observations about the dynamics, challenges and trajectories that economy and society would take. Dasgupta not only contributed to economics but also led a life that in itself was exemplary. All his beliefs, logic and philosophical bent ended not in theories but guided his life practices. His ability to converge his theories, lived experiences, and praxis has made his theoretical contributions analytically viable and inspirational even in the contemporary age, when the ethics and spirit of economy has changed worldwide — an achievement in itself. 

Featured Image: Tarushee

About the author

Purba Chattopadhyay is Associate Professor at the Department of Home Science, University of Calcutta with a specialisation in econometrics and statistics.