This colloquium looks at the history of India’s experience with central planning through the eyes of one of its chief critics: B.R. Shenoy. Though many have criticized India’s economic policy since the success of the 1991 reforms, Shenoy holds claim to being one of the very few (along with P.T. Bauer and Milton Friedman) who saw the folly of central economic planning at the time. Shenoy was not only a lone advocate for a “market-regulated” economy during India’s decades of central economic planning; his economic understanding is still in need. Yet he remains tragically underappreciated.
Shenoy is also important for another reason. There has been general recognition of liberalization’s role in improving the material standard of living for millions in India. However, many feel that such policies were unnecessary, alien to Indian thinking, and imposed from outside by the IMF. Shenoy’s work shows that there was a consistent advocate of individual freedom who understood India’s situation from within from the start and that market liberal ideas are part of the heritage of Indian culture.
Justice to the man requires that he be better recognized for his thought and work. But more than that, it is necessary to make sure his ideas are more widely understood so India can avoid repeating her mistakes and forge a more successful path going forward.
Shenoy’s genius was primarily as an applied economist. His brilliance is clear from his ability to contextualize complex economic problems and make sense of them using the fundamental tools of the economist. Though primarily an applied economist, Shenoy showed a sophisticated understanding of theory from the theory of savings, monetary theory and monetary institutions, as well as international trade and the balance of payments. In addition, he had amazing comprehension of “the facts” in terms of statistical data. These factors combined made him a formidable analyst of the economic sickness of his day and of the remedies required.
Shenoy had a powerful conception of the economy as an integrated system and saw each economic problem as interconnected with the rest. Today we recognize the value of his “systems thinking” approach, which was often lacking in the linear models that dominated economics.
Shenoy was also immensely pragmatic, practical, and principled. As one reads, one is struck with the lack of ideological extremity in his thinking and presentations. It is shocking that his clear and lucid thinking and analysis were met with such vitriolic rejection and that he was maligned and ignored. It goes to show how ideologically fashionable socialism was at the time and how little honest thinking went into creating a healthy skepticism of Socialism’s utopian promises.
Most of Shenoy’s writings are an application of “the fundamentals” to problems of his day and the application of practical medicine as a cure for the problems he saw. He tirelessly sought to educate others of the causes of India’s economic woes. Though seemingly basic, however, it is essential to appreciate the power and importance of his approach. P.T. Bauer stressed later that it was the need of the time to restate the obvious again and again, quoting Orwell: “we have sunk to such a depth that the restatement of the obvious has become the first duty of intelligent men.” Even today, many fail to understand the fundamentals that enabled Shenoy’s clarity of vision; there is still much need to restate the obvious.
The colloquium will explore questions such as:
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