Cambridge Economics & the Disputation in India’s Economic Policy (2013)

See also

Foundations of India’s Political Economy: Towards an Agenda for the 1990s edited by Subroto Roy & William E James, 1986-1992… pdf copy uploaded 2021

Foundations of Pakistan’s Political Economy: Towards an Agenda for the 1990s, edited by William E James & Subroto Roy, 1986-1993… pdf copy uploaded 2021

2006: https://independentindian.com/2006/05/21/the-politics-of-dr-singh/

2008: https://independentindian.com/2008/04/25/assessing-manmohan-the-doctor-of-deficit-finance-should-realise-the-currency-is-at-stake/

23 August 2013 : 

https://independentindian.com/2013/08/23/did-jagdish-bhagwati-originate-pioneer-intellectually-father-indias-1991-economic-reform-did-manmohan-singh-or-did-i-through-my-encounter-with-rajiv-gandhi-just-as-siddhartha-shan/

19 May 2013

“Manmohan and Sonia have violated Rajiv Gandhi’s intended reforms; the Communists have been appeased or bought; the BJP is incompetent”

is what I said in Sep 2007 in an op-ed in The Statesman. I have to say it again, adding Amartya Sen too for his backing of the so-called “Food Security Bill”…

[Sonia was livid in a speech after I said in 2007 “Manmohan and Sonia have violated Rajiv Gandhi’s intended reforms” … Her stooges wanted me arrested! One said “lined up and shot”… Then she said she only meant to refer to Haryana politics! … https://twitter.com/subyroy/status/1064737873746976768?s=20  ]

But taking Sonia and Rajiv out of it all, we are left with a battle from within Cambridge economics, viz,

Sen and Singh (disciples of Joan Robinson, Kaldor, Dobb et al in the 1950s)

vs

myself … in my PhD thesis of 1981 under Frank Hahn...

PhD

 15 July 2013

I am afraid I cannot remember a cogent coherent book authored by Amartya Sen since his 1972 *On Economic Inequality*, which had nice surveys of the Gini coefficient and related concepts…

My 2006 conversation with him about his book *Identity and Violence* is here.  (see too Is “Cambridge Philosophy” dead, in Cambridge? Can it be resurrected, there? Case Study: Renford Bambrough (& Subroto Roy) preceded by decades Cheryl Misak’s thesis on Wittgenstein being linked with Peirce via Ramsey…”

I now see he and a co-author seem to have produced yet one more piece of extended undergraduate waffle…E.g. “If development is about the expansion of freedom, it has to embrace the removal of poverty as well as paying attention to ecology as integral parts of a unified concern, aimed ultimately at the security and advancement of human freedom. Indeed, important components of human freedoms — and crucial ingredients of our quality of life — are thoroughly dependent on the integrity of the environment, involving the air we breathe, the water we drink, and the epidemiological surroundings in which we live….”

15 July 2013

Where is Amartya’s reply to this?

scan0001

And where is Manmohan’s reply to this?

ppp19842

And where is Manmohan’s reply to this?

602593_10151152229307285_27628359_n

And Manmohan was given a copy of this

indvol

by me at a luncheon at the Indian Embassy Residence in Washington in September 1993 when the Ambassador, the late Barrister SS Ray, told him in the presence of all his senior aides including Montek Ahluwalia and C. Rangarajan, that I had authored the 1991 reform for the then-dead Rajiv Gandhi… on my laptop…

So, to cut to the chase, I have not and do not accept that either Amartya Sen or Manmohan Singh have been leaders of economic thought about India at least (US and British economists can judge for themselves the impact of the former on their own economics). The Sonia Congress has misled itself on the basis of their advocacy and the pity is the BJP, Communists et al in India seem to be even worse…

See also

https://independentindian.com/2013/08/23/did-jagdish-bhagwati-originate-pioneer-intellectually-father-indias-1991-economic-reform-did-manmohan-singh-or-did-i-through-my-encounter-with-rajiv-gandhi-just-as-siddhartha-shan/

The point is not about a PhD but deception about it

Not having a PhD in Economics is hardly a big thing. John Maynard Keynes did not have one. Nor did his disciples Nicholas Kaldor and Joan Robinson. Nor did Kaldor’s fellow-Hungarian critic, Peter Bauer. Yet all of them did path-breaking work in economics in their own time. There are a lot of ridiculous PhD theses being done around the world while a lot of demonstrably good economists have never had a PhD.

Not having a PhD is not the point. Lying about having one most definitely is.

The point is about mendacity and deception about one’s credentials and achievements. I feel nothing personal whatsoever against Suman Bery, have never met him, have exchanged a couple of cordial emails in years gone by, have heard his claim on TV that he considered himself a “liberal economist” and, since I am a liberal economist, found that to be of interest.

But any hint of deception in the public domain by public intellectuals is a bad thing.

India’s capital city, like perhaps many capital cities,  is full of mendacity and self-delusion of all sorts and this is a case that involves the name of a major American university. I find it all highly unpleasant. Suman Bery has no PhD in economics from Princeton University. This implies he has no earned postgraduate degree in economics since his masters degree is in a different field. Under rules of the Union and State Governments of India,  someone with such qualifications may teach economics at secondary school-level but  might well be disallowed from teaching economics courses at college-level let aside be allowed to supervise research or doctoral students. Yet since 2000-2001 he has been “Director General” of the most venerable of public research institutions in applied economics in New Delhi. He has over years allowed the impression to spread that he has an economics PhD from Princeton and deserves to be called Dr Bery. Perhaps he even began to believe this — Hannah Arendt once diagnosed self-deception in her eminent essay “Truth and Politics”. Here are a few examples from the Internet if you look for “Dr Suman Bery”. Judge for yourself.

Example 1:  Press-reports of the appointment in September 2000 “Suman Bery to head NCAER Business Line Financial Daily from THE HINDU group of publications Sunday, September 10, 2000 Our Bureau NEW DELHI, Sept. 9 DR Suman K. Bery, the World Bank Lead Economist for Brazil, will be the new Director-General of the National Council of Applied Economic Research (NCAER), an independent think tank on macro and micro economic policies. A statement from the Council said Dr Bery, who is succeeding Dr Rakesh Mohan, is likely to assume charge as the Director-General in December. Before joining the World Bank, Dr. Bery was Special Consultant to the Governor of the Reserve Bank of India between 1992 and 1994. Dr Bery’s publications include papers on Indian financial sector reform, reform of public sector banks, banking crises in Latin America and the political economy of economic reform in developing countries.”

QUESTION 1: As this was a mistaken report nine years ago about him in the Indian press prior to him taking up his appointment, did he seek to correct it or any similar press-reports e.g. by letters to the editor, or a public press communiqué on the NCAER website? Or, to the contrary, was the press and the appointing authority itself led to believe by him that he was in fact Dr Bery with a PhD from Princeton?

Example 2:  NCAER Golden Jubilee celebrations reported on the NCAER’s own website: “NCAER celebrated Golden Jubilee on Sunday December 17, 2006 at Vigyan Bhawan, New Delhi. The Hon’ble Prime Minister of India, Dr. Manmohan Singh, delivered the keynote address. The Prime Minister also released India Rural Infrastructure Report, a NCAER publication, on the occasion. The highlight of the celebration was an International Conference on Applied Economic Research in Independent India : Lessons for the Future….The Prime Minister released a copy of India’s Rural Infrastructure Report on the occasion. Dr. Bimal Jalan, Dr. Suman Bery, Dr. M.S. Verma, members of Governing body of NCAER and eminent economists participated in the function.” QUESTION 2: The Director-General of the NCAER is its Chief Executive Officer: did he promote the impression within the NCAER over the years that he was Dr Bery?

Example 3 Indian Banking Conference, Indian School of Business, Hyderabad, June 13 2008: “Suman Bery Dr Suman Bery is the current Director General of the National Council of Applied Economic Research, New Delhi, a position he has held since 2001. Earlier he was Lead Economist for Brazil at the World Bank in Washington, D.C., USA. Between 1992 and 1994, Dr Bery served as a Special Consultant to the Governor of the Reserve Bank of India during which he was actively involved in developing proposals for reform of the government debt markets, linkages between general financial sector deregulation and the development of the bond market, as well as issues of market structure, drawing upon the experience of other developing countries. Dr Bery’s publications include papers on Indian Financial Sector reforms; Reforms of Public Sector Banks; Banking Crises in Latin America and the Political Economy of Economic reforms in developing countries. He serves on the Central Board of the State Bank of India, India’s largest bank. He has been a member of several government committees and task forces. Dr Bery graduated from Magdalen College, Oxford and holds degrees from Princeton University – Master of Public and International Affairs and PhD in monetary policy instruments of the Reserve Bank of India.”

QUESTION 3: Why did he promote himself as Dr Bery with a Princeton PhD in this forum?

Example 4: Mumbai conference 17 November 2008 DRAFT PROGRAM Financial Sector Reforms and Economic Integration in Asia Venue: Indira Gandhi Institute of Development Research, Gen. Vaidya Marg, Goregaon East, Mumbai.400065 17th November 2008 9:00 – 9.30 : Registration 9:30 – 10:00 : Welcome and Workshop Objectives Presenters: Prof Nachane (Director, IGIDR) and Prof. Drysdale (Emeritus Professor & Head, EABER) 10:00 – 11.00 : Special Lecture Chair: Prof. R. Radhakrishna (Honorary Professor, CESS and former Director, IGIDR) Dr. K. Kanagasabapathy, (Senior Consultant, Reserve Bank of India, Monetary Policy Department) Inflation and macroeconomic management in India 11.00 – 11.15 : Coffee Break 11.15 – 12.15 : Panel Session 1: Financial sector reforms in India Chair: Prof. Peter Drysdale (Emeritus Professor & Head, EABER) Lead Panelist: Dr. Suman Bery (Director-General, NCAER) Panelists: Prof U Sankar (Madras School of Economics), Dr. Prabhakar Patil (Director, Forward Markets Commission), Prof. Kaliappa Kalirajan (ANU) 12:15 – 13:45 : Lunch break 13:45-15:00 : Panel Session 2: Financial Sector Reforms in South Asia Chair : Dr. R. Barman (Former Executive Director, RBI) Lead Panelist: Dr Khondaker Moazzem (CPD, Bangladesh) Panelists: Dr. Selim Raihan (SANEM, Bangladesh), Dr Dushni Weerakoon (IPS, Sri Lanka), Mr Huw McKay (Australian Treasury) 15.00 – 16:15 : Panel Session 3: Inflation and Macroeconomic Management in South Asia Chair: Dr. Suman Bery Lead Panelist: Mrs. T M J Y P Fernando, Addl. Director, Supervision Department of Central Bank of Sri Lanka. Panelists: Dr Ashima Goyal (IGIDR), Mr Chris Ryan (Reserve Bank of Australia) 16:15 – 16: 30 : Coffee break 16:30 – 17:45 : Panel Session 4:Managing Capital Flows in India and South Asia Dr. R.H. Patil, Chairman, The Clearing Corporation of India Ltd. Lead Panelist: Dr. D. Nachane (Director, IGIDR) Panelists: Dr Ajit Ranade (Chief Economist, Aditya Birla Group) Mr. M.L. Soneji (CEO, Bombay Stock Exchange), Dr. B.K. Bhoi (RBI). 17:45-18:00 : Concluding Remarks Dr. Peter Drysdale and Dr. Dilip Nachane 8.00 p.m. : Dinner at Hotel Hyatt Regency QUESTION 4 Why did he promote himself as Dr Bery at this conference? Examples 5,6 etc: 2009 Yale School of Management South Asian Business Forum, Asian Development Bank 39th Meeting, etc “Suman K. Bery, Director-General, National Council for Applied Economic Research Mr.Bery is the current Director General of the National Council of Applied Economic Research, New Delhi. He assumed this position on January 1, 2001.After schooling in India and the U.K., Mr. Bery graduated from Magdalen College, Oxford with a first class degree in Politics, Philosophy and Economics (PPE). His graduate work was at the Woodrow Wilson School of Public and International Affairs at Princeton University, from which he holds the degree of Master of Public and International Affairs. His Ph.D. dissertation research (also at Princeton) was on the monetary policy instruments of the Reserve Bank of India. Prior to this assignment, he was working at the World Bank in Washington, D.C., USA as the Lead Economist for Brazil. Other experience on Latin America included work on Argentina, Uruguay, Paraguay, Ecuador and Peru. Between 1992 and 1994 Mr. Bery held the position of Special Consultant to the Governor of the Reserve Bank of India, based in Mumbai. While at the RBI, he was actively involved in developing proposals for reform of the government debt markets, linkages between general financial sector deregulation and the development of the bond market, as well as issues of market structure, drawing upon the experience of other developing countries. Mr. Bery’s publications include papers on Indian Financial Sector reforms; Reforms of Public Sector Banks; Banking Crises in Latin America and the Political Economy of Economic reforms in developing countries. Mr. Bery serves on the Central Board of the State Bank of India, India’s largest bank. He has been a member of several government committees and task forces.” QUESTION 5: This description, the same as that on the NCAER website that he and I discussed, gives a clear impression he had done doctoral research at Princeton on the RBI’s policies – why leave it unsaid  that the quest for a doctoral degree was in fact unsuccessful?   And where if anywhere is this research available now? If an economist has been deceptive about his own credentials and achievements as an economist, the statements he makes about the economy or public policy lose credibility commensurately. Now that Mr Bery has become, as of today,  an adviser on economic policy to Dr Manmohan Singh himself, the Prime Minister may end up having to explain this too.

Subroto Roy August 2009

 

India’s Macroeconomics (2007)

(NB This is one of a set of articles that include “India in World Trade & Payments”, “Fiscal Instability”, “Fallacious Finance”, “Indian Money & Credit”, “Indian Money & Banking”, “Against Quackery”, “Indian Inflation”, “Monetary Integrity and the Rupee”, “The Dream Team: A Critique” etc., as well as “Mistaken Macroeconomics” etc. See My Recent Works, Interviews etc on India’s Money, Public Finance, Banking, Trade, BoP, Land, etc (an incomplete list) )

 

 

 

India’s Macroeconomics

Real growth has steadily occurred because India has shared the world’s technological progress. But bad fiscal, monetary policies over decades have led to monetary weakness and capital flight

by

Subroto Roy

First published in The Sunday Statesman Editorial Page Special Article

January 20 2007

Government expenditure in a democracy is supposed to be representative of real public needs. But democracy is everywhere imperfect, and spending tends to follow instead the pattern of special interest groups, i.e., who has how much organised lobbying power in the polity. “Whatever can be rescued from useless expenditure is urgently required for useful”, said JS Mill. How can public spending be made more productive (or less unproductive) by cutting waste, fraud and abuse, and instead better alleviate mass ignorance, poverty and destitution? And how can there be reduced chance of a collapse of confidence in public institutions, especially currency and the banks as has happened in other countries at different times? These are central questions for serious macroeconomic policy-making in India today. In fact, it is likely the Indian people are at present both over-taxed and under-taxed: we are over-taxed by the corroded, corrupt wasteful polity that has actually arisen, while we are under-taxed relative to the fiscal and monetary needs of a robust modern democratic polity yet to exist.

India has shared the technological progress the world economy witnessed in the 20th Century. Private ingenuity, enterprise and business acumen at all scales of operation are manifest in countless examples across the country every day. Real economic growth has taken place steadily as a result, and there is no doubt average levels of health, education, and material well-being have improved almost everywhere ~ often despite government action, sometimes thanks to it. Our legendary population has grown mainly due to lowering of mortality rates via better health, nutrition and awareness, causing longer life-spans than ever before. Our village festivals, market-towns and city-streets are filled with bustling shops with busy people and merchandise, while large concrete buildings are being built everywhere by invisible builders. There is no apparent lack of a potential basis for taxation of private resources for public uses in the country.

At the same time, monumental problems of absolute poverty, ignorance, destitution and inequality remain obvious to the naked eye everywhere in India, affecting hundreds of millions of citizens. A rare candid Government study said: “It does not require clever tools of measurement to demonstrate that there are millions of children in India who are totally deprived of any education worth the name. And it is not as if they are invisible, remote, and therefore unreached. They are everywhere in the cities: on the streets, wiping cars at traffic junctions, picking rags in mounds of waste; in the roadside eateries; in small factories, as cheap labour or domestic help; at ‘home’ completing household chores. In the villages again they are everywhere, responding to the contextual demands of family work as well as bonded labour.” (India Education Report, 2002, p. 47). Such and similar children, their parents and kith and kin constitute the hundreds of anonymous millions of India today.

Less than 30 million people are employed in the “organised” sector, about 18 by government and 12 by the “organised private sector”. Even if four dependents are assumed for each, that hardly makes 15% of the whole population of one billion people today. So while there may be some 150 million people in India who in one way or another engage with the “organised sector”, there may be 850 million who do not ~ reminiscent of Disraeli’s “Two Nations” of Dickensian England.

Also, everyone’s holdings of monetary assets in India have been taxed by inflation, without people realising it except for a continual feeling or memory of the dwindling value of the rupee and other paper assets. Government debt, the quantity of money and general price-level of real goods and services (the inverse of the price of money) have been on exponential growth paths, most conspicuously since the compulsory government take-over of banks in the early 1970s, though origins reach back to the start of pseudo-socialist “planning” in the 1950s (see graph).

When transparent visible taxation cannot be proposed and voted for in the “real” economy because it needs too much political effort or insight, governments resort to invisible, undemocratic means of taxing the public’s monetary resources by the subterfuge of inflating currency and bank deposits. Inflation has everywhere raised real resources for governments too weak to administer proper tax systems or resist the onslaught of organised pressure-groups in incurring public expenditure.

These quite subtle facts remain practically unknown to the Indian public whose lives and those of future generations are deeply affected by them, though in recent decades elite elements like bureaucrats, academics, military officers, businessmen, politicians etc with better information and access to resources have sensed monetary weakness in the country and exported their adult children and savings abroad expeditiously. The sphere of knowledge and concerns of most people are so close to needs of their own survival that they make easy prey for the machinations of others with better information or access to resources. This may help explain why we, who for more than a century and a half have seen a vast political awakening take place and can take pride in having a free press and the world’s largest electorate, at the same time have had our political life and public institutions wracked by enormous corruption, fraud and venality, enfeebling the political economy by widespread cynicism and loss of confidence, and inducing capital flight abroad on the part of a vapid elite.