Ambirajanomics!

Dr. S. Ambirajan was eminent historian in political economy. He was the son of Dr K.R. Srinivasa Iyengar a distinguished professor at Andhra University. “Ambirajan was a true liberal” died on 4 February 2001.

“Particular skills….benefit both the parties to the transaction”- Dr. S. Ambirajan

The following are some excerpts from his article published in the Hindu:

• “The economists' questions are even more important because they address themselves to the implications of policies for the long run interest of the economy and the totality of the socio-economic system. Politicians' policy agenda invariably focus on the very short term results and/or aim at vociferous sectional interests. The pervasive issue for the economist is the relationship of costs to be incurred and the expected benefits of any suggested action. He is interested both in the open and the hidden costs to society, and more particularly as to who will suffer the losses of bad decisions because all policies involve transfer of resources with losers and gainers. He will also factor in some of the most fundamental traits of human behaviour when examining different ways of achieving the same economic ends. The economist knows that choosing one thing in a world where everything is scarce means giving up another. This will naturally involve studying alternative policies to achieve the same objectives. Politicians then, if they are genuine about the welfare of the totality, must pay heed to economists who may often bring unpleasant tidings about their pet projects.
• There is a charming naivete about a demonology where the trader who buys and sells is considered an unwanted ogre. We need to remember that as long ago as 1776, Adam Smith underlined how human prosperity is derived from specialisation which is a consequence of the propensity to ``truck, barter and exchange''. No system of economic organisation has been able to buck this innate nature of human beings. A trader who stands between the producer and the consumer is a specialist in his own job, and brings particular skills to benefit both the parties to the transaction.
• Trading is a spontaneous institution that emerged to reduce transaction costs which are inevitable in any exchange situation that goes beyond the most rudimentary barter mechanism prevalent in very poor unsophisticated economies. If a trading chain develops snags, policy should try to identify the sources of the increases in transaction costs to remedy it. Instead the ``farmers' fair'' actually adds to transaction costs, the only difference being to shift the cost burden from the farmers and the consumers to the general tax payer. This does not make any economic sense.

Other readings

• Economist scholar
• 'Uzhavar Santhais' - fact and fiction
• Economist extraordinaire

S. Ambirajan Memorial lectures:

• C. Rangarajan (Newsreport)
• M. S. Swaminathan (Newsreport)
• P.V. Indiresan (Newsreport)
• Raja J. Chelliah(Full paper)
• Dr U. Sankar (Newsreport-8)

Books:

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