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The Economist in the Age of Inflation

H. Venkatasubbiah

By C.N. Vakil
Allied Publishers, New Delhi, 1978, pp. xxx 316, Rs. 70.00

By C.N. Vakil
Macmillan, New Delhi, 1978, pp. xviii 338, Rs. 25.00

VOLUME III NUMBER 3 November/December 1978

In 1921 when Professor Vakil headed the Bombay School of Economics and Sociology most of the present gener­ation of Indian economists (even senior ones) were unborn. Like John Matthai he was one of the earliest Indian products of the London School of Economics in its formative years, when its intellectual atmosphere was flavoured by the Fabian left. Oxford and Cambridge barely recog­nized its advent. The late Dr. Radhakrish­nan once recalled how John Matthai, after taking his D.Sc. from the LSE, sought admission for the B. Litt. at Balliol, Oxford. The then Master of Balliol, A.D. Lindsay, agreed to take him on one con­dition—that he will not tell anyone in Oxford that he had a doctorate from the LSE. Yet this attitude was hardly justified. Neither Oxford nor the LSE had contri­buted a distinctive stand to economic thought till much later, and the corpus of classical economic thought came from the Cambridge of Marshall, Pigou and young Keynes, especially Marshall. Marshall's Indian students who held aca­demic posts (Jehangir Coyajee, N.S. Subba Rao and others) were fading out, and if Vakil's economic thought as seen in these books must be identified, it is in terms of the Cambridge school in neo­classical economics. In economic ana­lysis as a guide to public policy he has also wisely steered clear of the extreme right in European economic thought as represented by the twin Teutonic apostles of it, Hayek and von Mises. In one like Vakil whose work was seminal in building economic institutions and guiding the work of several generations of Indian economists, this steady 'centrism' of eco­nomic thought was indeed valuable. It was clear by 1940 that centrism in neo-classical thought itself came from Keynes's General Theory rather than from Hicks's Value and Capital or Robbins's Nature and Significance of Economic Science, reflecting Oxford and London thinking respectively. However, for all its Britishness, Indian economic thought till the fifties was guided, unconsciously, by the American Institutional school (Veblen, Wesley C. Mitchell) in its approach and factual analysis. This approach was cer­tainly more suited to the study of the economic structure of a colonial country of continental proportions. Some of the failures of Indian economists in the past two decades, like Mahalanobis's deter­ministic model-building which Vakil criticizes in the first book, and Vakil's own 'Semibombla' (a scheme meant as a one-time operation ...

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