You are on page 1of 4

“Dimensions of Ambedkarism.

Prof M.K.Dongre

Economic Thought and isms

1. Capitalism

Capitalism is the basic economic system of the modern age. “It involves the
method of enterprise and a rational capitalistic establishment; and the spirit of
capitalism illustrates that attitude which seeks profit rationally and
systematically”, observes Max Weber.
As defined by Hobson, it is the organisation of business upon a large scale by an
employer or company of employers possessing an accumulated stock wherewith
to acquire raw materials and tools, and hire labour so as to produce an
increased quantity of wealth which shall constitute profit.
From various definitions of capitalism Dr. S.K. Srivastava concludes that,
“Capitalism or capitalist civilization is that stage in the development of Industry
and legal institutions in which the majority of workers find themselves divorced
from the ownership of the means of production in such way as they become
mere wage earners whose subsistence, security and personal freedom depend
upon capitalists who can be counted on fingers, control the entire organisation of
land, labour and machinery; and undertake business and production purely from
the point of view of private gain”.1
Hence, the salient features of the capitalism are:
(i) Private property,
(ii) Ownership of means of production,
(iii) Economic freedom,
(iv) Vital role of entrepreneur, and
(v) Competition accompanied by oligopoly.
Mr. V.B. Singh lays stress on the motive of profit making and points out the
following characteristics of capitalism:
(i) Profit constitutes the motivating force for the advancement of economic
(ii) The profit realised is not controlled by the State or the public bodies, but by
individual entrepreneurs; and
(iii) Profit is generally invested in the production of wealth, so as to get further
profits.2 Mainly because of this motive of profit making the capitalists, in the
words of Karl Marx, started misappropriating the ‘Surplus Value’ produced by the
labour. It resulted in inequalities of income; division of society into classes like
rich and poor, employers and employees and haves and have-nots; social unrest
; unemployment ; class-conflict leading to class struggle and class-war ; cut-
throat competition; unplanned production; loss of moral values and trade cycle.
Hence, there emerged a socialistic thought which aimed at replacing capitalism
by limiting or abolishing private property; establishing collective ownership on the
means of production by way of nationalisation and by establishing a class-less
society based on equality and justice. Marxism, which embodies Socialism and
Communism, criticized and described in detail the evils of capitalism and stood
against it every tooth and nail.
Dr. Ambedkar’s Approach
Dr. Ambedkar was a staunch democrat and a committed socialist. He therefore
agrees that the ‘have-nots’ are always exploited by the ‘haves’ and joins hands
with Karl Marx in overthrowing the supremacy of the ‘haves’. But, he does not
accept economic relationship as the be-all and end-all of human life and thus
rejects economic motive as the driving power behind all human activity. Hence,
the mis-appropriation of the Surplus Value by the owners of private property
cannot be the only reason of exploitation. Dr. Ambedkar does not therefore
believe in the abolition of private property as the only remedy to bring an end to
the exploitation, poverty and sufferings of the have-nots. On the contrary, he
defends an individual’s right to private possession of wealth and property and
stands for a greater security of the individual’s economic interests, with the help
of state control.
He believes in individual liberty and wants the capitalists to co-operate with the
state for the betterment of economic and social affairs.
He is opposed to the annihilation of capitalists as it would be, in his opinion, an
act of violence. He believes in non-violent method of socio-economic change
without depriving anybody of his personal liberty may he be capitalist or an
owner of private property. But he maintains that the primary function of a growing
society is an effective check on economic exploitation and therefore seeks “to
eliminate the possibility of the more powerful having the power to impose
arbitrary restraints on the less powerful withdrawing from the control he has over
the economic life of the people.3
Obviously, he is against the concentration of wealth in a few hands and seeks to
put “an obligation on the state to plan the economic life of the people on the line
which would lead to highest point of productivity without closing every avenue to
private enterprise, and also provide for equitable distribution of wealth.” 4
State Intervention
Dr. Ambedkar, though disagreed with Karl Marx and defended an individual’s
right to liberty and private property never favoured capitalism as the best form of
economic system. Being a democrat he wants individual liberty through
democracy and being a socialist he wants social emancipation through
F. M. Stern wrote a book titled as ‘Classless Capitalism’ and tried to impress that
American Capitalism is not only classless but also democratic and thus superior
to the kind of capitalism known to the rest of the world. He further observed that
the “American Capitalism is dominated by two seemingly unconnected
movements; one is shrinking demand for human labour per unit of production
and the other is rapid expansion of the market for the products of modern
industry. These two movements must-and in the final outcome do-balance each
other.” Siding totally with the capitalistic process he believed in market
mechanism but did not favour State intervention.5
Dr. Ambedkar maintained that the State can prove itself an ideal agency to
protect, both democracy and socialism by resorting to timely intervention and
adequate controls.
He says, “It is true that where the State refrains from intervention what remains
is liberty.....but this liberty is liberty to landlords to increase rents, for capitalists
to increase hours of work and reduce rate of wages. This must be so. It cannot
be otherwise. For, in an economic system employing armies of workers,
producing goods en masse at regular intervals some one must make rules so
that workers will work and the wheels of industry run on. If the State does not do
it, the private employer will. Life otherwise become impossible. In other words
what is called liberty from the control of the state is another name for the
dictatorship of the private employer.”6 He favours state intervention against
capitalism but not to the extent of communism.
Dr. Ambedkar, as a practical democrat with an ardent faith in a democratic way
of life, has opposed monopoly and dictatorship in its shape and form.
He is against complete nationalisation and state control of the economy.
He advocates State Socialism and state ownership in the fields of agriculutre,
industry and insurance with a view to see that the dictatorship and capitalism do
not stand in the way of democracy and socialism and their rapid success in
Land holding in India, according to Dr. Ambedkar, is not only a matter of property
but also a matter of social states.
The traditional village economy, based on agriculture, is the root cause of socio-
economic inequality and injustice. He therefore advocates nationalisation of
agricultural land with collective farming where agriculture becomes a State
Dr. Ambedkar is not opposed to the private sector of the economy. He suggests
that some spheres of production, except in the basic industries, should be
operated through the state or through private enterprise or under both the state
and private control. He realizes that the private enterprise cannot bring about
rapid industrialization of Indian economy because of its motive of maximum profit
and absolute backwardness of the traditional village economy of the country;
and even if it attempts to industrialise the economy, it would produce inequalities
of wealth, exploitation of workers and such other evils of capitalism.7 Hence, he
is in favour of nationalisation of basic and key industries only. So also he
advocates nationalisation of insurance with a view to give (i) greater security to
the individuals and (ii) adequate funds to the State for financing economic plans.
Thus, Dr. Ambedkar seeks to establish a balance between State ownership and
private enterprise. He is neither in the camp of pure or Scientific Socialists or of
the communists who advocate total nationalisation and complete state
monopoly, nor favours capitalism which stands for free and un-controlled private
Dr. Ambedkar wants “to retain Parliamentary Democracy and to prescribe the
state socialism by the law of the constitution, so that it will be beyond the reach
of Parliamentary majority to suspend, amend or abrogate it”.8
Lord J.M. Keynes propounds a theory of state capitalism as opposed to state
socialism and wants the state to function within the general requirements of the
capitalist system.
Thus, as regard to state intervention in economic life of the people Dr. Ambedkar
comes close to Lord J. M. Keynes, but with a different attitude. Keynes
propounded, revised or reformed Capitalism whereas Dr. Ambedkar advocated
a new kind of State Socialism. Both are the reformers of capitalist system; but
when Keynes fundamentally remains a capitalist, Ambedkar turns to be an
individualist and socialist in his socio-economic philosophy. This attitude towards
human interest brings Dr. Ambedkar very near to J.S. Mill who outlines a
comprehensive programme of social policy observes, Dr. D. R. Jatava.9
To Dr. Ambedkar, Capitalism and Brahminism, an integral part of Hinduism, are
the twin enemies of Indian society as Brahminism is also based on exploitation
and inequality. In his attack on Hinduism Ambedkar comes closer to Karl Marx
who regards religion as the opium of the people and wants to overthrow the
supremacy of religion and capitalism.
Capitalism Versus Democracy
Capitalism is said to have been changing and capitalism today is not the
classical capitalism of earlier times. But the profit-motive remains and its evil
effects cannot be ignored. Even in case of India the British Government did not
stop the squeezing of the masses by the landlords and exploitation of the
labourers by the capitalists, might be because of the fear of resistance and their
own ideology of capitalistic economy. Hence, to believe that capitalism will be
replaced by social outlook and socially oriented planning or to effect reforms in
capitalism will not bring any fruits.
F. M. Stern believes that American Capitalism is ‘Classless Capitalism’ without
which dignity and prosperity for all cannot be realized. He also talks of
‘Democratic Capitalism’ based upon change and growth, strives to expand
production, to create new ideas, new wealth and greater property for all; but,
also admits that economic and social equality for all can probably never be
Dr. Ambedkar said, “Those who are living under the capitalistic form of industrial
organization and under the form of political organization called Parliamentary
Democracy must recognize the contradictions of their systems.....In politics
equality and in economics inequality.”

It is thus obvious that capitalism cannot sustain the democratic principle of

equality; and democratic society cannot justify exploitation and inequality. How
can there be fraternity and justice without equality? So also there is no trace of
morality and ethics in the ideology of capitalism. Dr. Ambedkar therefore could
never support capitalism in its shape and form.

Send e-mail to with questions or comments about this web site.
No Copyright © 2000 dalit e-forum Last modified: August 21, 2000