All but forgotten

E.M. Thomas’ book on P.J. Thomas is a valuable contribution in the field of the history of economic thought, a subject that does not get enough attention in India.

Published : Jul 03, 2019 14:30 IST

We all know that ideas of economists often survive them. For example, David Ricardo’s counter-intuitive theory of comparative advantage formulated in 1817 is even now adduced to support the proposition that free trade among states is beneficial to all of them. That Ricardo was comparing England and Portugal, roughly at the same stage of economic development, is forgotten by those who argue that Mongolia might have a comparative advantage over the United States in some areas. U.S. President Donald Trump has questioned the motherhood-and-apple-pie view of globalisation, and the current trade war started by him with China might have more serious consequences than generally conceded.

But how many of us know that sales tax was first introduced in the Indian subcontinent by Dr P.J. Thomas? How many of us know that in 1935, P.J. Thomas argued out the case for spending on generating paid work for the poor?

The idea is now realised in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2005. Did the media or the pundits tell us of P.J. Thomas while discussing the MGNREGA?

Obviously, the words “an unsung economist” in the title are well chosen. The author has carried out research with Teutonic thoroughness. Indeed, the collection of documents from so many sources must have been a task of exceeding difficulty. E.M. Thomas has demonstrated singular dedication in resurrecting P.J. Thomas’ memory. In 2014, the author came out with a book in Malayalam hailing P.J. Thomas as Kerala’s Keynes.

This book has two parts: a brief account of P.J. Thomas’ life and a longer account of his contribution to the discipline of economics and his career in the government.

P.J. Thomas was born in 1893 in a middle-class family in the “obscure and sleepy” village of Kuravilangad in Kottayam district. The reader might wonder at the description of the village and ask herself whether the author has an urban bias. P.J. Thomas had a brilliant academic career in C.M.S. College, Kottayam, and St. Joseph’s College, Tiruchi.

He wanted to write the examination for the ICS but was not permitted as he was not from one of the provinces directly administered by the British. Luckily, he won a scholarship in 1920 to study in Oxford, and his topic for research was “Calico Trade and its Influence on English History” . P.J. Thomas earned his BLitt, and his thesis was published in 1926 under the title Mercantilism and East India Trade .

He completed his doctorate in Oxford, and his thesis was published by the Oxford University Press in 1939 under the title The Growth of Federal Finance in India: Being a Survey of India's Public Finance from 1833 to 1939.

“Liquidity preference” is a well-known concept in economics. In India there is a marked preference to buy gold. In two papers, “The Central Problem of India’s Economy” (1937) and “India’s Economic Malady” ( 1941), P.J. Thomas put forward a holistic idea of rural cooperatives. He was convinced that growth in rural India was dependent on three pillars: the village school, the cooperative society, and village society. In order to discourage the disorderly migration from the rural to the urban, we need to adopt his holistic approach.

The Indian Economic Association, founded in 1917, elected P.J. Thomas as its president in 1937. When P.J. Thomas was Professor of Economics in Madras University, C. Rajagopalachari, the Chief Minister of the Madras Presidency, appointed him Chief Economic Adviser. P.J. Thomas was nominated to the Madras Legislative Assembly for a period of nine years in 1937.

Addiction to alcohol among the poor was a serious problem at that time. When Rajaji decided to introduce prohibition in Salem district, P.J. Thomas came up with the idea of introducing a general sales tax, an idea that spread.

In 1942, P.J. Thomas was appointed as Economic Adviser by the British Government of India, a position that he continued to hold under Prime Minister Jawaharlal Nehru when India became independent. But P.J. Thomas’ ideas were not acted upon, and on superannuation at 55 in 1948, he went back to his home State. In 1957, he was nominated to the Rajya Sabha jointly by the ruling Communist Party and the opposition Congress. He was an active member of the House and spoke out frequently.

The author has listed the 10 books and 20 research papers written by P.J. Thomas, who died in Ernakulam in 1965. In 2016, the P.J. Thomas Foundation instituted a national award, the P.J. Thomas Award for the Economist of the Year, in India . In India, we hardly have books on history of economic thought. E.M. Thomas’ book is a valuable contribution in the field.

It was Thomas Carlyle who said that world history is the sum of the biographies of the great. E.M. Thomas deserves our gratitude for bringing to our attention a rather forgotten but truly eminent economist-cum-civil servant and his contribution to the discipline and its practical application with ideas that remain relevant to our times.

K.P. Fabian is the author of Diplomacy: Indian Style.

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