Ambedkar Day: Celebrating a Legacy of Social Responsibility

Impact Investment strategies place the community, our wider society and the environment at the heart of modern portfolio management, animating strong returns for investors in a socially responsible way. That philosophy is a crucial part of the way Red Ribbon Asset Management manages its funds, and it has its roots deep in Indian culture too.

India celebrates 14th April as a public holiday because in 1891, on this day and in the military cantonment of Mhow, B.R. Ambedkar was born: the fourteenth child of a family struggling in conditions of grinding poverty; and as if that wasn’t bad enough, Bhimrao and the rest of his family were Untouchables, routinely subjected to economic and social discrimination of the cruelest kind. But none of that was enough to stop B.R. Ambedkar, who went on to play a crucial role in fashioning modern India. He was appointed independent India’s first law officer, and he also championed the rights of women as well as (appropriately enough) securing the abolition of the caste system; but most significantly of all, Ambedkar’s highly original economic theories were to provide a fertile basis for the growth of the modern Indian economy.

So it seems especially appropriate that India, from the position of resurgent economic strength, should celebrate his birth date as a public holiday. Ambedkar graduated in 1912 with a degree in Economics and Political Science from the University of Bombay (the first Untouchable to do so) before being awarded the princely sum of £11.50 a month to study at Columbia in the United States  (www.columbia.edu/itc/mealac/pritchett), where he also majored in economics and graduated in 1916; going on to enroll for the Bar at Gray's Inn in London. Later that year and at the same time enrolling as a postgraduate at the London School of Economics to begin work on the doctoral thesis which was to become the seminal economic text: “The Problem of the Rupee: it’s origin and its solution”.

On no basis could he be considered a young man lacking in natural energy, a resource that stood him in good stead when he was asked to draft the Constitution of the newly independent India in 1948. Whilst in office later in life, Ambedkar consistently argued that industrialisation had the potential to revitalise the Indian economy (how prescient that now seems); and in 1951 he established the Finance Commission of India, advocating a free economy as well as a stable rupee.

The ideas that he later presented to the Hilton Young Commission formed the basis for the Reserve Bank of India. No less a figure than the Indian Nobel Laureate Amartya Sen has described Ambedkar as “the father of Indian economics….his contribution to the field of economics is marvellous and will be remembered forever”. Sen is the natural successor to Ambedkar’s legacy: particularly in his writings on Welfare Economics (www.nuff.ox.ac.uk/users/atkinson/sen1998.pdf) where he argued that the value of any economic policy should be assessed by reference to its ultimate impact on the wellbeing of the community as well as on the wider society.Governments, not only on the subcontinent but also all around the world have been influenced by Sen’s work that remains today the classic theoretical foundation of impact investment theory. And Impact Investment theory lies at the very heart of Red Ribbon’s approach to portfolio management as well, combining social responsibility with strong, sustainable market growth for its clients (https://redribbon.co).