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The Man From Cambridge:
Ajit Singh,
Economist

JOHN EATWELL

 

 

 




AJIT SINGH
September 11, 1940 - June 23, 2015

 

The economist Ajit Singh, who has died aged 74, was a pioneer in the analysis of takeovers and the structure of the modern business enterprise. He also devised the first operational definition of de-industrialisation in advanced economies and was a leading voice in the debate over the dynamics of industrialisation and financial markets in the developing world.

Ajit Singh’s work on corporate behaviour resulted in two major publications, Growth Profitability and Valuation (1968, co-authored with Geoffrey Whittington) and Takeovers: Their Relevance to the Stock Market and the Theory of the Firm (1972).

In these two books he tested the work of the Cambridge economist Robin Marris, who, developing research on corporate structure in the 1930s by Adolf Berle and Gardiner Means, had argued that the role of disciplining corporate managers and of aligning their decision-making with the welfare of shareholders would be played by the stock market alone: in other words, that the market will ensure efficiency by selecting the fittest companies for survival.

Ajit Singh demonstrated conclusively that these rosy conclusions were false. By careful empirical study of takeovers, he revealed that it is not possible to distinguish between the characteristics of acquired and non-acquired firms, other than that there is a tendency for smaller firms to be taken over. Equally, both the short- and long-run impacts of takeovers on share prices suggest that, on average, takeovers lead to substantial loss of wealth for shareholders of the acquiring company.

Later, Ajit Singh’s interest in industrial structure and performance took a more macro-economic focus in the debate, stimulated initially by another Cambridge economist, Nicholas Kaldor, over the de-industrialisation of Britain. De-industrialisation had been defined as simply a declining share of manufacturing in GDP. But this is a characteristic of most advanced economies today.

The concept was first given analytical precision in Ajit Singh’s path-breaking article of 1997, UK Industry and the World Economy: A Case of De-industrialisation?

In this he defined an efficient manufacturing sector as “one which (currently as well as potentially) … sells enough of its products abroad to pay for the nation’s import requirements … at socially acceptable levels of output, employment and the exchange rate”.

That insight is particularly pertinent today, when the UK’s deficit on manufactured trade is 5% of GDP (having been 1.5% 20 years ago), contributing to a balance of payments deficit of around 6% of GDP, and hence current levels of output and employment are sustained only by the persistent accumulation of foreign debt.

Ajit Singh’s analysis of the interaction between financial development, industrialisation and international competitiveness informed his subsequent research spanning a wide range of topics including the role of the state, industrial policy, structural change, competition policy, foreign aid, agriculture, basic needs, urbanisation, employment and income distribution.

One of his consistent themes was the central role of manufacturing industry in economic development and poverty reduction. He regarded the obsession of modern-day economists with abstract modelling as self-indulgent, was an inheritor of John Maynard Keynes’s commitment to making economics useful, and always insisted on the value of thoroughly researched material that uses meticulous empirical technique to address practical problems.

Ajit Singh was born in Lahore, in pre-partition Punjab, the son of Sardar Singh, a judge, and Pushpa Kaur, whose family claimed lineage from the Third Master, Guru Amar Das. He studied Mathematics and Economics at Punjab University in Chandigarh, then went to Howard University in Washington, DC, where he obtained an MA in economics, and the University of California, Berkeley, where he earned his PhD. It was at Berkeley that he met Marris, who was visiting from Cambridge, and began to investigate some of the empirical implications of Marris’s classic book, The Economic Theory of Managerial Capitalism (1964).

He moved to Cambridge University to continue that work, and in 1964 became a research officer in the department of applied economics. In 1965 he was appointed to a university lectureship, in 1991 to a Readership, and in 1995 to a Professorship. He was devoted to his college, Queens’, where he became a Fellow.

He inspired generations of students at Cambridge, where his research was often controversial but always thorough. He applied similar care to his politics, and in the late 1960s his rooms in Queens’ were packed with material on the Vietnam war. Few who were present will forget his polite but devastating interrogation of the then foreign secretary, Michael Stewart, at a 1966 Cambridge Union meeting on the war.

However, the most abiding memories of him will be of the twinkling eyes below his turban, of a penetrating intellect, and of an unwavering commitment to social and economic progress. Despite suffering from Parkinson’s disease for more than three decades, he continued to contribute original academic and policy work right up to the time of his death.

His first marriage, to Jo Bradley, ended in divorce in 2012.

He is survived by his second wife, Ann Zammit, and by his sisters Parveen and Rani.


[Courtesy: The Guardian. Edited for sikhchic.com]
July 16, 2015
 

Conversation about this article

1: Sangat Singh (Kuala Lumpur, Malaysia), July 16, 2015, 6:28 PM.

Never heard about him before. Thanks to sikhchic.com for presenting this nugget who had to die before we could know about him. “Kaho naanak sab tayree vadi-aa-ee ko-ee naa-o na jaanai mayraa” [GGS:383.12] - “Says Nanak, this is all your Greatness, no one even knows my name.” This Prof Emeritus of Economics at Cambridge was one of the most renowned Sikh economists. Surprisingly unknown in Malaysia too where he occupied Tun Ismail Ali Chair at University of Malaya!

2: T. Sher Singh (Mount Forest, Ontario, Canada), July 16, 2015, 9:00 PM.

I recall the first time I came across Dr Ajit Singh. It was in the early 1980s, I think. I had turned on the TV late one night and was flipping channels when I came across this Sardar being interviewed in the US. He was on his way back to England from South America where he had been consulted by several governments to avert an economic crisis. Within minutes, I was bowled over by his ideas and by his perfect articulation of them. Ever since, I became a fan of his for life.

3: Purnima (Kuala Lumpur, Malaysia), July 17, 2015, 1:11 AM.

Very interesting personality.

4: Sarbjir Singh Chhina (Amritsar, Punjab), July 18, 2015, 6:01 AM.

He was a great economist, much concerned for the common man in under-developed countries, including India. Such people are the pride of humanity.

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Ajit Singh,
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