He argued in the book for which he received his DSc degree, "The Problem of the Indian Rupee: Its Origin and Solution" (1923), against the views of the famous economist John Maynard Keynes, on what should be the monetary policy of India. Keynes had argued for a Gold Exchange Standard wherein the Government publishes currency notes promising to give the people Gold in exchange if they should so demand. Actually the Government does not possess the whole amount of the Gold because it knows that people will not demand it and only use the currency for their economic activities. Keynes argued that this would help the Government to spend on public investments and so create demand in the economy. Ambedkar, however, disagreed saying that giving the Government such a power would lead to its printing notes indiscriminately leading to inflation which is harmful for the poor. Therefore, he suggested a mixed currency system of gold coins and notes and in a seminal contribution suggested that even for this mixed system there should be an independent central bank to regulate the money supply and keep a check on the Government's propensity to print money to spend on mostly unproductive expenditure. And this is what led to the creation of the Reserve Bank of India. Today the principle of an independent monetary policy regulator, especially to control inflation, has come to be universally accepted throughout the world and the current Governor of the Reserve Bank of India has over the past few years successfully implemented a tight money policy to control inflation in line with what Ambedkar had prescribed nearly a century ago.
In another seminal article "Buddha and Karl Marx" Ambedkar takes on the venerable Marx with regard to how to bring about economic justice for the oppressed classes. While he agreed with Marx that exploitation by the capitalist class is the cause of the poverty of the masses he disagreed with Marx's prescription of the oppressed masses bringing about an armed revolution and instituting a proletarian dictatorship with total State ownership of resources and the abolition of private property. Ambedkar said that dictatorship invariably results in the stifling of democracy and the concentration of power in the hands of a few and the emergence of a powerful ruling clique. Moreover, he said that the abolition of private property altogether would kill private initiative and lead to the stagnation of the economy under a bureaucratic state controlled system. He, therefore argued for a State controlled and liberal democratic private enterprise system where there should be detailed laws to ensure social and economic equity with the state closely monitoring the capitalists to see that they do not exploit and defraud people. History has borne Ambedkar out in this debate as all the actually existing socialist states failed to progress to communism and instead became dictatorial bureaucrat controlled State Capitalist systems.
Thus, it is to be noted that Ambedkar took on and eventually won in two very important debates against two of the greatest economists the world has seen, a feat that cannot be equalled by any economist of India past or present. The more one reads Ambedkar the more one is left amazed at the giant nature of his intellectual prowess. Especially since he was not just an armchair intellectual but a social crusader who fought for justice for the oppressed.