The Ceylon Economy

The study has great value even some fifty years after it was written for several reasons. First, it has high technical value given that it presents a sound and robust set of estimates that were very carefully prepared. Second, it was written by a scholar who is well known for his precision, care and commitment to the subject matter. Though trained as a mathematician, he delved extensively into primary sources. This goes beyond the requirement for a Ph.D, which he could have received with much less work by evaluating growth models that had become the rage at the time, including those of Joan Robinson, Nicholas Kaldor and Robin Mathews, all of whom were Cambridge University faculty members. As a gifted mathematician, Dr.Salgado could have improved and extended these models. Instead, he chose to use primary data-‘soil his hands’ so to speak- and produced a valuable study that has stood the test of time and provided valuable information on the Initial conditions of the Ceylon economy for subsequent research.

The period he chose (1920-38) saw very important changes following the adoption of the Donoughmore Constitution (1931), when the Ceylonese were given a large measure of self-government. The period also encompassed the Great Depression (1929-31), which wreaked huge disruption on the world economy, particularly on export-import economies, like Ceylon. Finally, the national income estimates in the study were prepared in a theoretically sound way. They provide a window into the welfare of the population at the time and were based on seminal work on theoretical welfare economics by Paul Samuelson (1950), A.C. Pigou (1952) and I.M.D. Little (1957).