Interview: Amartya Sen, Master Trinity College, Cambridge University

When you are as earthy as your cherished notion--economic equity--not even winning the Nobel Prize for Economics moves you to grandiloquence. On the seventh day after he became the first Indian--and Asian--to be ranked one of the world's best economists, Amartya Kumar Sen, 65, was his usual unassuming self over the telephone to BT from the Master's Lodge in Trinity College, Cambridge. Straddling as he does the great divide between the market and welfare, Sen commands a rare view of the impact of the science on the lives of people. And as the body of his work--spanning 4 decades, 19 books, and the subjects of economics, ethics, and philosophy--demonstrates, Sen's concerns are those of all of humanity--and not just of business. A record of his post-Prize conversation with BT's Rohit Saran, interspersed with his writings over the years, reveals the mind and the soul of the Nobel laureate.

THE MAN

Amartya Sen

Name: Amartya Kumar Sen
Birth: November 3, 1933
Designation: Master, Trinity College, Cambridge, England; Lamont University Professor Emeritus, Harvard University
Education: B.A., Presidency College, Calcutta, 1953, & Trinity College, Cambridge, 1955; M.A., Trinity College, 1959; Ph.D., Trinity College, 1959
Track-Record: Professor of Economics, Jadavpur U, Calcutta, 1956-58; Fellow of Trinity College, Cambridge, 1957-63; Professor of Economics, Delhi School of Economics, University of Delhi, 1963-71; Professor of Economics, London School of Economics, University of London, 1971-77; Professor of Economics, Oxford U and Fellow of Nuffield College, 1977-80; Drummond Professor of Political Economy, Oxford U and Fellow of All Souls College, Oxford U, 1980-88; Professor of Economics and Philosophy and Lamont University Professor, Harvard U, 1987-97; Master, Trinity College, Cambridge, and Lamont University Professor Emeritus, Harvard U, 1997-
Visiting Appointments: Visiting Assistant Professor, M.I.T., 1960-61; Visiting Associate Professor, Stanford U, Summer term, 1961; Visiting Professor, University of California, Berkeley, 1964-65; Visiting Professor, Harvard U, 1968-69; Andrew D. White Professor at Large, Cornell U, 1978-84
Major Publications: Choice Of Techniques, 1960; Growth Economics (Editor), 1960; Collective Choice & Social Welfare, 1970; Guidelines for Project Evaluation (UNIDO), 1972; On Economic Inequality, 1973; Employment, Technology & Development, 1975; Poverty & Famines: An Essay On Entitlement & Deprivation, 1981; Utilitarianism & Beyond (jointly edited with Bernard Williams), 1982; Choice, Welfare And Measurement, 1982; Resources, Values & Development, 1984; Commodities and Capabilities, 1985; The Standard Of Living, 1987; On Ethics & Economics, 1987; Hunger & Public Action (with Jean Dreze), 1989; The Political Economy Of Hunger (with Jean Dreze), 1990; Inequality Reexamined, 1992; The Quality Of Life (jointly edited with Martha Nussbaum), 1993; India: Economic Development & Social Opportunity (with Jean Dreze), 1995; Indian Development: Selected Regional Perspectives (with Jean Dreze), 1997
Major Awards: Mahalanobis Prize, 1976; Frank E. Seidman Distinguished Award in Political Economy, 1986; Senator Giovanni Agnelli International Prize in Ethics, 1990; Jean Mayer Global Citizenship Award, 1993; Indira Gandhi Gold Medal Award of the Asiatic Society, 1994; Edinburgh Medal, 1997; Nobel Prize in Economics, 1998

Prof. Sen, congratulations on being the first Indian economist to be awarded the Nobel Prize. To a nation delirious after the news of your award, what is the message you would like to convey?

It is difficult to encapsulate things in the form of messages. I am, of course, pleased that in awarding the Nobel Prize, the Royal Swedish Academy has identified welfare economics as an important subject. This is a field of knowledge in which a lot of good work is being done by many people. It involves, among other things, exploring various ways of enhancing equity as well as increasing efficiency in social and economic arrangements. Such work deserves more systematic attention in the politics of public policy.

You have often been described as an economic philosopher rather than an economist. Do you agree with that description?

I don't know what an economic philosopher is. I am, of course, interested in philosophy, besides economics. At Harvard University, I was both Professor of Philosophy and Professor of Economics. But they are distinct subjects, and my lectures on Philosophy did not have much to do with Economics. And my lectures on Economics did not have much to do with Philosophy. It is, of course, important to be conceptually clear in economic analyses--and philosophical scrutiny may be indirectly important for that. However, when it comes to recommending particular economic policies, be it the choice of techniques--which was the subject of my Ph.D. thesis--the prevention of famines, making economic growth more participatory, or measuring poverty with an eye on poverty removal, one has to be a full-fledged economist.

"There must be an attempt to link the strategies of development to something more fundamental, in particular, the ends of economic and social development How are the successes and failures of policies--including the `reforms' of traditional policies--to be judged? It is only with an explicit recognition of the basic ends that debates on means and strategies can be adequately founded While the debates on the current reforms concentrate on a particular class of means related to the use or non-use of markets (such as incentives for private investment, reliance on international trade and so on), there are many other means, especially dealing with the `social' side of economic operations and successes which, typically, tend not to figure in these debates In fact, achievement of even the limited objectives of the current reforms will depend crucially on conscious and organised pursuit of the social means on which economic performance and results are frequently conditional."

You are a strong believer in political democracy. Are there any reasons why Indian democracy has been unable to deliver the kind of economic prosperity attained by some of the politically less free nations in Asia?

Political democracy is important for three distinct reasons. First, it makes our lives more worthwhile in allowing us to act in a more free and effective way. Second, democracy gives political incentive to the government to pay attention to the deprivations from which substantial sections of the community may suffer. Third, apart from the intrinsic importance of democracy and its instrumental role in giving political incentives to the government to be more responsive, democracy also has a role in allowing the formation of values through free discussion and public participation in social and political debates. It is, thus, constitutively important for the formation of values and norms in a society. However, none of these roles suggests that it would, automatically, lead to higher economic growth.

In fact, comparative statistical analyses indicate that economic growth, by itself, is not influenced one way or another by the presence, or the absence, of democracy. Some democratic countries have achieved high growth rates, even in adverse circumstances. Botswana, for example, has been an oasis of democracy in Africa. In promoting economic growth, policy-makers have to pay particular attention to economic and social requirements for successful growth. That can be combined with democracy, which is valuable in itself, and for its role in protecting the vulnerable. Much will depend on how the freedom given by democracy is used in the actual politics of the country, whether undogmatic policy-making receives the adequate backing of the major political parties, and whether issues of economic and social deprivation effectively politicised in voting, debating, and other participatory activities?

"Successive governments in India have had reason enough to rely on the unending patience of the neglected and deprived millions in India, who have not risen in fury against illiteracy, hunger, illness, or economic insecurity. The stubborn persistence of these deprivations has much to do with that lack of fury. What the government ends up doing can be deeply influenced by pressures that are put on the government by the public. But much depends on what issues are politicised and which deprivations become widely discussed and electorally momentous However, the reach of public criticism can be less effective when the deprivations are less extreme, more complex to analyse, and less easy to remedy, as in the case of regular--but non-extreme--undernourishment and economic insecurity, and the lack of medical care for endemic disease."

Governments have often complained that welfare economics does not provide effective and adequate policy tools. Do you agree?

Welfare economics, by itself, is not concerned with providing political tools. It provides a background and understanding which make the assessment of policy tools more systematic. For example, if the objectives of the economy are seen only in terms of promoting the Gross National Product (GNP), irrespective of inequality, or the neglect of equity in the distribution of social opportunities, the policy tools that will tend to receive attention will lack any concern with equity.

On the other hand, if welfare economic concerns are adequately developed and receive the attention they deserve, the policy tools will be assessed in ways that are conducive to promoting equity in social and economic arrangements, not merely to increasing the GNP. Indeed, the GNP itself is an important variable, but has to be assessed in a broader welfare economic perspective. This requires systematic thinking about the objectives of the economy and must be related to the ways and means with which policy tools are concerned

"The position of welfare economics in modern economic theory has been a rather precarious one. In classical political economy, there were no sharp boundaries drawn between welfare economic analysis and other types of economic investigation. But as the suspicion of the use of ethics in economics has grown, welfare economics has appeared to be increasingly dubious. It has been put into an arbitrarily narrow box, separated from the rest of economics. Contact with the outside world has been mainly in the form of a one-way relationship by which findings of predictive economics are allowed to influence welfare economic analysis, but welfare economic ideas are not allowed to influence predictive economics since actual human action is taken to be based on self-interest only--without any impact of ethical considerations or of welfare economic judgements."

What have been the major lacunae in the process of India's economic liberalisation programme?

There's no doubt that the licence-raj regime needed to be changed, and that counterproductive regulations and procedures which stifled industries deserved to be removed. My criticism of public policy is not levelled against economic reform; it relates to doing more positive things through public action. We need to pay enormous attention to elementary education, elementary healthcare, land reform, social arrangements against systematic female deprivations, and other fields crucial to equitable distribution of social opportunity. All this enhances participatory and equitable economic expansion

"The problem with the economic reforms currently under way is not that they are not needed, nor that they are over-exacting, but that they are basically inadequate and unbalanced. The departures are too moderate--and too tolerant of parts of the established tradition of economic planning in India. More, rather than less, radicalism is needed at this time The more conventional criteria of economic success (such as high growth rate, a sound balance of payments, and so forth) are to be valued only as means to deeper ends. It would be a mistake to see the development of education, healthcare, and other basic achievements only or primarily as expansions of `human resources'--the accumulation of `human capital'--as if people were just the means of production and not its ultimate end. The better of human life does not have to be justified by showing that a person with a better life is also a better producer."

You have said that you do not give specific policy advice to governments. Is there any particular reason for your reluctance?

I do make specific policy recommendations. We must not confuse this with my unwillingness to act as an "official" advisor to any government. I have preferred to place my policy recommendations in the public domain through the media, and through technical papers available to the public as well as the government. If you live in a democracy, as I have been fortunate to (in India, in Britain, and in the US), you can make policy recommendations openly, with full public scrutiny, without having to be in an inner circle of policy advisers. I am a great believer in making specific policy recommendations and, in the Indian context, I have outlined my policy recommendations very clearly, including the promotion of particular educational and health arrangements, major programmes of land reform, and other measure of public policy, besides economic reforms.

"It is partly a measure of the complexity of economic growth that the phenomenon of growth should remain, after three decades of intensive intellectual study, such an enigma. It is, however, also a reflection of our sense of values, particularly of the preoccupation with the brain-twisters. Part of the difficulty arises undoubtedly from the fact that the selection of topics for work in growth economics is guided much more by logical curiosity than by a taste for relevance. The character of the subject owes much to this fact."

I hope to be in India in late December, 1998, after the Nobel awards ceremony in Stockholm. In fact, I had planned to go to both India and Bangladesh in the second week of December, but I have had to cancel my visits because of the awards ceremony next month.

The Importance of Being Amartya

When Amartya Sen was asked by his secretary how she should respond to journalists inquiring about Trinity College's reaction to his Nobel, he is reported to have asked her to say: "This is the 31st Nobel Prize for Trinity, and we are not excited." Fair enough. But it is only the sixth for India, and we were, understandably, more excited, with an outpouring of public praise and affection which Amartya Sen richly deserves.

Sen's work deserves to be carefully studied so that the right lessons--and only the right lessons--are drawn. The danger of misreading him is especially acute at present because global financial markets are malfunctioning, some of the best-performing developing economies have collapsed, and market-oriented policies and economic reforms are being questioned.

Sen's prize is for a lifetime's work, but it is his most recent work on the role of social development that has particular relevance for India. Social development includes education, health, gender equality, and, more broadly, social and political empowerment. Sen emphasises that these areas are not only important in themselves as determinants of human welfare; they also affect the pace of growth and the distribution of the benefits of growth. Crucially, it is the State that must play a dominant role in these areas.

Sen has documented our failures in these areas and tirelessly campaigned to make them known to us through his various lectures in India. While we revel in the quality of our higher education--more so for the odd Nobel Prize that comes our way--we need to be reminded that our social development indicators are actually worse than sub-Saharan Africa--traditionally viewed as a chronically-backward region. India's literacy rate is lower than the level reached by Thailand in 1960.

This is, obviously, not a failure of economic reforms, which only began in 1991; it is really a failure of four decades of planning. But it has implications for the success of economic reforms since countries which achieved rapid distributionally-beneficial growth over a prolonged period did so on a much better base of social development than India has at present. We cannot expect to replicate the success of high-growth strategies if some of the preconditions are not in place.

Sen argues that liberalisation and economic reforms by themselves are not enough, but he does not argue that they are not important. Nor does he say that they are not necessary, and that it is sufficient to focus only on social development. Referring to Kerala in India: Economic Development & Social Opportunity, which he co-authored with Jean Dreze, Sen points out that lack of economic reforms--"clinging to old-fashioned bureaucratic regulations"--has meant that Kerala's domestic economy has stagnated over decades, and the people of Kerala have had to look to economic opportunities outside the state.

Sen's message for policy-makers is summed up in his distinction between "market-excluding government intervention" and "market-complementary intervention." He is against market-excluding interventions, such as regulations and controls that stifle economic initiatives and prohibit trade. He is in favour of a market-supporting intervention, such as a comprehensive policy for basic education and healthcare. In short, he is not opposing reforms, but only extending the scope of the reforms debate.

Sen has been criticised for not advocating the need for reforms as forcefully as the need for social development. He could justifiably reply that as long as his position is clear, he need not adopt an advocacy role everywhere. But then, the Nobel Prize has brand equity, and more forceful advocacy from Sen would help remove the cobwebs which still exist in so many minds on the need for reforms in India.

Perhaps Sen should be persuaded to speak more often about those reforms which are directly needed for social development. Substantial increases in expenditure will be needed in social sectors. This requires the reform of the tax system, which should be done in a market-complementary way. There is also a need to curtail wasteful expenditure on, say, non-targeted subsidies and loss-making public enterprises. Advocacy of these policies is an essential part of advocating social development.

The effectiveness of social expenditure is another important issue where relevant lessons must be learnt. Too much of the debate in India focuses on the volume of expenditure in the social sectors and not enough on effectiveness. There is little point in increasing expenditure by hiring more teachers if they do not actually turn up to teach! Sen recognises this problem and notes that the effectiveness of social expenditure involves restructuring the primary health and education systems to make them directly responsible to elected bodies at the village level. Debureaucratisation and empowerment are as important as the volume of expenditure.

Sen's work does not focus directly on globalisation, but he has pronounced on the issue clearly enough. Globalisation can be a change for the good but the economies most able to benefit from it will be those that have made social progress. This does not mean that globalisation is bad for economies like India, which do not have strong social indicators. It only means that they will not be able to benefit as much as they otherwise would have. Old-fashioned protectionists should not look for support in Sen's work.

Properly read, Sen's message is entirely consistent with pursuing the reforms initiated in 1991 with a strong effort at social development. The Nobel Prize will make it easier to spread this message if Sen advocates it as a balanced package. That is the real importance of being Amartya Sen today.

The author, a Member of the Planning Commission, attended Amartya Sen's lectures at the Delhi School of Economics