Cover Story: The Conscience of Economics

The celebrated champion of the underpriveleged successfully pushes his cause into world recognition in an era in which the market, rather than welfare, had dominated global priorities.

In 1933, when Rabindranath Tagore, the first Asian Nobel laureate, was asked to name the baby born to the daughter of his secretary, he chose Amartya, the "other-worldly". "It's an outstanding name. I can see the boy will grow into an outstanding person," the poet told the parents.

Last week, the Swedish Royal Academy of Sciences selected Amartya Sen for the 1998 Bank of Sweden Prize in Economic Sciences in memory of Alfred Nobel, worth $978,000 (Rs 4.1 crore) this year. The sixth Indian to be awarded the Nobel Prize was honoured for a life-time's work to invest the dismal science with concerns that are far from the mundane. Social choice, poverty index, studies of famine -- Sen's interests are abstruse in comparison with the market-oriented research of the past few laureates. These are undoubtedly lively areas of research, but light years away from Sen's world of measuring poverty and inequality by the most rigorous scales and probing the reasons of the individual's economic failure.

BIOGRAPHY

1933: Born at Shantiniketan
1953: Graduated from Presidency College, Calcutta
1956-58: Professor of economics, Jadavpur University
1957-63: Fellow, Trinity College
1963-71: Professor, DSE
1971-77: Professor, London School of Economics
1977-80: Nuffield College, Oxford
1980-87: Drummond Professor of political economy, Oxford
1987-98: Lamont Professor of economics and philosophy, Harvard
1998: Master, Trinity College

However, public pressure for the prize to be given to Sen had been building up for some years. This year an Internet poll among economists on who should be the winner had put Sen at the top with 76 votes (influential MIT -- Massachusetts Institute of Technology -- economist Paul Krugman got only 10 votes). But the Nobel committee of about a dozen top economists, whose identities are kept under wraps, seldom buckles under such peer pressure. In 1996, The Times of London ran a spirited campaign for Sen, spearheaded by Kenneth Arrow, whose pioneering contribution to welfare theory won him the 1972 economics prize. "I have learnt much from him (Sen)," Arrow wrote in the article. MIT Nobel laureate Robert Solow described Sen as "the conscience of economics". Yet, the Nobel committee was unmoved.

But the award to Sen could be delayed, not denied. The body of his work since his first major publication -- Collective Choice and Social Welfare, 1970 -- had made him a cult figure among students, academics and, notably, public policy planners, many of whom swear by him without reading him. Having been the Lamont Professor of both economics and philosophy at Harvard University for over a decade, Sen secured his place in the high table of "liberal" America, amid such Boston Brahmins as John K. Galbraith, Paul Samuelson and Solow. They shone in splendid isolation against the "market bias" of Chicago University economists, like Milton Friedman (1976 Nobel laureate), who not only worshipped the "invisible hand" of the market but could mould the public policies of the West. Though the high church of liberalism to which Sen belongs has not influenced government thinking decisively in America or Europe -- not until the rediscovery of the Third Way by Tony Blair -- it has enjoyed an intellectual presence that the Swedish Royal Academy could not disregard. In 1996, Sen became the first non-American president of the American Economic Association. His reputation was no less on the other side of the Atlantic. In the late 1950s, he was a dominant member of the neo-Marxist charmed circle of the late Joan Robinson at Cambridge, where he was a Fellow of Trinity College. Throughout the 1970s and most of the 1980s, he was in the best faculties, including the London School of Economics and Oxford.

Finally, in January this year, he returned to his alma mater as Master of Trinity College, a coveted post never before held by a non-white or even a non-Briton. It made Sen a truly international celebrity, and too overwhelming perhaps for the Academy to persist with its ideological bias. Specially when the "ideology" itself was coming under relentless attack for its visible failure in many countries where the West had hugely invested, notably in South-East Asia.

To make the faces in the Academy a shade redder, Robert Merton and Myron Scholes, who were awarded the prize last year for their work in determining the value of "derivatives", or contracts whose values are derived from their underlying assets like stocks or commodities, got involved in the collapse of a $3 billion "hedge fund" partnered by them. On the Academy's reputation, it acted like Nobel's celebrated discovery, dynamite.

When Sen was woken up by a call from Stockholm, at 5 a.m. in New York, where he'd gone for a lecture, the news came as a surprise to him. At another end of the planet, in Tagore's Santiniketan, Amita, his 87-year-old mother, found it downright unbelievable, having got accustomed to near-misses almost every October. "I won't believe it until I see it on the TV," she told Sen when he rang her up from his hotel suite. She could see it in a few minutes as the news soon ricocheted off the satellites, showing Sen walking down a Manhattan street in a navy-blue shirt and a grey tweed jacket, facing journalists' questions. There was a chorus of jubilation from India and abroad. West Bengal Chief Minister Jyoti Basu interrupted his speech at a public meeting in North Bengal, to announce the news about "our" Amartya Sen. To a state where the Marxist ideology has famously failed, the Nobel Prize being awarded to one of its sons could justifiably act as the Viagra of self-pride.

Of all the grandstanding sound bites perhaps the most perspicacious was from Jawaharlal Nehru University (JNU) professor and Sen's student Deepak Nayaar. "Everybody knew that there is a poverty line. But it was left to Sen to show how to measure the extent to which an individual drops below that line."

However, there were dissenting voices. The first, and perhaps the most articulate criticism of this year's prize came in the Wall Street Journal where Robert L. Pollock wrote that Sen was remarkable "only for the extent to which his renown outstripped the quality of his work". In an article "The Wrong Economist Won", he claimed if the prize had to go to development economics, Peter Bauer was a better candidate. Bauer had consistently fought the "misguided belief" that government aid promotes economic growth. Echoes of these thoughts were even audible in the corridors of Lutyens' Delhi where, after the 1991 reforms, the dirigiste mindset has, if not exorcised, been pushed close to the exit door. But for a country starved of international honour, the Nobel Prize is simply too awe-inspiring to allow any carping.