Arrested development

Amartya Sen, University Professor at Harvard, won the Nobel prize for his contributions to welfare economics in 1998. We met at Trinity College, Cambridge, where he has been a fellow since 1957, to discuss his new book An Uncertain Glory, co-written with Jean Drèze. I put to him some of the criticisms made by Partha Dasgupta in his review opposite.

Jonathan Derbyshire How do you respond to the charge that you don’t pay as much attention in the book as you might to the “negative externalities” of growth and development—in particular, environmental degradation and population pressure?

Amartya Sen We do say quite a bit about the environment, but maybe it’s not adequate—our primary battle was on a different front. Is growth inescapably damaging to the environment? I don’t think so.

The biggest influence in reducing the fertility rate, for example, is women’s literacy. The best way of cutting population growth is women’s education, gainful employment for women. In China, for example, the low fertility rate they’ve achieved is explicable entirely by the good things the Chinese have done—widespread education of girls, widespread economic independence of women. Anything that increases the voice of young women tends to cut down the fertility rate. So human capability expansion in the form of education is very environment-friendly.

JD Why do you reject the view, which Dasgupta attributes to Jagdish Bhagwati and Arvind Panagariya, that successful economic development occurs in two stages, with improvements in healthcare and education coming after GDP growth?

AS Well, there’s no historical illustration of it. Japan isn’t. China isn’t. Korea isn’t. Hong Kong isn’t. Taiwan isn’t. Europe isn’t. America isn’t. So where are we drawing that model from? That’s not how things have happened in the world. They’ve all done it through increasing capability. I know of no example of unhealthy, uneducated labour producing memorable growth rates!

JD You once said to me that the Indian left ought to be more worried than it is about the fact that India has a higher proportion of undernourished children than anywhere else in the world. Was that thought your starting point here?

AS That’s exactly right. At the time [I said that], I hadn’t done the systematic work to see what the other indicators looked like, but I knew that on the undernourishment index we were very low. But then I found that this was true in many other aspects—having stable and secure medical arrangements for all; having a well functioning school system to which every child has access; universal coverage of immunisation. In all these areas India seemed to be doing worse than many countries which it has overtaken in terms of per capita income, for example, Bangladesh.

It became clear that India was systematically underperforming in these respects, even when it was outperforming other large economies with the exception of China. Today, despite its fall in growth rate, it still has the third highest rate of growth among large economies after China and Indonesia.

JD The global context matters here doesn’t it? That is, the competition with China and the other BRIC nations and India’s sense of itself as punching its weight on the world stage.

AS Yes. Economic growth is important precisely because it can help people to lead better lives. But to take growth itself to be a fetishistic object of admiration is part of the problem. I think we have to understand that, ultimately, not having an educated, healthy population is not only bad for well-being but also bad, in the long run, for sustaining our economic growth.

JD You argue that there is a “two-way relationship” between growth and “social justice”. How does the expansion of what you call human “capability” enhance economic growth?

AS Indians have missed the fact that human capability is not only important in itself, but that human capability expansion is also a classic Asian way of having sustained economic growth.

It started in Japan, after the Meiji restoration. The Japanese said: “We Japanese are no different from the Europeans or the Americans; the only reason we’re behind is that they are educated and we are not.” [They saw]that an educated, healthy workforce is very productive.

JD Dasgupta writes that “Drèze and Sen can’t take their eyes off poverty and inequality.” All advanced market economies are characterised by economic inequality to a lesser or greater extent. But this is aggravated in India by the caste system isn’t it?

AS It does this in a very big way. First, it is stratification. Second, it is stratification on very hardened lines. It’s easier to become bourgeois than it is to become a high-caste Brahmin! Third, there is a kind of approach that has gone along with the caste system, which is that it is a natural order and you can’t change it, and that the alternative is chaos. There are a lot of people who tend to think that undoing the caste system now would be a destabilising course of action.

The idea that you need a good school, basic healthcare, that everyone needs a toilet in their home—these have become more ingrained in many societies, even poor ones, than has been the case in India. And I think this is a ridiculous failure of vision.

JD It’s a failure of vision, but not an insuperable obstacle to change presumably? The book ends on an optimistic note after all.

AS In order to get there in a democracy you have to fight for it. There is no way that democracy automatically guarantees it. I first argued that functioning democracies prevent famine in the late 1970s. In the case of famine, it’s very easy to generate activity. In the case of undernourishment, less so.

What I’d say about India today is that it is a democracy but that it’s not doing very well. There are all kinds of ways in which democratic debate doesn’t proceed well. It can’t be a tribute to democracy in Britain, for example, that the Labour leadership should be tempted to endorse austerity just as most of the best economists in the world have rejected it. That the Labour Party thinks that by embracing the “wisdom” of austerity it can capture votes is not a tribute to the functioning and practice of democcracy in the United Kingdom. So all democracies have limitations.

Read the full transcript of Jonathan Derbyshire's interview with Amartya Sen here