'Economics is about understanding better the nature of the world in which we live'

Print edition : October 24, 1998

In his longest and most wide-ranging interview in several years, Amartya Sen speaks about his current research, the influences on his scholarship, and the Nobel Prize. He spoke over several sessions on October 15 and 16 on the telephone from Trinity College in Cambridge to V.K. Ramachandran.

Frontline: The Nobel citation this year has a sweep that is noteworthy; it covers your work in economic theory and on the issues of famine, deprivation and inequality.

Amartya Sen: I was pleased by the way they described the subject matter of my work, for two distinct reasons. First of all, they emphasised the variety of work that I have tried to do. This is obviously a matter of some satisfaction and pleasure for me. They emphasised that I have worked on mathematical-analytical issues dealing with social choice theory, including my work on the consistency of majority decisions (my main paper on that subject was done jointly with Prasanta Pattanaik many years ago). There were a number of other analytical results to which they referred. At the same time, they also emphasised my empirical work dealing with the causation of famines and other issues in underdevelopment.

A pleasing thing was that they were not just saying that the award was for a particular paper such as "The Impossibility of a Paretian Liberal" (though they did discuss even that) or for deriving a measure of poverty or for a particular analysis of famine; instead they referred to the whole body of work. I was pleased about that since, first of all, I don't think I have done any stunning work in any particular field and, secondly, I think that economics is not a subject in which stunning work really comes like that. Economics is about understanding better the nature of the world - the economic world, the social world and to some extent the ethical world - in which we live. It is a matter of trying to gain a better grip on the things that affect our lives; achievement in economics is not like a new discovery in physics or the discovery of a new medicine, which are the kinds of things for which physicists or medical scientists could be honoured.

The second reason that the citation pleases me is that it makes an effort to connect different parts of my work. In particular, it relates the social choice work - which was essentially an aggregation attempt that took into consideration the disparate interests, judgments and preferences of individuals - to my studies of inequality and poverty. I think that makes sense, because my interest in poverty lies not just in poverty as a phenomenon detached from the rest of society but in seeing poverty in the context of evaluating how a society is doing.

What are the specific contributions or lines of enquiry that you think bring your work together?

Sixty-four years is a long time to live and I have had the opportunity to work on quite different things. There are connections, but there isn't any work that brings them together in any general form. Some works are more responsive to or dependent on others, while others stand very much on their own.

You once said that one of the unifying factors in your work is your scepticism of the motivational formulation in economics.

That is a continuing theme in the sense that everything I have done has in some way been influenced by my taking a broad view of human rationality, one that does not see people as exclusively self-interested "rational fools". These are imagined people who are meant to be completely dissociated from the rest of society and who try to maximise their own gain without any regard for their own values and norms or any concern for other people, whether in their family, community, class, political group or locality. I think that that kind of dissociated view of humanity is descriptively false and predictively not useful (even though the claim is often made that it is very useful indeed).

In January 1998, Sen, in ceremonial robes, doffs his cap as part of the tradition to mark his taking over as Master of Trinity College, Cambridge.-FINDLAY KEMBER/AP

Many problems about the fairness of distribution, inequality and poverty could not be properly discussed if it is assumed that human beings have no interest in issues such as the justice of distribution and the balancing of efficiency and equity. If human beings had no interest in such issues, it is not quite clear for whom we are trying to analyse these problems.

It is not surprising that when moral philosophers like John Rawls or, going earlier, Immanuel Kant, Adam Smith, Karl Marx or John Stuart Mill deal with issues such as efficiency, equity or liberty, they take at the same time a view of humanity and of what human beings are like. If they were to take the view that no person has an interest in anything other than himself or herself, I do not think that these issues would be of such relevance to society, as in fact they are.

One of the responses to the news of the award is that this prize gives those who work on issues of poverty, deprivation and so on some hope that there will now be a recognition of what should be considered relevant in modern economics.

If that is the effect that the award has it would be very satisfactory. I quite agree that the people who work on the downside of economics, including poverty, hunger and unemployment, are often treated as a kind of special breed, not part of the "mainstream" of economics. There is, of course, no reason why mainstream economics should not be as concerned with problems of deprivation as it is with cases of success or average economic performance or whatever it is that the mainstream is supposed to consist of.

But I do not know how much remedying of that serious problem can be achieved through something as relatively trivial - I do not mean this in a dismissive way - as an award. The Nobel has some standing and prestige, but it is, after all, given by the Academy of one country. And it is not clear that an award of this kind would necessarily bring something that is out of the mainstream into it. That is probably to overread the likely impact of the prize. If it were the case, it would be terrific.

Indeed, my first thought when the award was announced was exactly that. It was not as ambitious as the idea that you mentioned; my first thought was that while it was very pleasing to get the prize myself, it was even more pleasing that the subjects of poverty, inequality, unemployment, hunger and famine, seen within a broad context of social choice and welfare economics, were receiving attention. That seemed to be particularly important, since there are so many people doing excellent work in these areas, which are often taken to be outside the reach of standard mainstream economics. From that point of view, the choice of subject matter of the award seemed to give recognition to a neglected part of the discipline - a part that is often treated as if it is not really mainstream economics.

Who have been the major influences on your work?

There are many influences, those of contemporaries as well as earlier figures. With respect to the earlier figures, the strongest influence is, in a sense, that of Adam Smith. I would put Karl Marx and John Stuart Mill next to him as two figures who have influenced me in a basic way.

In the case of Smith, the influence is primarily that of the Enlightenment vision, that is, the idea that human society can be made a lot better through rational assessment of cause and effect. In my Presidential Address to the American Economic Association in 1995, titled "Rationality and Social Choice", I tried to argue that the use of reasoning and rational assessment can really make a major difference to eliminating the horrors that characterise many societies and to making people's lives better, freer and more fulfilling.

There is a lot of scepticism about rationality today, but one of the successful applications of the concept of rationality can be seen in the work of Adam Smith. He uses it, of course, particularly to justify the roles of markets and exchange against counterproductive controls, but he also uses it to emphasise the role of public education and of a supportive economic and social atmosphere. His general criticism of the rapacity of the rich also fits into his irritation at seeing that many plausible, good arrangements of society are subverted by powerful vested interests, especially people who happen to be rich. It is often not recognised that Smith's criticism of state intervention is motivated primarily by the argument that such interventions are made on the advocacy of rich and privileged members of society and that they tend to promote their own interests rather than the interests of the poor. There are many ideas in Smith's writing that are remarkably powerful even today.

There are a number of particular ideas in John Stuart Mill - for example, the idea of the importance of liberty and the distinction between different types of pleasure - that are important in evaluating social situations. Similarly, Marx's discussion of the social influences on observation and the resulting possibility of objective illusion - of which so-called false consciousness is a good example - has had a major impact. It helps us to understand many social problems, including the toleration of inequality and poverty and gender discrimination in a society. Marx's analysis of exploitation in addition to inequality is very relevant; the issue, I think, is best discussed by Maurice Dobb in his Political Economy and Capitalism.

These are among the formative influences. With respect to contemporaries, my analysis of social choice is obviously strongly influenced by the work of Kenneth Arrow. I remember the occasion when I first encountered his book Social Choice and Individual Values. My friend Sukhamoy Chakravarty drew my attention to the book within a year of its publication. I remember being tremendously impressed by it and later on it became a very big part of my own intellectual enterprise.

As I moved to philosophy, I was initially influenced by writings to which I was led by a Trinity College Fellow, C.D. Broad. When I was elected to a prize fellowship here, and felt that I already had done a thesis that I could, in the fullness of time, submit without having to do very much more work, I decided that it was a good moment for me to try to do some philosophy. I got a reading list from C.D. Broad. I first did some readings on logic and epistemology and then began to read on ethics. The first book I read was by Richard Hare, The Language of Morals, which I found quite fascinating. Although the book has gone rather out of fashion now it was, in my judgment, a very helpful and thought-provoking book.

Afterwards I encountered John Rawls. I read his writings and I had the opportunity of receiving his comments on and criticism of what I was doing. The Theory of Justice was a great source of inspiration for many works in moral philosophy and this applies very much to me too. Both John Rawls and Kenneth Arrow made extensive comments on my book Collective Choice and Social Welfare in the manuscript stage and it bears their direct influence.

I had wonderful educational opportunities. At Presidency College (Calcutta), I was taught by Bhabatosh Datta and Tapas Majumdar and others like Dhires Bhattacharya. Sushobhan Sarkar was also a great teacher, one who influenced my understanding of history. At Cambridge, I benefited enormously from my association over many years with my teacher Maurice Dobb, with Piero Sraffa and Dennis Robertson. As it happens, the line of analysis for which Sraffa is most remembered, that is, the analysis reflected in The Production of Commodities by Means of Commodities, is not something that really ever appealed to me, but my conversations with him on a variety of subjects - rationality, utility, inequality, exploitation and the nature of society - were very helpful. These are subjects on which Sraffa did not publish very much, although I understand he had a lot of notes on them.

I also went to Joan Robinson. She was a very engaging person, even though it was quite clear that there were differences between her priorities and mine and that she was very keen on my dropping my priorities to do the kind of work that she thought important. Neither Dobb nor Sraffa ever did that - they always encouraged me to work on things that I found important.

These are many names and I can think of many others, but perhaps that shall have to do for now.

What are you working on now?

I have two books in press. One is called Development as Freedom, and is to be published by Knopf and probably simultaneously in paperback by Vintage. It is meant to be a popular book and is based on the five lectures I gave in the World Bank as a Presidential Fellow. These lectures went under the title "Social Justice and Public Policy". I later tried to make the material more accessible and attempted a book that could be read widely.

The basic idea behind the book is that the way to judge individual advantage is to see how much substantive freedom a person has. The book views the different implications of that general approach for economic development and the creation of social opportunity.

The second book, called Freedom, Rationality and Social Choice: The Arrow Lectures and Other Essays, is a more technical book. The first three essays are a somewhat revised version of my Kenneth Arrow lectures given at Stanford in 1991. If Development as Freedom uses the idea of judging individual advantage in terms of freedom, this book goes into the question of how freedom is to be assessed in order to gain a view of how to evaluate, assess and build on the notion of individual advantage. The book also includes two recent Econometrica papers, one titled "Maximisation and the Act of Choice" and the other titled "Internal Consistency of Choice".

I am also in the process of writing a book that has gone on far too long, my book on rationality. There is another book, on objectivity, on which I am very keen, particularly since subjectivism and the disputing of objectivity has gained so much ground in the contemporary "postmodern" world.

In her home in Santiniketan, with photographs of Amartya Sen on the walls, his mother Amita Sen reads news of the award.-PARTH SANYAL

What is your view of "development as freedom"?

The basic approach is that individual advantage is to be judged by the substantive freedom that the individual enjoys and that development is the process of expansion of individual freedom. As Marx put it, it has to do with "replacing the domination of circumstances and chance over individuals by the domination of individuals over chance and circumstances."

I discuss, in particular, five different kinds of freedom. The first is internal freedom, or the freedom to be creative, the freedom to reason and to think in a lucid, articulate, rational way. For that the important policy issues are such matters as literacy, education, communication with others and the openness of society.

The second is participatory freedom. Here the principal issues are democracy and political liberty, but particularly a society that is based on public debate and discussion. There is some connection here with the ideas that have been emphasised on the one side by Habermas and on the other side, in the public choice literature, by James Buchanan. I think it is interesting that both of them have seen democracy in terms of what Buchanan calls government by discussion.

There is then the question of transactional freedom. This is where markets enter and where one part of Adam Smith's writings are very important. The freedom to participate and exchange and to deal with each other is a very important part of enhancing individual opportunity as well as increasing the efficiency of economic and social arrangements.

The fourth is procedural freedom, which includes absence of discrimination and inequality of treatment, as well as issues of legitimacy and matters such as financial regularity and the absence of corruption. These are what we may expect when we are dealing with each other in the society in which we live.

Finally, there is protective freedom. Even though we may want chance and circumstance to be dominated by human will, there will be situations in which things go wrong and when they do, there must be social safety nets to prevent people from falling down under. In very poor economies that fall can take the form of famine; in other cases, economic crisis may not manifest itself as a famine but could take the form of severe deprivation.

I argue that these are important issues in the formulation of economic and social policy. Let me illustrate the failure of each of these freedoms in terms of particular cases. Examples of the violation of "internal freedom" are illiteracy and lack of education. Another example is the lack of female opportunity and keeping the minds of women clouded by some false perceptions of the "naturalness" of gender inequality. The most extreme example here is that of Afghanistan, but we do not have to look that far - I think India is a very good example of the violation of such freedom. There are districts in India where female literacy is below ten per cent.

Coming to "participatory freedom" I would say that despite all its successes, China's failure lies in the inadequacy of participatory opportunity. I take the democracy movement quite seriously in this respect.

Regarding "transactional freedom", the pre-reform Indian situation can be taken to be an example of its failure. This applies to many other parts of the world as well.

The issue of "procedural freedom" and legitimacy comes up particularly in the context of the rampant corruption that we see in many countries, for example, in South Asia, East Asia and South-East Asia. Indeed, the current financial crisis that we are witnessing has something to do with that.

Finally, the lack of "protective freedom" can be illustrated by social arrangements that allow people to go into a famine and when there is nothing to stop people from falling into dire poverty, hunger and death. The issue of protective freedom is also very serious in the East Asian and South-East Asian cases, as it is in contemporary Russia. Indeed, it is reflected in a dramatic rise in mortality rates in Russia. I do not doubt that you will see a rise in mortality rates in Indonesia as well.

What we need to do is to pay attention to each of these different dimensions of freedom. That is what I have tried to do in my work on development and freedom.

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