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.
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 dont 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.
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 peoples 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 Smiths 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 Smiths 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, Marxs 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. Marxs 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 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 Smiths 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. 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.