The ethical side of economics

Published : Mar 18, 2000 00:00 IST


Understanding Development: People, Markets and the State in Mixed Economies by Ignacy Sachs; Oxford University Press, New Delhi, 2000; pages 204, Rs.450.

IGNACY SACHS may not be a familiar author to many Indian scholars of development economics today, but in the 1960s he was a well-known figure among academics in India mainly because of his pioneering and perceptive study, Patterns of Public Sector in Underdeveloped Economies (1963). A native of Poland, he had an international exposure from very early days. He was studying philosophy in Brazil in the late 1940s when he had his first introduction to Indian and, in particular, Gandhian thought.

In the early 1950s he returned to Poland's Institute of International Affairs. In 1957, when the Director of the Institute was appointed Poland's Ambassador to India, Sachs joined him as Secretary for Scientific and Technical Cooperation. He enrolled as a Ph.D. student in the Delhi School of Economics under the supervision of Prof. B.N. Ganguli and took his doctoral degree. Subsequently he assisted the noted Polish economist Michal Kalecki when the latter came to Delhi to work with the Planning Commissi on.

Later on Kalecki and Sachs started a research centre for underdeveloped countries in Poland with Kalecki as Chairman and Sachs as Director. After the Soviet invasion of Czechoslovakia in 1968, when non-conformist academics in all Eastern European countri es became insecure in their countries, Sachs moved to France and joined the Ecole des Haute Etudes in Sciences Sociales in Paris, where he has stayed ever since. There, along with Daniel and Alice Thorner, Sachs continued his studies on development.

In this biographical account, the author throws some light on his rather unique approach to development, influenced at once by the economics of Kalecki and the ethics of Gandhi as also by the intimate knowledge of development issues in different parts of the world. Thus Sachs sees the development problematic not as the division of the globe into the North and the South, but as the persistence of the South in the North in spite of the claim of the North to be developed and the presence of the North in th e South though the South is said to be underdeveloped - or the "Third Worldisation" of the whole planet, in terms of another familiar characterisation.

Sachs also insists that while economic growth is a necessary condition for development, growth may be of different types with different implications. Four different kinds of growth are noted: savage growth, which has a positive economic dimension but is socially and environmentally destructive; socially benign growth such as the kind that Europe experienced from 1945 to 1975 which, however, was environmentally disruptive; environmentally benign, but socially inequitable growth of the kind that many cons ervationists put forward; and finally socially equitable and environmentally benign growth which is the only one that can be considered as 'whole' development. Hence, in order to achieve whole development it is necessary to deal simultaneously with five themes - peace, economy, environment, justice and democracy.

Writing in anticipation of the Earth Summit of 1992 and the Social Summit of 1995 and commenting on them subsequently, Sachs says: "We feel that development, in the full sense of the word, should have a social purpose justified by the ethical postulate o f intra-generational solidarity and equity, taking the form of a social contract."

The book has nine chapters; more accurately, it is a collection of nine essays written between 1991 and 1999, all dealing with the overall theme of 'whole development'. The sub-themes include development in the context of the liberalised and globalising world economy, development strategies in the aftermath of the Asian crisis, negotiated and contractual management of biodiversity, and the local, national, regional and planetary implications of citizenship. Such diverse sub-themes are held together by t he primary concern with people's livelihood and the recognition of the pre-eminence of political decisions in the process of development through appropriate institutions, including markets and the state.

The sixth essay on rethinking development set in the Asian context deserves special attention. The collapse of 'real socialism' in many parts of the world, the failure of different varieties of capitalism to remove privation and unemployment and the vola tility and insecurity that its latest phase has so clearly demonstrated in many Asian countries make it necessary to search for new paradigms of development. Combining insights from Kalecki's macro-economics and Kumarappa's Gandhian economics, Sachs says : "The emphasis should be on the distribution of wealth in the process of producing wealth... Full employment (including self-employment) and ex-ante defined relative shares of wages and profits in national income should therefore become entry points in the interactive process of designing the development strategy..."

To achieve this the author recommends what he calls "Middle-way Democratic Regimes" consisting of a leaner but stronger state, a non-state public sector, and a market system that does not get controlled by vested interests. The political counterpart of t his strategy is spelt out in the eighth essay on citizenhood. Apart from the refreshing treatment of a wide range of issues, Indian readers will find the literature referred to in the volume from different parts of the world particularly useful.

Unfortunately though, the fact that the book is a compilation of essays has imposed some limitations on it. The treatment of the central theme is fragmented with frequent distracting repetitions. To do justice to the concept of whole development a more i ntegrated exposition is necessary.

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