Thoughts on economics and liberty

Why Amartya Sen is not a classical liberal

I'm often asked by people (both Indians and Australians) what I think about Amartya Sen. I tell them that at least some of his ideas are dangerous!

They are surprised.

But there is nothing to be surprised if you know what I stand for and what Sen stands for. I stand for FREEDOM. Sen stands for ECONOMIC EQUALITY. That is the difference, in a nutshell. Sen talks and writes about freedom but he is essentially all about economic equality.

I do admire his work in theoretical welfare economics out of sheer curiosity – noting that welfare economics is (almost) totally irrelevant to policy making. Also, as an Indian I'm parochially pleased that a fellow Indian was given a Nobel prize (although in my view, Jagdish Bhagwati is more deserving). But my fundamental philosophical difference with Sen doesn't allow this happy parochialism to be sustained for long. 

Sen's ideas resemble, in many ways, those of John Rawls, a social liberal. Both argue NOT in favour of negative liberty but in favour of positive liberty (see DOF for more about what this means), forgetting that a belief in positive liberty motivates the state to become the Big Thief, destroying the only liberty that counts – negative liberty.

In my draft manuscript, DOF, I've picked apart John Rawls's inconsistent, untenable arguments. Sen is inconsistent, as well. For instance, he writes about freedom on the one hand but advocates land reforms (i.e. redistribution) on the other, rejecting property rights. But such a view is impossible to sustain! There can't be freedom without assured property rights. 

The classical liberal is comfortable with a social insurance scheme (not redistribution!) whereby we ensure a modicum of equal opportunity for all including a social minimum (through a negative income tax), emergency health care for all, and education of all children to age 18. But this standard classical liberal approach doesn't satisfy Sen. He wants to go well beyond this, to establish, for instance, an "entitlement over an adequate amount of food" (But I believe that while the social insurance program can top-up the income of those below the poverty line, that's where the role of the state comes to an end. If someone chooses thereafter not to eat food but to burn that money, that's his choice. We can't put food inside people's mouths. And the concept of responsibility is crucial to this equation). 

Similarly, Sen is keen to reduce "inequality" between urban and rural areas. However, I believe that living in urban/rural areas is a personal choice: each has its advantages and disadvantages, and it is none of the business of the state to equalise anything, anyway. Let there be choice, and let the state not forcibly move people around as if they were pawns on a chessboard.

Equality (and its consequent planning) fascinates Sen at each step – and takes him astray. His is therefore NOT a freedom-based agenda, but a statist and interventionist one.
 
His many policy failures are mainly underpinned by his underestimation of government failure (about which he is well advised to listen to brilliant Indian economists like Deepak Lal or Jagdish Bhagwati – if he doesn't care for my advice despite my extensive experience of governance failures gained by working inside bureaucracies). He wants India to have more, not less government. Further, he wants governments to get involved in social problems such as "social exclusion" and "gender inequality". In my view these are NOT things for governments to get involved. The state can do its job best by being blind to all distinctions amongst citizens. Let social reformers lead on social matters. We ought to be wary of empowering IAS officers (who may hold a range of whimsical views) to "resolve" our social problems – by throwing good money down the drain.

Sen's positive liberty agenda will ruin India – just as Nehruvian socialism destroyed India. The only good thing about Sen is that his is a more pro-market policy position than Nehru's was. But that's exactly where our agreements come to an end. He fails to understand that we CAN'T have the cake and eat it too. We can't have freedom and economic equality too. Nyet

More importantly, ANY unjustified contamination of liberty with paternalism (since when is the liberal state our keeper?) will destroy wealth, impoverishing the entire nation. This is not how Adam Smith suggested that nations become rich. Sen would do well to read Adam Smith.

I don't have to say all this, actually. Sen knows well enough that he is not a classical liberal but a LEFTIST. In an interview given to the Outlook magazine (Millennium special, 1999, interviewed by Krishna Prasad) (see below – click for a bigger image) he notes, that "my own political position is distinctly on the left".

I rest my case. As Hayek said, "There is all the difference in the world between treating people equally and attempting to make them equal."

I DO NOT recommend Sen. By all means let him support foolish social democratic  ideas in the West through his teachings. I trust, though, that the West will avoid its fascination with yet another proponent of social democracy. But for India's sake, let's scrupulously stay away from his ideas! 

Directly related post: Amartya Sen’s nonsensical conception about freedom

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9 thoughts on “Why Amartya Sen is not a classical liberal
  1. Surya

    It is good that you have chosen to criticise Amartya Sen. I was somewhat disappointed, when Gurcharan Das kept referencing Amartya Sen in his otherwise magnificient book – "India Unbound". Just because we respect a person, doesn't mean we should refrain from criticising their mistakes. And I completely agree that Amartya Sen's errors stem from the fact that he is focussed on positive liberty ( I must again thank you for introducing Isaiah Berlin to us )

     
  2. Surya

    It is good that you have chosen to criticise Amartya Sen. I was somewhat disappointed, when Gurcharan Das kept referencing Amartya Sen in his otherwise magnificient book – "India Unbound". Just because we respect a person, doesn't mean we should refrain from criticising their mistakes. And I completely agree that Amartya Sen's errors stem from the fact that he is focussed on positive liberty ( I must again thank you for introducing Isaiah Berlin to us )

     
  3. Sanjeev Sabhlok

    Dear Surya

    Gurcharan was taught by John Rawls and knows Amartya Sen well. Gurcharan has evolved a bit and support market oriented ideas but would ideally still prefer Rawlsian social liberalism. That’s why he sees Sen as broadly a sensible thinker. Indeed, that is also why he has written at places that India’s policies are not always to blame for its poor governance, but poor implementation (I differ with him on that, suggesting that good implementation of bad policy is impossible; and Indian policies were bad).

    On a simplistic scale of 1 to 10 (1 representing communism and 10 libertarianism), classical liberalism comes in at probably around 8, social liberalism at about 4. Gurcharan is at around 5. That’s why he does support my work and is a personal good friend, but perhaps prefers Amartya Sen. I’m happy for Gurcharan (or anyone else) to evolve at their own pace.

    Regards
    Sanjeev

     
  4. Sanjeev Sabhlok

    Dear Surya

    Gurcharan was taught by John Rawls and knows Amartya Sen well. Gurcharan has evolved a bit and support market oriented ideas but would ideally still prefer Rawlsian social liberalism. That’s why he sees Sen as broadly a sensible thinker. Indeed, that is also why he has written at places that India’s policies are not always to blame for its poor governance, but poor implementation (I differ with him on that, suggesting that good implementation of bad policy is impossible; and Indian policies were bad).

    On a simplistic scale of 1 to 10 (1 representing communism and 10 libertarianism), classical liberalism comes in at probably around 8, social liberalism at about 4. Gurcharan is at around 5. That’s why he does support my work and is a personal good friend, but perhaps prefers Amartya Sen. I’m happy for Gurcharan (or anyone else) to evolve at their own pace.

    Regards
    Sanjeev

     
  5. RC

    Wow !!!! Very impressed with the way you have articulated your criticism of Sen's position. Your approach is more in line with American conservative thought (only as far as economic freedom is concerned), IMO.
    Sen's theory is almost communism with a little bit of market related things thrown in there. Its shocking that people take such theories seriously and give Nobel prize on top of it !!!
    Bhagwati was one of first ones to point out the damage license raj was doing to India (if I am not mistaken). He has been proven right in the great growth in Indian economy yet no recognition for him.
    I remember this old article linked in a blog post that shows how there were divergent economic thinking in India at the time of independence. <a href="http://www.telegraphindia.com/1031227/asp/opinion/story_2724459.asp">One showed disdain for the market (The Bengali model) and one embraced the markets (the Gujarati model).</a> The Bengali model has been winning intellectually in India intellectually for far too long to the detriment of the economy.
    It is great to hear from smart people who know about the limits of what government can do. I am going to bookmark this blog.

     
  6. RC

    Wow !!!! Very impressed with the way you have articulated your criticism of Sen's position. Your approach is more in line with American conservative thought (only as far as economic freedom is concerned), IMO.
    Sen's theory is almost communism with a little bit of market related things thrown in there. Its shocking that people take such theories seriously and give Nobel prize on top of it !!!
    Bhagwati was one of first ones to point out the damage license raj was doing to India (if I am not mistaken). He has been proven right in the great growth in Indian economy yet no recognition for him.
    I remember this old article linked in a blog post that shows how there were divergent economic thinking in India at the time of independence. <a href="http://www.telegraphindia.com/1031227/asp/opinion/story_2724459.asp">One showed disdain for the market (The Bengali model) and one embraced the markets (the Gujarati model).</a> The Bengali model has been winning intellectually in India intellectually for far too long to the detriment of the economy.
    It is great to hear from smart people who know about the limits of what government can do. I am going to bookmark this blog.

     
  7. Shekar

    Hi,

    I did my Masters at JNU, though never took up economics thereafter (JNU left its scars that I would sooner forget – the fact is, this is one place that never accepts an alternative, read: non-Left, viewpoint. JNU also breeds power-seekers and influence-mongers.)

    But I have long mulled over the Indian economics scene. In my humble opinion – and one that I’d like you to comment on – the discipline of economics could be seen in three eras: enumerative economics that lasted in the West until about the end of the 19th century or the first decade of the 20th; descriptive or classical economics that lasted from about the second half of the 18th until the end of WWI; and neo-classical economics that commenced from the 1950s and lasts to the present day. The last of these also subsumes new variations, such as behavioral economics pioneered by Daniel Kahnemann and Amos Tversky. The first and second were largely European – English, Austrian, and some German – while the last was almost entirely American though there is some overlap between the two, especially .

    The fact is, Indian economics is largely caught up still in enumerative and descriptive or classical economics. Work by Indian economists in India, as gleaned in the Economic and Political Weekly, is almost entirely this. Enumerative economics is a fancy way of saying it is just statistics – statistical navel gazing, as it were, and this can be seen in 99% of student theses that study land-holding patterns, caste distribution in rural wealth, factor productivity, etc. Important, perhaps, but no advanced economics theoretical research. Descriptive economics, of the sort Amartya Sen is famous for, puts new spins on the old Marshallian theses and brings in new, contemporary topics such as gender rights, entitlement, directed state spending, welfare, etc.

    Since social science as a rule has attracted those who did not, or would not, get into engineering or sciences, the descriptive economics discipline that often regurgitates and repeats each others’ viewpoints have been very productive in producing the Left kind of academic. With it, come the leftist students. Hence the left-ridden Indian campuses that cut across all social sciences and, to some extent, the hard sciences as well where political ideology has intruded.

     
  8. Sanjeev Sabhlok

    That’s an interesting take on economics. I’d slightly disagree with your classifications of economics and the timing suggested, but broadly you’re very right about India not having grown into the economic way of thinking. Sen is a classic product of this thought-less economics.

     
  9. Shekar

    I agree with you on my ad-hoc classification. I was being simple so those without a background in economics would appreciate, rather than describe in terms of theory of value, marginalist school, Pareto optimality, etc.

    During my days at JNU, most of my contemporaries were involved with enumerical work that enabled them to acquire PhDs, a very necessary thing to become a UGC faculty. Today, these individuals are faculty at many colleges and universities but have no fundamental knowledge of economics since our academia is still immature in its teaching of the subject, largely relying on ancient 1920s work from the UK. Raghuram Rajan is one of the few deviants, but then he came from the engineering realm, had an extremely good grasp of mathematics especially calculus, that allowed him to undertake doctoral work at Chicago and fully in tune with the latest work. Notably, he had no Indian academic background on the subject.

    Most Indian economists here in the country – existing senior faculty at JNU, for instance, or the increasing stock coming out – have very little theoretical knowledge and can only prattle on about Marshallian, Hicksian (Joan Robinson for those in the leftist end of the spectrum) and Marxian frameworks. They are fundamentally out of tune with modern economics and, hence, have little to contribute in matters of policy in a modern government – monetary, trade, foreign exchange, or deficits. Hence the immature debate on the subject of de-monetization and its effects.

     

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