Thursday, March 18, 2010

Amartya Sen - Power and Capability; Development as Freedom

On Monday 15th March 2010 Nobel prize winner Amartya Sen gave the annual lecture at Demos. Our guest blogger, Christian Aid's David McNair, was in the audience.


As Amartya Sen took the stage to speak, his slight frame and gentle manner seemed to belie a force of intellectual rigor. A Nobel laureate for his work on economics, Sen pioneered the idea that development is ultimately about freedom. The freedom to choose one's life course and the capability to take advantage of that freedom.

Freedom has many dimensions.

 In his view, it is among the most feared of human conditions. Precisely because those in authority often fear the freedom of their citizens and the limitations it could bring to their own power. The fear leads to what Sen called "unfreedoms", or injustices, for others.

He urged the audience to take a more pragmatic approach and seek out injustices and use the power we have to challenge them. Currently, Sen said, we focused too much on just institutions to mediate a just society.

 To illustrate his point that economic and social advantage is reflected in capabilities (what one can do measured against the things that one values), Sen introduced the concept of the conversion handicap - the cost of converting income into a good living. A disabled person not only faces additional challenges in raising an income, but the cost of living is also higher. As such, the sole focus on income as an indicator of economic justice is inadequate.

Speaking about the shortcomings of GDP as an indicator of development, Sen suggested that individual characteristics such as biological makeup, circumstances, gender, talents, as well as the extent of pollution and local crime often impinge on human freedom in ways which are more significant that economic inequalities.

When asked for his opinion on bankers, Sen appeared to be single-minded. With greater economic power comes greater responsibility, he said, and the state must have a role to play in redistribution through progressive taxation.

For economists and those interested in development, Sen's words present a significant challenge. How do we develop public policies that lead to human freedom and challenge 'unfreedoms'? Here challenging economic inequality is the start, not an end in itself.

TJN adds: from his book Development as Freedom, Sen summarises:

"Development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect of public facilities as well as intolerance or overactivity of repressive states. Despite unprecedented increases in overall opulence, the contemporary world denies elementary freedoms to vast numbers - perhaps even the majority - of people."


Blogger Physiocrat said...

There is much of value here but what of economic freedom?

When the person becomes the unit of taxatipn, an army of bureaucrats and police is needed to check up on everyone, rich and poor, and we end up with obscenities like "report your neighbour" hotlines.

Sixty years ago, passengers would arrive on the train in Brighton and porters would come onto the train and help them with their luggage, all the way to the taxi rank, for which they would get a tip of a shilling or so, which, together with their regular wage, added up to a decent livehihood.

And what happens now. Passengers lug their own luggage and when they get to the taxi rank, a beggar asks them for money.

Suppose the train company allowed licenced porters to carry luggage and keep the tips? First, it wouldn't be allowed because the inland revenue would insist that they were employees and would make sure that PAYE and NICS was paid by the train company. Second, all sorts of other employment legislation would kick in. Third, the beggars would lose their meagre benefit. So the beggars are actually locked into their situation.

And that is how the taxation of people (as opposed to the taxation of land) destroys economic freedom.

11:39 pm  

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