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Updated: September 6, 2013 03:28 IST

Charge of the unenlightened brigade

A. K. Shiva Kumar
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THE HINDU

Jagdish Bhagwati’s attacks on Amartya Sen are based on a series of misattributions and obscure the real issues on which the two economists differ

Rich and lively public debates are the raison d’être of any democracy. But the recent attacks by Professor Jagdish Bhagwati on Dr. Amartya Sen confound the real issues on which Sen and Bhagwati differ.

Bhagwati tries to position himself as a proponent of growth that would benefit the poor through later redistribution. In contrast, Sen is portrayed as being anti-growth, and as advocating only for “redistributing” the meagre resources that are available. This is a complete misdiagnosis, based on a number of serious misattributions.

Instrument for progress

First, Sen has never denounced economic growth. On the contrary, he has repeatedly argued for the importance of economic growth as an instrument for economic progress (but not as an end in itself), beginning with his first publication, in the Quarterly Journal of Economics in 1957. More recently, in Hunger and Public Action, published in 1989, Jean Drèze and Sen outline in some detail the strategy of “growth-mediated security,” which calls for promoting economic growth and directing the greater general affluence and also larger public revenues to combat deprivation and enhance health care and education. In a recent interview to Prospect’s Jonathan Derbyshire, Sen has reaffirmed his position: “Economic growth is important precisely because it can help people to lead better lives. But to take growth itself to be a fetishistic object of admiration is part of the problem. I think we have to understand that, ultimately, not having an educated, healthy population is not only bad for well-being but also bad, in the long run, for sustaining our economic growth.” Sen has never been against growth in general, but has shown the inadequacy of the type of growth that fails to improve the lives of ordinary people.

Second, he has consistently argued that economic growth is an important means of development but the intrinsic ends or goals of development have to be more than simply material advancement. His Development as Freedom opens with the following sentences: “Development can be seen, it is argued here, as a process of expanding the real freedoms that people enjoy. Focusing on human freedoms contrasts with narrower views of development, such as identifying development with the growth of gross national product, or with the rise in personal incomes, or with industrialization, or with technological advance, or with social modernization. Growth of GNP or of individual incomes can, of course, be very important as means to expanding the freedoms enjoyed by the members of the society … Viewing development in terms of expanding substantive freedoms directs attention to the ends that make development important, rather than merely to some of the means that, inter alia, play a prominent role in the process.”

Education and nutrition

Third, Sen has consistently championed health, education and nutrition because they are intrinsically significant as well as an important means to boost economic growth. There is, in fact, no contradiction here: the advancement of human capability is both a part of enhancement of human freedom and well-being and a significant way of promoting and sustaining high levels of economic growth. An educated and healthy labour force is both a contributor to good human living and freedom, and to advancing and sustaining a dynamic and expanding economy. In their recent book, An Uncertain Glory: India and its Contradictions, Drèze and Sen note: “It is necessary to recognize the role of growth in facilitating development in the form of enhancing human lives and freedoms, but it is also necessary in this context to appreciate how growth possibilities of a country depend in turn on the advancement of human capabilities (through education, health care and other facilities), in which the state can play a constructive role.”

Fourth, Sen is not against the “provision by the private sector” of “food, education and health” to the deprived. Nor has he ever said or let alone “insisted” that “the government alone must provide them,” as Bhagwati claims. Drèze and Sen discuss in An Uncertain Glory, the limitations of an exclusive reliance on private markets for promoting human development. “[A]symmetric information between buyers and sellers, and more generally a lack of adequate knowledge on the part of the uninformed patients or customers limits their ability to choose sensibly and opens them up to exploitative practices. The drive for private profits can diverge from the goals of social welfare. Since profitability is conditional on the ability of the purchaser, or the consumer, to pay, private profits can often be a very inadequate guide to the priorities of public need.” At the same time, they discuss the importance of improving the delivery and reach of public services and suggest various ways of promoting accountability and efficiency in governmental operations (which is an important focus of their joint book). To take state action to be hopelessly doomed and neglecting the means of bettering them, which often masquerade as “realism,” is, in fact, a resignation to the lethargy of doing nothing. It is a “smugness based on cynicism,” as Sen said in a public speech in Delhi.

Health care

Fifth, while acknowledging that private schools offer a legitimate alternative, Drèze and Sen argue that this “cannot in any way, take over the role that state schools are meant to play and have played in the educational transformation of most countries.” Worldwide experience has demonstrated the power of public education in equitable educational development. There are at least four problems with private schools: affordability; asymmetry in information and knowledge of families and students; insufficient competition even from government schools; and the externalities of school education as well as indivisibilities of acquired knowledge. Similarly, health is also a case of “asymmetric information.” Given that patients generally know much less than the doctors about what they are suffering from and what the best treatment is, the possibility of severe exploitation of patients by profit-seeking private providers is a real danger. And quite often it is also the actual experience of vulnerable people.

Drèze and Sen point out that given the limitations of market arrangements and of private insurance in the field of health care, public provision of health services has an important foundational role to play in the realisation of universal health coverage (as it has done in nearly every country in the world that has achieved universality of health coverage). They draw attention to the fact that “India has moved towards reliance on private health care without developing the solid rock of support of basic public health facilities that has been the basis of almost every successful health transition in the history of the world — from Britain to Japan, from China to Brazil, from South Korea to Costa Rica.” They argue that transforming India’s health care system to fulfil the commitment to universal health coverage would require, first of all: “to stop believing, against all empirical evidence, that India’s transition from poor health to good health could be easily achieved through private health care and insurance. This recognition does not, of course, imply that there is no role at all for the private sector in health. Most health care systems in the world have space for private provision, and there is no compelling reason for India to dispense with it.”

Kerala model

Drèze and Sen acknowledge and appreciate the contribution made by the “plentiful presence of the private sector in medicine in Kerala today.” But they also point out that Kerala’s health transition started with a commitment by the State to universal coverage. It was only later that the private sector in health became a major contributor to the health care of the people in Kerala — supported by the rapid growth in incomes (closely related to the expansion of human capabilities). They go on to draw an important lesson. “There is a world of difference,” according to Drèze and Sen, “between (1) allowing — and even encouraging — the auxiliary facilities of private health care to enrich a reasonably well-functioning state system (as happened in Kerala), and (2) trying to rely on private health care when the state provides very little in terms of health facilities (as in many other states, particularly in north India).”

Sometimes, heat can generate more smoke than light, obscuring the real issues that need to be discussed. Endless repetition of confused — and false — attributions cannot alter the nature of the real questions that have to be faced.

(A.K. Shiva Kumar is a development economist and lives in New Delhi.)

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The arguments by the author are incomplete because he has not addressed
the situation where the state has limited resources which is the case
with India. It is all nice to talk about welfare. But if the means for
providing welfare is less, should one attempt more growth or spend the
available money on social sector? That is the central question.

from:  Vijay
Posted on: Sep 6, 2013 at 20:31 IST

In a poor country like ours, strong Government programs are necessary. The key question is why is an encouraging environment for private investment and the interest of the poor deemed to be opposable?

All the private sector needs is (a) a stable and predictable policy framework (b) efficient, fair and non-corrupt governance (c) good physical infrastructure (d) rational taxation.

I fail to see why any of the above are inimical to the interests of the poor.

from:  Prashanth
Posted on: Sep 6, 2013 at 20:15 IST

It is amazing to see some comment of apologist on curruption. Corruption is overpowering of social and constitutional law e.g. legal , moral etc.
Apologist of capitalism are arguing that Sen is not familiar with prevalent corruption of India. May be true! But are they?

Let us put the boundary of 1991 and analyze the force before and after this boundary who were responsible for corruption?

Feudal forces were responsible for corruption before 1991 and Market force were responsible for corruption after 1991. Analyze the scale of corruption. Please keep mind 2G, Coal, Harshad Mehta, Telcom Scam of Sukh Ram, Iron etc. etc.
As far as delivery by Govt. School concern, please go through history of Govt. Intermediate Colleges of UP, particularly Colvin Talukadar Intermediate College , Lucknow and Netarhat school of UP. They have delivered better than any school of India. What destroyed them? Corruption of Market force!
Is AIIMS, PGI, Safadarjung and others Hospital are not delivering!

from:  Arun Kumar Singh
Posted on: Sep 6, 2013 at 19:54 IST

Basically, Bhagawati's prescription is for a 'trickle down theory'.
where private growth comes first. Giving more subsidies to the
corporate sector by the State to facilitate private led growth and
which in turn will create more jobs. But, for Sen, the idea is
economic growth as well as public funding in education and health
which in turn will help the country in the long run. Most developed
countries, especially in Europe, have a history of robust public
investment in education, which later helped them exploit opportunities
offered by the globalized world. Both, economic growth and social
development have to happen simultaneously and not in tandem.

from:  Subroto
Posted on: Sep 6, 2013 at 17:32 IST

This kind of biassed op-ed is a hallmark of the "new" Hindu. An unashamedly leftist, pseudosecular and Congress (and afraid of any 'odd' Kalagam) leaning attitude. It does not seem to want to publish any contrary views whatsoever.

from:  Giri
Posted on: Sep 6, 2013 at 14:18 IST

NOT IN A CLEPTOCRACY:-
Premises of both houses are well known. They both say the same thing
except that Prof Bhagwati is more for the abstract market forces for
both - the growth and the distribution; and Prof. Sen's position is
too well known to differ with. But we also know that the state
apparatus is totally corrupt and the virus of unethical practices and
corruption is rampant in the Indian market; so much so that if you
pick up any thread it would reek of corruption. Markets and the state
sponsorship for welfare operate well in a democracy and not in a
cleptocracy. leaders- in Politics, Economy, Bureaucracy, Religion,
Services- name any elite, are so much sure of their security- which
mostly comes with stacks of money stashed away in foreign parks, that
they are hardly serious about ruling the country and serving the
people! Now the corruption is the core issue and it would destroy any
decency or the faith that any ideology or the theory may wish too
establish.

from:  rohan
Posted on: Sep 6, 2013 at 13:26 IST

Hello Mr.A. K. Shiva Kumar, Mr. Sen and other people sharing their views,
The ultimate target is a "developed society". Developed society means where people can earn their food, health and housing. Currently majority of Indian people cannot earn their food, health and housing due to lack of oppurtunity and capacbility.
Bhagwati is for improving oppurtunity first and you guys are for increasing capability first. Bhagwati is saying give priority in creating oppurtunities so that people can earn and improve their capabilities. And what you guys are saying is enough of creating oppurtunities, lets improve the capabilities and the best way for this is to ask the state manage everything. What You guys are saying is pre 1991 stuff,and Bhagwati is saying post 1991 stuff.
In 2013 you guys are totally irrelavent and Bhagwati is somewhat relevant...but a new thought and direction is necessary...Manmohan Singh failed to give that beacuse of people like you.

from:  Praveen Nair
Posted on: Sep 6, 2013 at 12:50 IST

Sen's diagnosis of the problem is correct and so is Bhagwati's. The
problem is in the approach to the solution of the problem. Professor
Sen is wrong precisely because he does not know how to finance the
mega project such as MGNREGA, FSB, etc. in a fiscally precarious
India. He does not show us the money to sustain this model. It appears
that it is a exercise in destroying the economy and in effect
destroying the socioeconomic condition of the masses.
It is noteworthy Sonia Gandhi remarked emphatically in Parliament on
FSB that "money has to be found", yet she did not specify from where
she would get that money. When the country is reeling under serious
financial constraints on account of rising Oil, Gold and merchandise
bill, experts such as Prof. Sen is prescribing a drug of cancer for
fighting fever when it is simply clear that India needs to maximize
its gains to invest in social sector. He is making it difficult for
the government to think in clear terms wrt to policy decision!

from:  Atul K Bhaskar
Posted on: Sep 6, 2013 at 12:28 IST

A great open minded article clearly exposing Bhagwati's effort to misinterpret Sen's objectives. People who call it biased or give any kind of political colour shoud review nd realise dat their preconcievd notions are not as per reality.

from:  Anurup Mitra
Posted on: Sep 6, 2013 at 12:03 IST

Yet another article supporting Sen's welfare economics and top down welfare state model. Hindu must have another article presenting Bhagwati's views. We have seen what Sen type model has led to in the last 65 years in India - more actual malnutrition and hunger. Because, except for in a few states, the PDS and healthcare schemes operate on the corrupt cronyism model.
Bhagwati is right in that growth has to be bottom up. Quality education, healthcare and skill development of the people, that countries like China and Singapore achieved, were totally ignored by Congress. Population control is critical for India which again nobody wants to talk about. Once the economy grows & there are jobs across the spectrum, there will be no need for sops like Food Security Bill. This big socialist talk serves the purpose of only the rich Socialist class disconnected from harsh reality, and we have plenty of those around! Ask the real poor and they will tell you what they really want.

from:  Neeta S
Posted on: Sep 6, 2013 at 12:01 IST

Interestingly, a closer look would actually show that the differences between these two economists are not as large as these conspirators in columny (and sometimes calumny) lead us to believe. Both see
growth as the force for the gradual uplift of the poor and deprived. How growth is achieved is debated. For Dr.Sen, strong state sponsorship is the way to go, and for Dr.Bhagwati growth is created by a market based meritocratic society where the state enables. The truth is probably a mix of the two and they perhaps will converge if one were to ask them to do a live debate. .

from:  Sri Raghavan USA
Posted on: Sep 6, 2013 at 11:38 IST

It doesnot matter who is favoured by whom. The thing which matters is that the development of all the sectors mentioned by Sen must take place as these are the prerequisities for growth of a State.But public sector should contribute more towards this.

from:  Anmol Sharma
Posted on: Sep 6, 2013 at 11:08 IST

@ authors of first two comments
If you find anything wrong with the arguments made by A.K.Shiv Kumar, please put in print. Making categorical statements give zero value to your comments

from:  Janarddan
Posted on: Sep 6, 2013 at 10:56 IST

We give weight to Sen because he has won the Nobel prize. But what is a Nobel prize? We know that Obama won the peace prize(for God's sake, for peace? Remember Syria?) and the Mahatma never won it.
Is economics even a science? With so many so-called great economists, why are we forever going through misery cycles? One economist propounds a theory and the other debunks it. In the end, the experiments with an economist's truth leaves us with sheaves of paper and lots of misery.

from:  Essen
Posted on: Sep 6, 2013 at 10:35 IST

This is the second op-ed article I came across trying to rebut Jagdish
Bhagwati's arguments refuting Amartya Sen's pro-welfare thesis. It will
serve the cause of being fair and balanced if Hindu also publishes
op-ed article that provides arguments against articles supporting Sen's
line of thinking.

from:  Suvojit Dutta
Posted on: Sep 6, 2013 at 09:56 IST

sen favours congress,the popular welfare schemes like food security
bill and so does congress and the hindu is great advocate of
congress, another biased editorial from hindu to misguide the
citizens and voters in particular and hence this is a saga of all
three partners in crime.

from:  Ajeet B.A LL.B UPES
Posted on: Sep 6, 2013 at 08:54 IST

Dr sen himself propounded theory of entitlement which says rather than giving individuals direct benefits...empower the individual so that he can by that benefits. His support to FSB totally against his this theory. It seems in process of building development theory he became communist by heart so is anti development.

from:  Rahul
Posted on: Sep 6, 2013 at 08:43 IST

These two eminent Economists believe in eradication of poverty but then through two different approaches. Dr Bagwati believes on trickle down concept (Indian experience from 1950 to 1978) or indirect approach to eradication under the assumption that the benefit of growth will be equitably distributed and poverty eliminated. Whereas Dr Sen. believes in "Direct intervention Strategy" (India experimented from October 2, 1978 onwards under the political slogan "Garibi Hatao (1971, Meaning "Abolish Poverty" in Hindi. That doesn't mean Dr Sen is against Growth and Dr Bagwati is against distribution of wealth. Simple logic is. When you are a bread winner for a family, you try to earn to provide the basic necessity to the family. One will not spend without generating income or potential to earn income. Growth must be sufficient but then there should not be any market failures that prevent equitable distribution of the wealth generated. Economic Liberalisation (Growth) from 1990 reduced the poverty much better than the direct attack strategy in India.

from:  Dr C. Kannapiran
Posted on: Sep 6, 2013 at 08:18 IST

Brilliantly written and very informative.

from:  Ajitabh
Posted on: Sep 6, 2013 at 07:18 IST

The above article seems reasonable and convincing.

from:  V S RAJU
Posted on: Sep 6, 2013 at 07:13 IST

The more i read about the this debate the more i get confused. It appears to be the
classic "Chicken - Egg " problem. If Kerala was able to invest in health care before
rapid growths in income which were a result of the said investment, the question is
where did they get the money from to begin with ? I think you are being unfair to
Prof.Bhagwati just as he was to Prof.Sen. If I understand Prof. Bhagwati {who comes
across as a rather bitter person in his interviews and books}, all he says is let us
generate the revenue both public and private, then considering the experience of the
past governments let the people have more direct say in the spending. People can
have more immediate say in a regulated market based system than one where the
bureaucracy has discretionary powers and politicians can only be changed after five
years, so its better to have more direct-transfers,competition based reduction of
supply side constraints and price of services,

from:  shashank
Posted on: Sep 6, 2013 at 06:59 IST

The article makes no sense at all. Substantiating an argument based on certain statements
and paragraphs is a very dangerous practice. Moreover, what is even more
alarming is the highly skewed nature of the article. Also, the headline of the article in itself shows that the author
considers himself at a high intellectual ground and is insulting for others to say the least.

from:  Alok Srivastava
Posted on: Sep 6, 2013 at 06:44 IST

The question really is: Should India go for the highest rate of growth in the near future or should it spend more on education and public health and rely on the benefits of broader education and better health to accelerate economic growth? Bhagavati favours the former approach as, in a situation such as India faces - shortage of resources - it makes more sense in the immediate future to raise as uch resources as possible and, after reaching a reasonable level, focus on broadening education and improving public health. Sen's emphasis on education and health as paths to economic development on the lines of totalitarian China when it was quite free from corruption is not feasible in democratic but corruption-filled India, where even now a good portion of the budgeted funds for rural education and health services ends up in the pockets of corrupt politicians. If Sen does not know the ground realities in India, one can only pity him. Also the China path is no longer available to India.

from:  M. Parthasarathi
Posted on: Sep 6, 2013 at 05:47 IST

Very good and accurate analysis! Thanks.

from:  Kumar
Posted on: Sep 6, 2013 at 05:35 IST

The author and people of his leftist ilk should remember the following: Endless repetition of confused — and false — attributions cannot alter the nature of the real questions that have to be faced. The author is trying to generate a controversy when there should be none. What is the real question? How can you have resources for health and education if you do not have growth. Growth has to come first and then distribution of the larger pie that becomes available due to growth. Sen is a leftist and focuses on distribution so like a good Bengali intellectual, he would rather have everyone equal although poor. It seems the author is of the same philosophy.

from:  Confusion Killer
Posted on: Sep 6, 2013 at 03:50 IST

Great article. Thank you for categorically highlighting Sen's views on
pertinent issues. Shoddy journalism and reportage by competitors, along
with ad-hominem attacks by Bhagwati and other lobbyists have degraded
the substantial body of logical and morally significant work that Sen is
behind.

from:  Umang P
Posted on: Sep 6, 2013 at 02:47 IST
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