Charge of the unenlightened brigade

A.K. Shiva Kumar
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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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