The United States National Medal of Arts and Humanities awarded Monday to Nobel Laureate Amartya Sen — the first non-American to be conferred the rare honour — speaks to the universalism of his contributions in economics and philosophy over the past five decades. This has been in evidence, most recently, in the interventions of Sen, Lamont Professor of Philosophy at Harvard University, on the global financial crisis and the consequent economic meltdown. In the immediate aftermath of the 2008 housing and banking collapse, a policy consensus quickly built up in Europe and the U.S. around the adoption of more or less Keynesian stimulus policies to generate employment and productivity. But at the first, premature sign of the global crisis abating, many countries embraced fiscal austerity as the answer to balance their budgets. Professor Sen forcefully articulated his own response to tackling the crisis in the context of calls for the creation of a new capitalism. He pointed out that in all the world's leading industrial economies without exception, the major institutions underpinned by exchanges in the market were sustained and strengthened by innumerable transactions that took place outside the framework of the market. These were the provision of social welfare, pension and unemployment benefits. Citing verse and passage to show that the father of modern economics, Adam Smith, was in fact no champion of unbridled free markets, his point was to emphasise the interdependency among a multitude of institutions as key to well-functioning markets, while also underscoring the serious consequences to the U.S. economy of the removal of New Deal regulations.
Equally noteworthy is Prof. Sen's contribution on the commission headed by Joseph Stiglitz to suggest ways to measure economic performance. Of immense relevance is the point that Gross Domestic Product (GDP) was conceived as a metric originally only to monitor cyclical fluctuations of the market, not to measure societal well-being. Hence, his criticism of the Indian elites for chasing GDP targets over more substantial goals such as universal guarantees of basic health care and education. Prof. Sen's widely celebrated capabilities approach to human empowerment influenced in no small measure the formulation of the United Nations Development Programme's Human Development Index. He has emphasised liberal, plural democracy as the pre-eminent and universal value of the 20th century. Popular struggles such as the Arab Spring are perhaps pointers to the widening reach of democracy into areas hitherto under the grip of authoritarian regimes.
