Inequality Reexamined (Amartya Sen) - book review


Sen begins Inequality Reexamined by arguing that equality plays a key role in all political philosophies of any consequence. Even those that are commonly perceived as anti-egalitarian advocate equality in some "space" — libertarianism advocates equality of libertarian rights, for example, while utilitarianism assigns equal weight to individual utilities. (As a result of human diversity, equality in any one domain implies inequalities in others.) Sen himself advocates an approach based on 'capabilities' — freedoms to achieve 'functionings', or 'beings and doings' constitutive of well-being. Having introduced this, he goes on to tease out some of the complexities in the relationship between freedom, agency, and well-being. The second half of Inequality Reexamined applies these ideas to various substantive topics: conceptions of justice (in particular that of Rawls); measures of inequality and their use in welfare economics; quantitative measures of poverty; and, briefly, class, gender, and regional inequalities.

With forty five pages of references and dense footnoting, Inequality Reexamined is very much an academic monograph — and one unlikely to be read outside a restricted area of academia. This is not because of its mathematical sophistication (references to partial orderings and Gini coefficients are only incidental) but because of its philosophical abstruseness. Its core is solid logico-linguistic analysis and, despite Sen's attempts to connect this with practical issues, readers unattracted by such analysis are unlikely to find Inequality Reexamined at all appealing. While I think it is a valuable achievement, in some ways it is a dead end — I doubt much (more) can be done in this area at this level of abstraction.

Acknowledgment: thanks to Robbie Gates for putting my first book review token to such good use.

October 1996

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Related reviews: - Amartya Sen - Development as Freedom - books about economics + finance - books about philosophy - books about social justice - books published by Oxford University Press





Internet & Democracy Blog » Book Review: “Development as Freedom” by Amartya Sen


What is a developed country? According to Sen, development should be measured by how much freedom a country has since without freedom people cannot make the choices that allow them to help themselves and others. He defines freedom as an interdependent bundle of:

1) political freedom and civil rights,

2) economic freedom including opportunities to get credit,

3) social opportunities: arrangements for health care, education, and other social services,

4) transparency guarantees, by which Sen means interactions with others, including the government, are characterized by a mutual understanding of what is offered and what to expect,

5) protective security, in which Sen includes unemployment benefits, famine and emergency relief, and general safety nets.

Respect for Local Decisions

By defining the level of development by how much the country has, Sen largely sidesteps a value judgment of what it means specifically to be a developed country – this isn’t the usual laundry list of Western institutions. It’s a bold statement – he gives the example of a hypothetical community deciding whether to disband their current traditions and increase lifespans. Sen states he would leave it up to the community and if they decide on shorter lifespans, in the full-freedom environment he imagines, this is perfectly consistent with the action of a fully developed country (although Sen doesn’t think anyone should have to chose between life and death – this is the reason for freedom 3). This also is an example of the inherent interrelatedness of Sen’s five freedoms – the community requires political freedom to discuss the issues, come to a conclusion and have it seen as legitimate, with social opportunities and education for people to engage in such a discussion.

Crucial Interrelatedness of the Freedoms

Sen is quite adamant that these five freedoms be implemented together and he makes an explicit case against the “Lee Thesis” – that economic growth must be secured in a developing country before other rights (such as political and civil rights) are granted. This is an important question among developing countries who see Singapore’s success as the model to follow. Sen notes that it is an unsettled empirical question whether or not authoritarian regimes produce greater economic growth, but he argues two points: that people’s welfare can be addressed best through a more democratic system (for which he sees education, health, security as requisite) since people are able to bring their needs to the fore; and that democratic accountability provides incentives for leaders to deal with issues of broad impact such as famines or natural catastrophes. His main example of the second point is that there has never been a famine under a democratic regime – it is not clear to me that this isn’t due to reasons other than the incentives of elected leaders (such as greater economic liberty), but whether or not there is a correlation is something the data can tell. Sen notes that democracies provide protective security and transparency (freedoms four and five) and this is a mechanism through which to avert things like the Asian currency crisis of 1997. Democratic governments also have issues with transparency but this seems to me an example of how democracy avoids really bad decisions even though it might not make the optimal choices. Danny Hillis explained why this is the case in his article How Democracy Works .

Choosing not to Choose (Revisited)

Sen reasons that since no tradition of suppressing individual communication exists, this freedom as not open to removal via community consensus. Sen also seems to assume that people won’t vote away their right to vote. He doesn’t deal with this possibility explicitly but this is what Lee Kuan Yew was afraid of – communists gaining power and being able to implement an authoritarian communist regime. Sen’s book was written in 1999 and doesn’t mention Islam or development in the Middle Eastern context, so he never grapples with the issues like the rise of Shari’a Law in developing countries such as Somalia. I blogged about the paradox of voting out democracy in Choosing not to Choose in the context of the proposed repeal of the ban on headscarves in Turkish universities and the removal of the Union of Islamic Courts (UIC) in Somalia in 2006. I suspect Sen’s prescription in Turkey would be to let the local government decide on the legality of headscarves in universities (thus the ban would be repealed), and implement all five forms of freedom in Somalia and thus explicitly reject an authority like the UIC.

The Internet

Sen doesn’t mention the internet but what is fascinating is that communication technologies are accelerating the adoption of at least some of Sen’s 5 freedoms, particularly where the internet is creating a new mechanism for free speech and political liberty that is nontrivial for governments to control. The internet seems poised to grant such rights directly, and can indirectly bring improvements to positive rights such as education and transparency (see for example MAPLight.org and The Transparent Federal Budget Project ). Effective mechanisms for voices to be heard and issues to be raised are implicit in Sen’s analysis.

What Exactly is Sen Suggesting We Measure?

Sen subjects his proposed path to development, immediately maximizing the amount of freedoms 1 through 5, to some empirical scrutiny throughout the text but he doesn’t touch on how exactly to measure how far freedom has progressed. He suggests longevity, health care, education are important factors and I assume he would include freedom of speech, openness of the media, security, and government corruption metrics but these are notoriously hard to define and measure (and measuring longevity actually runs counter to Sen’s example of the hypothetical community above… but Sen strongly rejects the argument that local culture can permit abridgment of any of his 5 freedoms, particularly the notion that some cultures are simply suited to authoritarian rule). The World Bank compiles a statistical measurement of the rule of law, corruption, freedom of speech and others, that gets close to some of the components in Sen’s definition of freedom. This also opens the question of what is appropriate to measure when defining freedom. And whether it is possible to have meaningful metrics for concepts like the rule of law or democracy.

Sen eschews two common ways of thinking about development: 1) that aid goes to passive recipients and 2) that increasing wealth is the primary means by which development occurs. His motivation seems to come from a deep respect for subjective valuation: the individual’s autonomy and responsibility in decision making.

Crossposted in Victoria Stodden

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Amartya Sen's Development as Freedom: Ten Years Later - Policy & Practice - A Development Education Review


Denis O'Hearn

Amartya Sen’s Development as Freedom has been widely praised as a way forward for a more humane society since it was published a decade ago in 1999, the year after its author won the Bank of Sweden prize in economics (otherwise known as the Nobel Prize for economics). To many, it is the standard for ethical economics, so much so that one critic laments ‘until now the issue of ethics and economics, especially in the context of development, has been dominated by Amartya Sen, almost to the extent of being a one-man show with supporting acts’ (Fine, 2004). Kofi Annan says of Amartya Sen that ‘the world's poor and dispossessed could have no more articulate or insightful a champion’. It has almost reached the point where criticizing Amartya Sen, like Mother Theresa, is out of bounds. In this critical assessment of Sen’s much lauded book, Denis O’Hearn considers its central thesis and impact on development.

The argument

Sen’s thesis is simple. Freedom is both the primary end and the principal means of development. Insofar as many of us have been critical of approaches to development that emphasize growth in Gross Domestic Product (GDP), rising personal incomes, industrialization, technological advance, or social modernization, we should be glad that such a distinguished economist is apparently tooting our horn. Yet there are deeply troubling elements in Sen’s basic assumptions about the nature of people and his lack of a feasible prescription for reaching his stated goals that make Development as Freedom not just misguided but even rather dangerous.

Sen gives two reasons why freedom should be the primary element of development: first, the only acceptable evaluation of human progress is primarily and ultimately enhancement of freedom; second, the achievement of development is dependent on the free agency of people. Many people will agree with the first assertion, as long as the definition of freedom is wide enough to include freedom from material or spiritual want, which it does for Sen. The second assertion is more controversial within mainstream economics and popular discourse: the reason usually given by economists to cut back on public expenditures, including education, housing, healthcare and social welfare, is that poor economies cannot afford such expenditures and that development (in terms of economic growth) must happen first and only then can societies afford to look after the social welfare of their people (for a classic version of this ‘stage’ thesis, see Rostow, 1960). Sen breaks with this orthodoxy, providing evidence that high incomes do not necessarily lead to wellbeing (for instance, in terms of life expectancy), and arguing that welfare expenditures can be a spur to rather than a drain on economic growth, especially since they are labor-intensive and since labor is so cheap in poor countries. Thus, he argues against the ‘Lee Thesis’, named for President Lee Kuan Yew of Singapore, which states that denying political and civil rights is acceptable if it promotes economic development and the general wealth of the population (Sen, 1999:15). He rightly insists that we should approach political freedoms and civil rights not through the means of eventually achieving them (GDP growth) but as a direct good in their own right. Freedom is also good because it creates growth.

Sen mentions five distinct freedoms: political freedoms, economic facilities, social opportunities, transparency guarantees, and protective security. Freedom, he says, is a principle determinant of individual initiative and social effectiveness; it is good primarily because it enhances the ability of individuals to help themselves, a property that Sen describes as the ‘agency aspecy’ of the individual (Sen, 1999:19). Thus, his definition of poverty is individual: it is the deprivation of basic capabilities, always defined as individual capabilities. Having stated the prerequisites of freedom and capability in individual terms, Sen never attempts to derive the social origins of ethics, or their historical or cultural specificity, or the ways in which some kinds of capability may be socially organized rather than just a sum of individual capacities. Social capabilities are derived from individual ones and, although Sen recognizes a need for social institutions, it is only to buttress individual freedoms that may be suppressed by imperfections of capitalism that arise from wrong-headed approaches to development. . In echoing the political economist Adam Smith, Sen sees social institutions as having a limited role as you cannot replace individual responsibility by social regulation: ‘there is no substitute for individual responsibility’ (Sen, 1999:283). Unemployment is bad because of its ‘far-reaching debilitating effects on individual freedom, initiative, and skills’ (ibid. :21).

Sen thus asserts the positive role of the market and opposes regulations that impede the freedom of people to decide where to work, what to produce, and what to consume. In his argument for economic freedom, he oddly cites Marx, saying that his support for the end of bondage and use of terms such as ‘free labor’ meant that Marx was an advocate of capitalist freedoms. His conception of democracy is limited to pluralist or electoral democracy, without knowledge of critiques of the exercise of power within pluralism (Lukes, 1974) or conception of alternative models of democracy such as confederalism (see Bookchin, 1989).

The center of Sen’s vision is what he calls a ‘capability approach’, where the basic concern of human development is ‘our capability to lead the kind of lives we have reason to value’, rather than the usual concentration on rising GDP, technical progress, or industrialization (Sen, 1999:285). His approach ‘inescapably focuses on the agency and judgment of individuals’ (ibid. :288) including their capability, responsibility, and opportunity. Raising human capability is good because it improves: the choices, wellbeing, and freedom of people; their role in influencing social change; and their role in influencing economic production.

He painstakingly distinguishes human capability from human capital. Human capital is important, as it refers to the agency of people in augmenting production possibilities. Yet human capability is more important because it refers to the substantive freedom of people to lead the lives they have reason to value and to enhance the real choices they have. Education, for example, is crucial beyond its role in production; its most important role being that of increasing human capability and therefore choice. Again, Sen cites Adam Smith who links productive abilities to lifestyles to education and training, and presumes the improvability of each. While the popularity of the concept of human capital is for Sen ‘certainly an enriching move’, it needs supplementation by an approach that takes human capability as its central concern.

Another side to Sen?

The apparently progressive and humane aspects of Sen’s thesis are outweighed, fatally I believe, by several problems: individualism, microeconomic foundations to the exclusion of macroeconomics, localism, and lack of historical understanding. For a supposedly progressive analysis, Sen’s sources of inspiration are rather strange. Most frequently quoted is Adam Smith, particularly on the subject of freedom to engage in exchange and transaction as a basic liberty but also in his defenses of the state’s limited role in certain aspects of general social welfare and his concern with ‘necessities’ and ‘conditions of living’. Also quoted as champions of freedom are: Aristotle, for his focus on ‘flourishing’ and ‘capacity’; Montesquieu and James Stuart, for their invocation of interest as a bulwark against despotism; and Friedrich Hayek, for championing liberties and freedoms as a foundation of economic progress. In the end, Sen is ultimately revealed as a champion of capitalism with good values such as transparency, where people can be trusted to do what they say they will do, and good behavioral ethics.

It is unsurprising that Sen should invoke Hayek in such a positive light, for his economics while humane are almost entirely centred on the individual, and he usually cites freedom in the context of ‘individual freedom’, saying that the most important aspect of freedom is its ‘opportunity aspect…the extent to which people have the opportunity to achieve outcomes that they value and have reason to value’ (Sen, 1999:291). Essentially, then, Sen proposes that development is driven by capitalism laced with good values: transparency, where folks can be trusted to do what they say they will do, decent behavioral ethics, etc. (ibid. :262). Yet he provides no theory of where such ethics originate, apart from the apparent righteousness of arguments like his own about the superiority of being good and trustworthy. In capitalism, as we have been shown time and again, reasoned argument is simply not enough.

His ‘entitlement’ and ‘capability’ approaches are individualistic in methodology, derived from microeconomics and generalized by adding problems of access to non-market-related entitlements. As Ben Fine (2004) says, Sen’s conception of development boils down to ‘what can I get from what I have, given the conditions for transforming one to the other?’ It is ‘profoundly neutral’ with respect both to underlying social relations and the historical specificity of unequal entitlements. His is a quite Eurocentric understanding of equity that goes back to Hobbes’ seventeenth century definition of equal insecurity and equal subordination to the market. Although Sen explains that his conception of ethics sprang from a racist murder of a Muslim that he witnessed in Bangladesh during his youth, it is surprising that his understanding of ethics and economic man is so resolutely Western. However, Fine suggests that this may be explained by his Cambridge economics training and by the degree to which economics as a discipline and way of thinking has colonized the other social sciences.

What is most surprising about Sen’s analysis, given his subject is development among the less wealthy regions of the world, is the absence of a theory of global capitalism. Indeed, he ignores problems of unequal trade, including disadvantageous international divisions of labor, the exercise of global power and the behavior of International Financial Institutions (IFIs).

Sen’s lack of historical or global consideration is most apparent in his analysis of famine, which he provides as the major reason why freedom must accompany development. Economic security, he insists, derives from freedom. ‘It is not surprising’, he says, ‘that no famine has ever taken place in the history of the world in a functioning democracy’ (ibid. :16). Rather, famines tend to occur in one-party governments and military dictatorships and colonies ruled from elsewhere. Economic security is one of the ‘advantages of democratic pluralism’. Or, again, ‘a society that allows famines to occur when prevention is possible is unjust in a clearly significant way’. Societies need to identify ‘patent injustices’ (ibid. :287). This begs the question, what is a ‘society’? For Sen society simply appears to be the nation state, or state governments within a federal system, with no conception of how ‘patent injustices’ may arise because of and be reproduced by world-systemic processes and interrelations.

Obviously Sen has either not read or simply decided to ignore the role of the West and global processes in causing famine. In his book, Victorian Holocausts , Mike Davis makes a compelling case that the third world was created by famine, which was a tool both invented and used by Western colonial powers to move people off of the land and enable the institution of private property and excessive rents. Thus, in his consistent effort to place all economic consequences in the hands of individuals (who have more or less capability), and their governments (which enable or not), Sen fails to consider that the best of pluralist parliaments face world economic processes and powers over which they have little or no control. The West has enjoyed pluralist democracy (which, by the way, is no utopia) in many cases because the rest of the world starved.

Conclusion: Sen today?

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