Resources, Values and Development

"Like Arthur Lewis, but a long time later, Amartya Sen also got the Nobel Prize in development economics. There are many books by him in this area but I chose this one as representative of many of his ideas. It is a collection of the essays he has written over many years so it covers his various interests in this field. He also belongs to the tradition of paying attention to improving the access of the poor. He is very interested in the issues of equity. He also follows the Adam Smith tradition of economics in that he tries to bridge ethics and economics. For many years his appointments have been jointly in departments of economics and philosophy. In development economics he looks at education and health improvements for the poor as well as women’s autonomy and the larger issues of democratic freedom being an integral part of development. No, I don’t think it is wishful thinking. I see it playing out particularly in education and help for the poor. Chinese achievements in this respect have been much better than in India. And this is something that I have looked into in my latest book, Awakening Giants, Feet of Clay: Assessing the Economic Rise of China and India. I find that usual discussions about China emphasise globalisation and market reforms but don’t emphasise the legacy of the earlier period in China when they focused on basic education and basic health for the poor. This earlier groundwork is something that today’s China is deriving the benefit from. I have seen that this didn’t happen in India to the same extent and because of this poverty reduction in India has not been as dramatic as in China. This brings me to an often ignored question of the socialist legacy of emphasising education and health, which Amartya Sen has always been quite emphatic about and the Chinese case has been a good example of that. Well, when I was working on Awakening Giants, Feet of Clay I wasn’t writing for economists but for a general readership. And I wrote it partly out of a slight irritation with all the glowing accounts in the press about India and China. I thought that some of this is correct but some of it is hype and exaggeration. The financial media repeat the same things so often that they become part of conventional wisdom. So I set out to qualify that and challenge some aspects of this wisdom. For example, the dramatic reduction of poverty in China, as I mentioned in connection with Redistribution with Growth, has a lot to do with the redistribution of the land in the early 1980s which enabled peasants to become richer. China moved to something called the household responsibility system, which meant peasants had user rights to lands. Every rural family had an almost equal amount of land which provided a basic floor for their incomes. This was some years before globalisation in China really took off. “I don’t see authoritarianism as necessary or sufficient for development and I think it has distorted the patterns of development.” Everyone thinks globalisation is the reason India and China have been so successful. Of course, that is a part of the reason but not all of it. Similarly—and this is something I have mentioned with my choice of five books—often it is not recognised that China didn’t actually go the whole hog when it came to privatisation and market reforms. They haven’t privatised many of the state-owned companies which are now very important in the world economy. Also, in India there has been some privatisation but not very much. So in that respect the usual orthodoxy—that it is those private ownership rights and market reforms that are the reasons for China and India’s high growth and poverty reduction—is only partly true. Support Five Books Five Books interviews are expensive to produce. If you're enjoying this interview, please support us by donating a small amount . And, finally, there is this other myth, which is propagated by the Chinese leadership and the élite, where the enormous success of China is held up as an example that in the early stages of development authoritarianism, which we have in China, is seen to be necessary and good for helping economic growth. I think this is something that should be challenged. I don’t see authoritarianism as necessary or sufficient for development and I think it has distorted the patterns of development. Suppression of information in China has meant that some of the capitalist excesses that are taking place (relating to the environmental damages, land-grabbing from the poor farmers and violations of product safety and work condition standards) are because of lack of democratic accountability in China. India is much more democratic than China. But, there is still a problem with democratic accountability in India. It works relatively well in upper tiers of government but on a local level there are still problems. For example, if money is given for something like education or health often the local leaders will siphon it off and it won’t reach the people it was intended for. This, for me, is one of the reasons why India hasn’t done as well as China in matters such as education and health. The local élite who run local governments are not taking responsibility for making the projects work. So accountability failures in India are also causing problems. And this is in line with what Amartya Sen says. He emphasises not merely education and health but also the importance of democracy in achieving broad-based development."