Research Paper

Topic: Dr. Amartya Kumar Sen An analysis

Instructor: Professor K. Manzoor Subject: Microeconomics

Name: Saptarshi Datta Student ID: 500 375 961

Abstract A question, prompted by the brutal murder of a mere labourer, shaped the thought of one man - revolutionizing a disregarded branch of economics that would one day change how we see the world (Amartya Sen - Autobiography, 1998). This paper focuses on the life and work of Dr. Amartya Sen whose contribution towards the social choice theory and welfare economics have changed how we view the world today.

Introduction The 1998 Nobel Prize on economics, awarded to Dr. Amartya Kumar Sen signalled a change of guard at the Royal Swedish Academy of Science and helped broaden a relatively disregarded branch of economics welfare economics. Critics were quick to remark that Sen did not deserve the much coveted prize and Royal Academy awarded the prize to Sen only to get over their blunder of awarding the prize to Myron Schles and Robert Merton in 1997, who almost brought down the US financial system in 1998 (Pressman & Summerfield, 2000). Dr. Sen is most commonly credited for his work on poverty, showing how famines can occur in times of times of abundant food supply, how the occurrence of famines is unlikely in a democracy and for his contributions towards welfare economics (Basu, 1999).

Early Life and Education Born in Santiniketan, West Bengal, in the university town set up by the great bard and Nobel laureate Rabindranath Tagore, Sen had the opportunity to learn from the very best in the absence of competitive pressures. After completing his bachelors degree in Economics from Presidency College in Kolkata, Sen went on pursue Economics in Trinity College, Cambridge. At that time Cambridge economists were divided into two groups one which advocated the pros and cons of Keynesian economics and the other consisted of neo classical economists who were sceptical of Keynesian economics. Although Sen did not follow any particular school of thought he was fortunate to have good relations with economists from both sides of the divide which added to insatiable knowledge of economics (Amartya Sen - Autobiography, 1998). In the 1960s Sen went to various renowned universities as a visiting professor. University of Calcutta, MIT, Stanford, Cornell and Berkeley benefitted Sen and broadened his understanding; however, it was only in the Delhi School of Economics for the first time he was able to make immense contributions towards developing the social choice theory (Amartya Sen - Autobiography, 1998). Throughout his entire life Sen has been involved in the academic world. After returning from Delhi in 1972, Sen joined The London School of Economics as professor of economics. Later he moved to University of Oxford assuming the position of Professor of Economics and later the Drummond Professor of Political Economy. Thereafter he joined the Harvard Faculty as the Lamont University Professor of

Economics and briefly moved to Cambridge before joining Harvard again in 2004. (Amartya Sen - Autobiography, 1998) Currently Dr. Sen has been named Chancellor of Nalanda University Project in Bihar, India (Ahmad, 2012).

Contributions and comparison to Traditional Economics Much of Sens life has been devoted to solving and understanding the economics of the livelihood of the poorest of the poor. He has focused extensively on developing human potential through capability enhancement and studied the role of social relationships in altering the economics of a nation. Furthermore, Sen has tried to provide several solutions to solving real world problems, the Human Development Index being one such example which helps governments improve the quality of life of the people. Development of human potential has always been one of Sens most important priorities which he has stressed extensively. According to traditional economics, growth has been concerned with producing the maximum amount of goods at the minimum cost without regard to all other factors (Pressman & Summerfield, 2000, p.92). Sen (1990c), has been highly critical of this approach arguing that economics should be about developing the capabilities of people by increasing the options available to them. According to Sen (1990c), the number of options available to people is directly linked to human well being. When people get freedom from an oppressive regime their well being increases even though the quality of life in terms of materialistic goods might not

improve. Similarly, consumers who have access to more options among similar goods are better off than with just one good to choose from. Another major aspect of Sens work has been towards understanding how humans behave from an economical perspective. Traditional economics claim that people behave rationally to maximize their utility (Pressman & Summerfield, 2000, p.92). However, Sen (1970b, p.195) believes this is not so as people vote not to maximize their utility but out of commitment - to record their preferences and be a part of the democratic process. Sen (1977e, p.333f) goes even further to conclude that people always dont work the hardest at jobs which provide the highest financial rewards but at jobs where they believe that their work is accomplishing some greater good. Sen (1997g) argues that traditional economics misses some of the key aspects of employment such as social contacts, mental wellbeing besides production of goods. Sen (1977g) then connects real world problems such as high suicide rates, psychological shocks experienced by the unemployed. According to Sen, following the rationality principle where humans try to maximize utility can sometimes lead to absurd results like the Prisoners Dilemma (Sen 1987e, p.80f). Also, traditional economics fails to account for social and interpersonal choices such as sympathy for others and commitments. An example would be helping a person in distress although that would not maximize your utility and would be as loss in traditional economics as the time could have been used better but the satisfaction gained from helping is not taken into account. Traditional economics also fail to take into account the utilities and disutilities that cannot be bought or sold in the market such as memories, a beautiful scenery, pollution and crime(Sen, 1985a).

Other major contributions of Sen have been in the understanding of basic human needs and entitlements. As a child, Sen witnessed the Bengal famine of 1943 which left over 3 million people dead. Since then it had been a goal of Sen to understand the economics of famines and the large loss of life associated with them. Sen, in his research found that famines can occur even in regions of abundant food supply and not necessarily in areas facing a decline in food production and people die because their exchange entitlements have collapsed. (Sen 1981e; Dreze & Sen, 1989) In the Bengal famine of 1943, people died when there were shops stocked with abundant food supplies. This was case with the Irish famine of mid 1800s where potato was exported from Ireland to England, while the Irish people starved to death. In the Bengal famine it was daily landless labourers who faced the most hardships as they could not find work to earn money and buy food. Thus, they could not exchange their labour for food. Sen (Dreze & Sen, 1989) noted that during famines it is not the middle class that struggles to survive but people who are further down the economic ladder who are hurt the most. Furthermore, Sen also noted that in democracies the occurrence of famines is less likely as there is going to hue and cry among the people and the governments performance during such times would decide their fate during the elections (Sen 1981e; Dreze & Sen, 1989). Sen has been active in trying to understand and help governments eradicate poverty. The term poverty is subjective and has been traditionally determined by the headcount approach. As an example in the head count approach if $1000 is determined as the poverty line, anyone earning less than $1000 is determined to be in poverty and anyone earning above is not. Sen has been extremely critical of this approach as he

believes income is not a good indicator of poverty. He argues that if there are two people below the poverty line, one earning $990 and the other earning $250, governments trying to reduce poverty could take $20 from the poorer person and give it to the relatively poor person while claiming that their action has reduced poverty by 50%. According to Sen (1976c), poverty is a relative measure and any action basing the head count measure might not reach the most affected people. To help nations in addressing their long term development goals, Sen has been instrumental in the introduction of the Human Development Index (HDI) which he worked on with several of the worlds leading economists. The HDI ranking not only help nations focus on traditional economic growth but also takes into account factors which are likely to affect the long term real economic growth of the nation such as education, life expectancy, pollution and environment. Sens contribution did not stop only with his work on famines and poverty but went on to include issues such as discrimination of women, inequality, freedom and justice. Even now Dr. Sen has been contributing in various ways to benefit the poor and help nations develop themselves.

Current application of ideas and Criticisms Sen has made numerous contributions to the field of developmental economics which are still in use by various governmental agencies and economists alike. One such example has been Sens attempt to measure poverty. Although, Sen has been criticized for being a theorist and not coming up with a way to measure relative poverty,

countries have been slowly shying away from solely relying on the head count approach to address the issue of poverty. Other contributions of Sen, which has garnered much international focus has been the development of human capabilities rather than focusing on economic growth (1985a). Although Sens capability approach has faced much debate on what human capabilities to develop and governments arguing that economic development will create capability development, it has been recognized that there is such a need for the development of the nation. Sen (1990f) has also been instrumental in showing how gender plays a role in entitlement of various resources within the family structure of some communities, which has prompted empowerment movements geared towards womens rights and liberties. Other ideas of Sen, which has seen practical applications, have been his work on famines and the development of the Human Development Index. Today during famines governments and other relief organizations focus more on the supply chain as soon as they establish adequate quantities of food and other necessary resources. Although HDI has been severely criticized by economists for falling short of its true intention to measure the well being of the people in different nations it has been embraced by the United Nations. Furthermore, Sen has developed various tools to measure qualities such as poverty and inequality which are in use in some form or another (1976c). Although Sen has changed how we view the world today, economists have criticized Sen for not taking into account real world factors such as international relations, politics and war. Sen has been criticized by governments and right wing

activists for being leftist. Even after receiving the nobel prize on economics Sen has been criticized as a person who should not deserve the prize and was only awarded because of the Swedish Academys blunder the previous year in awarding the prize to two men who almost crashed the US financial system. One person who has come down hard on Sen was Pollack. Even the international press did not spare him from criticism.

Conclusion Sen has forever changed the subject of economics. When traditional economics was concerned with industrialization as the main growth factor, Sen gave primary importance to development of human capabilities and social well being. Although Sen has been criticized for ignoring some effects of globalization in his theories, he gave an economic meaning to real world factors such as justice, equality and freedom which other economists did not dare to tread. Despite his path breaking work on famines and poverty which have shot Sen into the spotlight, he still leads a humble life trying to solve many of the biggest economic challenges faced by developing world. If Sen had any regrets it would be his failure to arrive at an absolute conclusion to the problem of poverty. Today, inspired by Sens work a new breed of developmental economists has risen to the challenge to forge a new future based on hope - the hope that Sen envisioned - the hope of giving people a chance to lead life without regrets, a life full of choices.

References Ahmad, F. (July 20, 2012). Amartya Sen named Nalanda University chancellor. The Times Of India. Retrieved July 20, 2012 from http://articles.timesofindia.indiatimes.com/2012-07-0/news/32763124_1_nalandauniversity-board-members-george-yeo Amartya Sen - Autobiography. (n.d.).Nobelprize.org. Retrieved June 28, 2012, from http://www.nobelprize.org/nobel_prizes/economics/laureates/1998/senautobio.html Basu, K. (1999). Amartya Sen, economics Nobel Laureate 1998.Challenge, 42(2), 4151. Retrieved June 28,2012, from the ProQuest database. Dreze, J. & Sen, A.K. (1989) Hunger and Public Action (Oxford, Clarendon Press) Sen, A.K. (1970b) Collective Choice and Social Welfare (San Francisco, Holden Day) Sen, A.K. (1976c) Poverty: an ordinal approach to measurement, Econometrica, 44 (2), pp. 219-231 Sen, A.K. (1977e) Rational Fools: A critique of the behavioural foundations of economic theory, Philosophy and Public Affairs, 6 (4), pp. 317-344 Sen, A.K. (1977g) Starvation and exchange entitlements: a general approach and its application to the Great Bengal Famine, Cambridge Journal of Economics, 1 (1), pp. 33-59 Sen, A.K. (1981e) Poverty and Famines: an essay on entitlement and depression (Oxford, Oxford Economics and Statistics, 43, pp. 287-319) Sen, A.K. (1985a) Commodities and Capabilities (Amsterdam, North Holland) Sen, A.K. (1987e) On Ethics and Economics (Oxford & New York, Brasil Blackwell) Sen, A.K. (1990c) Gender and cooperative conflict in: I.Tinker (Ed) Persistent Inequalities (New York, Oxford University Press), pp. 123-149 Sen, A.K. (1990f) More than 100 million women are missing, New York Review of Books, 37(20), pp. 61-66 SummerField, G., & Pressman, S. (2000). The Economic Contributions of Amartya Sen. Review of Political Economy, 12(1), 89. Retrieved July 1, 2012, from the ProQuest database.