Jagdish Bhagwati's attacks on Amartya Sen, Sen's own involvement in political discourse, and their supposed political affinities, have become topics of discussion recently. On one hand, of course, I feel glad that a discussion in this country is happening lead by two of the best intellectuals this country is supposed to have produced. At the same time, the sweeping brushstrokes painting this debate as Sen's Socialism versus Bhagwati's Capitalism, or Sen's Kerala versus Bhagwati's Gujarat, have been rather unfortunate. I have read a bit of what Bhagwati has to say about development themes, and am beginning to understand Sen's views. With that caveat, I would like to try to show that this debate is nowhere as sharp as it is being made to be.
Firstly, does either of the economists disagree that growth must benefit the marginal sections of society? No. Sen's views on this aspect are fairly well known. On the other 'side', Bhagwati repeatedly mentions that growth is a means to achieving human development. Moreover, his passionate defense of India's performance on development indicators betrays the centrality of human development in his world view. That Sen would have a lot of intervention in human development is fairly well known. But Bhagwati has discussed at length various methodologies that can be used to improve the standard of living of the people. Bhagwati at no point defends laissez faire or even the now-ridiculed trickle down theory. Hence, there is a commonality of human development as the 'end' in both their arguments.
So what is different? Given my limited reading of both, I have been able to identify two sources of 'discord'. The first is regarding the prioritisation, and the second regarding the implementation. Let me talk about the former first. Laymen have often rejoiced at the growth versus equity debate - and Sen and Bhagwati are seen to be at opposite sides of the spectrum here. But on closer look, the differences do not seem to be all that significant. Sen has merely said that growth (of the kind that India has experienced since 1991) is a great thing, but the lack of an improvement in human development at the same time is shameful. He seems to argue that growth for the sake of growth is immaterial, which I do not believe any sensible person would debate. At no point have I seen Sen argue that India should have grown at a lower pace, and instead redistributed its national income. On the Bhagwati side, he clearly demarcates 'Track I' and 'Track II' reforms. All of his Track II reforms are directly targeted at human development, and even his 'Track I' reforms around economic liberalisation, are supposed to eventually lead to human development. The minor divergence here is the prioritization. Sen would say that equity and human development will eventually lead to growth, whereas Bhagwati would say that growth will generate the necessary resources for equity and development. Neither of them would disagree, I assume, with the fact that growth and development essentially go hand-in-hand. I do not believe there would be any country which focused on any one while ignoring the other.
The second, and apparently more substantial difference, is their view on Government provision of basic services. Here, Bhagwati is distinctively right-wing. He praises the virtues of the private sector in provisioning (with the Government acting as a facilitator), and also suggests replacing the NREGA with cash transfers. I have not read Sen's views on different Government services yet, but on the food subsidy, for example, he openly confesses his lack of knowledge. His support for the food security bill, if at all, is a grudging realisation of no better alternatives. Sen says we need to intervene more effectively in the poor's lives, and if state intervention is the best way to do it, then so be it. For example, Sen extols the virtues of the Bolsa Familia in Brazil, a cash transfer that would be something even Bhagwati would praise.
In conclusion, the differences between these two great economists is not as great as it seems to be. Bhagwati is by no means a capitalist, and Sen is even farther from being a socialist. A welfare state within the structure of capitalism is neither unique nor surprising. We, as readers, can rationalise the debate between two great minds to hone our own understanding of the country we live in.
No comments:
Post a Comment