The Nobel Prize

Amartya K. Sen (b. 1933)

Amartya Sen was born on a university campus in Santiniketan, near Calcutta, India, in 1933. He comes from an academic family – his father taught chemistry at Dhaka University (now the capital of Bangladesh) – and his maternal grandfather was a teacher of Sanskrit and Indian cultural history. Sen says of himself that he has ‘not had any serious non-academic job’ (Nobel Foundation, 2004).

Although he spent time in Dhaka and Burma as a child, Sen’s formative schooling took place in Santiniketan at Visva-Bharati. He remembers that the school had the virtuous emphases of ‘fostering curiosity’ and embracing cultural diversity; and this at a time when India itself was about to descend into a period of sectarian-based communal violence. Sen relates events around the murder of a Muslim man that he witnessed in his family’s predominantly Hindu neighbourhood. The man had simply been looking for work but the search cost him his life. The experience for Sen was ‘devastating’ but it also made him think about the risks that extreme poverty – a form of ‘economic unfreedom’ – can force people to take (Nobel Foundation, 2004). As a nine-year-old, Sen was exposed at first hand to the ‘harrowing scenes’ of the Bengal famine, in which he later estimated almost three million people died. In response to a question about how he became interested in economics, Sen once replied, ‘For someone from India, it is not a difficult question to answer. The economic problems engulf us’ (Klamer, 1989, p. 136).

Sen’s higher education began at Presidency College in Calcutta in 1951. Although he had originally planned to study physics he switched to economics because it ‘seemed not only useful and challenging, but also more fun’ (Pressman and Summerfield, 2000; Klamer, 1989, p. 136). Sen cites the additional attraction of ‘outstanding’ teaching and stimulating fellow students. Crediting others for the intellectual environment he has clearly enjoyed and in which he has flourished is a consistent theme in Sen’s reflections on his career.

There was a current of left-leaning political activism among the students at Presidency College with which Sen sympathised. This tended to reflect the kinds of economic and social problems in India that he and his friends had grown up observing. He recalls that ‘Calcutta itself, despite its immensely rich intellectual and cultural life, provided many constant reminders of the proximity of unbearable economic misery’ (Nobel Foundation, 2004). Sen’s politics could not find expression in any direct party affiliation as the available groupings – although they expressed laudable commitments to equity and solidarity with the poor – tended to be less tolerant of democratic values. This kind of perspective clashed with the importance, for Sen, of plurality in a culturally diverse society – something he had learned first at school in Santiniketan. Although Sen chose not to embrace conventional political activism, his contribution to economics was to become possessed of a notable ethical underpinning, something specifically recognised in his Nobel citation and which Sen traces directly to the ‘concerns that were agitating me most in my undergraduate days in Calcutta’ (Nobel Foundation, 2004).

 Sen graduated from Calcutta University in 1953 with a BA in economics (major) and mathematics (minor) and moved to Trinity College at the University of Cambridge, UK. Here he enrolled on another BA degree, this time in pure economics, which he completed in 1955. Sen remained in Cambridge for his PhD, which he was awarded in 1959. His thesis supervisor was ‘the totally brilliant but vigorously intolerant’ Joan Robinson.21 After conducting his programme of research for only a year, Sen, as he says now, ‘was bumptious enough’ to conclude that he had results that could form a thesis but Cambridge’s regulations stipulated that he could not submit for three years. To fill in the time, Sen was granted leave to return to Calcutta, where – at the age of 22 – he was appointed to a chair in economics at the new Jadavpur University and asked to establish a new economics department. This was the beginning of a distinguished academic career.

Sen worked at Jadavpur between 1956 and 1958, before he returning to Cambridge where he had been elected to a prize fellowship at Trinity College. He used the fellowship to embark on the study of philosophy, a discipline in which he has since published widely and which has greatly informed his work in economics (see Arrow, 1999). In 1963 Sen was appointed Professor of Economics at Delhi University in India. He moved back to the UK in 1971, taking up the post of Professor of Economics at the London School of Economics. In 1977 Sen moved to Oxford University, first as Professor of Economics and then, from 1981, as Drummond Professor of Political Economy and Fellow of All Souls College. In 1987 he left the UK for the USA to become Lamont University Professor at Harvard University. He is presently Master of Trinity College, Cambridge, a post held since 1998.

Sen’s awards and distinctions include foreign honorary membership of the American Academy of Arts and Sciences. He has been president of each of the Development Studies Association (1982), the Econometric Society (1984), the International Economic Association (1986–89), the Indian Economic Association (1989) and the American Economic Association (1994). He is a past winner of the Mahalanobis Prize (1976), a lifetime achievement award by the Indian government, and in 2000 he became the first ever honorary president of Oxfam. In 1998 Sen was awarded the Nobel Memorial Prize in Economics ‘for his contributions to welfare economics’ (Nobel Foundation, 2004).

Sen’s interest in welfare economics was hugely stimulated by his reading Kenneth Arrow’s ‘path-breaking study of social choice’, Social Choice and Individual Values (Arrow, 1951).22 The book introduced Sen to Arrow’s ‘stunning “impossibility theorem”’ the implication of which is that, in Sen’s words, ‘no non-dictatorial social choice mechanism may yield consistent social decisions’ (Nobel Foundation, 2004). For Sen, in a Calcutta riven by inequality, this was an intellectual exploration of the kind of political questions he had been struggling to come to terms with. For example, did the impossibility theorem justify authoritarianism if it permitted some kind of consistent social calculus?

The fundamental problem for welfare economics that Arrow had highlighted was that there was no way to consistently aggregate the preferences of individuals in a society such that unambiguous improvements in social welfare may be consistently reached. This is because there is no method of making interpersonal comparisons of the well-being of different individuals; we simply cannot measure personal utility and therefore, for Arrow, ‘interpersonal comparison of utilities has no meaning’ (quoted in Sen, 1999, pp. 353–6). This leaves economics with, in Sen’s view, the rather limited Pareto criterion for making social decisions. His dissatisfaction with Pareto optimality arises because it ‘takes no interest whatever in distributional issues, which cannot be addressed without considering conflicts of interest and of preferences’ (ibid., p. 352, emphasis in original). It appears then that Arrow’s work has an unfortunate and pessimistic implication: the impossibility of social choice beyond Pareto. But, as Sen reflects in his Nobel lecture, this is not the only construction that can be placed on Arrow; the impossibility theorem can and should be read as something that ‘invites engagement rather than resignation’ (ibid., p. 365; see also Sen, 1970a – a particularly influential contribution according to his Nobel citation). One of Sen’s central achievements in economics has been to address the ‘impossibility’ agenda and to suggest a way forward beyond it; indeed Arrow has characterised Sen as the ‘outstanding contributor’ to the voluminous literature that has arisen from his own paradigmatic contribution (Arrow, 1999).

Sen’s breakthrough was to clarify the theoretical basis for interpersonal comparability and to suggest how the informational base for such comparability may be widened (see Sen, 1999; Arrow, 1999; Atkinson, 1999). In respect of the former consider the following powerful example:

We may … have no great difficulty in accepting that Emperor Nero’s utility gain from the burning of Rome was smaller than the sum-total of the utility loss of all the other Romans who suffered in the fire. But this does not require us to feel confident that we can put everyone’s utilities in an exact one-to-one correspondence with each other. (Sen, 1999, p. 356)

Sen argues that such ‘partial comparability’ provides a basis for social decision making that opens up a richer terrain than that allowed by the alternative Pareto criterion. But he goes further: ‘The Pareto principle (i) lists a set of virtues, and (ii) uses dominance of virtues as a criterion. What is in dispute here is the former, not the latter’ (Sen, quoted in Atkinson, 1999, p. 177). Sen is arguing that social decisions can indeed be made on the basis of partial comparability – we can be content that Rome was socially impoverished by the fire (the dominance of the utility loss of Roman citizens over Nero’s gain) – but he is also clear that the set of ‘virtues’ upon which comparabilities conventionally rest is open to question.

Welfare economics focuses upon the individual consumption of goods and services: this is how the Pareto criterion judges whether or not there can be an unambiguous improvement in social welfare. But Sen has argued that a person’s capabilities – what they can be and accomplish – primarily conditions their well-being: individual progress does not reduce to simply increasing the volume of things that can be bought and consumed (Sen, 1982; 1985; 1987; 1999; Sen and Nussbaum, 1993). Capabilities encompass such factors as a person’s expectancy of life and health, their education ‘and the freedom they have to choose the kind of life they have reason to value’ (Nobel Foundation, 2004). This kind of approach to wellbeing has seen practical application with Sen’s involvement in the construction of the United Nations Development Programme’s Human Development Index. This measures a country’s development in terms of GDP per capita and by reference to literacy and life expectancy; the last two categories are a direct acknowledgement of the significance of capabilities in achieving social progress.

Sen’s Nobel citation makes reference to his work on the measurement of poverty (see Sen, 1976; 1982). Sen has been critical of the traditional ‘headcount’ measure of poverty that simply notes the proportion of a population below a given poverty line (for example, the number of people subsisting on less than a dollar a day). His objection is that the headcount approach is insensitive to the severity of poverty: are people a little way or far below the line? Sen proposed an alternative poverty index which takes into account both the number of people in poverty and how poor they are, with a greater weighting attached to the very poor.

Partly with Jean Drèze, Sen has made important contributions to work on the causation and prevention of famines (Sen, 1981; Drèze and Sen, 1989). He has demonstrated, in the context of a number of catastrophic events, that the common assumption of food shortage as a central causal factor in famine may be misplaced: ‘famines can occur even without any major decline – possibly without any decline at all – of food production or supply’ (Sen, 1999, p. 361, emphasis in original). Instead, the problem generally lies in the distribution of food. Natural events may deprive particular groups of income and the problem then becomes not the supply of food but the absence of an income-based entitlement to it. Sen argues that the 1943 Bengal famine that he witnessed as a child happened because floods deprived wage earners of income.

Sen’s other notable contributions to economics include his attempt to demonstrate that the notion of utility maximisation in the context of Pareto optimality conflicts with the liberal tradition that individuals should be free to do as they wish on the understanding that they should not prevent others from doing the same (Sen, 1970b). Finally, in his famous ‘Rational Fools’ paper, Sen has offered a critique of the traditional interpretation of rationality in economics (Sen, 1977).

Main Published Works
(1970a), Collective Choice and Social Welfare, San Francisco: Holden Day.
(1970b), ‘The Impossibility of a Paretian Liberal’, Journal of Political Economy, 78, January– February, pp. 152–7.
(1976), ‘Poverty: An Ordinal Approach to Measurement’, Econometrica, 44, March, pp. 219– 31.
(1977), ‘Rational Fools: A Critique of the Behavioural Foundations of Economic Theory’, Philosophy and Public Affairs, 6 (4), pp. 317–44.
(1981), Poverty and Famines: An Essay on Entitlement and Deprivation, Oxford: Clarendon Press.
(1982), Choice, Welfare and Measurement, Oxford: Basil Blackwell.
(1985), Commodities and Capabilities, Amsterdam: North-Holland.
(1987), The Standard of Living (Tanner Lectures, ed. G. Hawthorne), Cambridge: Cambridge University Press.
(1989), Hunger and Public Action (with J. Drèze), Oxford: Clarendon Press.
(1993), Quality of Life (ed. with M. Nussbaum), Oxford: Clarendon Press.
(1999), ‘The Possibility of Social Choice’, American Economic Review, 89, June, pp. 349–78.

Secondary Literature
Arrow, K.J. (1951), Social Choice and Individual Values, New York: Wiley. AMARTYA SEN 272
Arrow, K.J. (1999), ‘Amartya K. Sen’s Contribution to the Study of Welfare’, Scandinavian Journal of Economics, 101 (2), pp. 163–72.
Atkinson, A.B. (1999), ‘The Contributions of Amartya Sen to Welfare Economics’, Scandinavian Journal of Economics, 101 (2), pp. 173–90.
Klamer, A. (1989), ‘A Conversation with Amartya Sen’, Journal of Economic Perspectives, 3, Winter, pp. 135–50.
Pressman, S. and G. Summerfield (2000), ‘The Economic Contributions of Amartya Sen’, Review of Political Economy, 12 (1), pp. 89–113.
Post a Comment