It is perilous for a lowly hack like me to interject myself in the epic and surprisingly personal fight between two giant economists; one a I-am-a-Nobel laureate-but-so-what? type and the other Can-you-just-give-me-the-damn-Nobel-now-and-quell-my-bile? type.
Amartya Sen and Jagdish Bhagwati are both of Indian origin and both globally respected economists and, as it turns out, can’t stand each other. Reading the massive debate currently on between the 80-year-old Sen and 79-year-old Bhagwati one gets the sense that there are pathologies at work which go deeper than economics. Particularly, when you read Bhagwati’s unvarnished attack on Sen in the Mint newspaper it becomes evident that they are unlikely to kiss and make up anytime soon. Given their ages they do not have time on their side.
The fundamental point of divergence between the two men is over how India can achieve inclusive growth, whether by keeping social empowerment as a key element of the economic policy as advocated by Sen or by letting the free market, unshackled from regulation, generate enough growth to include everyone as argued by Bhagwati. I , of course, simplify but then this is a blog also read by the fans of Savita Bhabhi’s boobs. That necessitates that I keep it simple even though both men have much more complex minds than the media perspectives over their current public disagreements might show.
Bhagwati’s Mint opinion piece, while reflecting on his fundamental disagreement with Sen about economic philosophy, also gets remarkably personal. Contesting Sen’s assertion of his pro-growth credentials, Bhagwati says, those are “much like an anti-Semite would claim that Jews are among his best friends!” (I don’t get the exclamation point but let that pass!- Sarcasm).
Rather than going into their rancor about each other in great detail I have chosen to carry in full the letters written by Bhagwati and Sen castigating each other in The Economist magazine recently.
Being an unapologetic free marketer, Bhagwati is inevitably sanguine about the growth model of my home state of Gujarat which he holds up as “the ideal template” where “people believe in accumulating wealth but they believe also in using it, not for self-indulgence but for social good.” Having been born and grown up in Ahmedabad, the bastion of precisely the kind of people who believe in accumulating wealth and using it for social good, I can tell you that Bhagwati’s characterization is accurate. But then India’s socioeconomic challenges are slightly more than what the altruistic impulses of successful wealth creators might overcome and that’s where Sen’s prescriptions of inclusive growth come into play.
I must say reading both men in the narrow context of the amusing fight, I am not entirely sure what the contention is really about. Bhagwati, popularly perceived to be a diehard advocate of deregulation, strenuously argues his pro-poor work early on. Sen, popularly perceived to be a diehard advocate of inclusive growth, equally strenuously touts his pro-growth work early on.
In the end, like it often does, this economic slugfest boils down to the half-baked media’s silly obsession with controversy and squabbles. At the same time though the rancor between two old men is not entirely imagined. They are both at an age where they are no longer constrained by politeness. So they might as well duke it out. While they do so, they must be careful and not cause each hip fractures.
It is a good thing that economies have a way of operating independent of economists.
The Economist letters below:
Go for growth in India
SIR – We read your review of “An Uncertain Glory”, the latest book on India by Amartya Sen and Jean Drèze (“Beyond bootstraps”, June 29th). The review approvingly cites us as advocating faster growth through labour and land market reforms to cut poverty yet more deeply and to generate more revenues for social programmes. But your claim that Messrs Sen and Drèze wish to go “much further” leaves us puzzled.
The truth of the matter is that Mr Sen has belatedly learned to give lip service to growth, which he has long excoriated as a fetish. He did not explicitly advocate any pro-growth policies, such as opening India to trade and to direct foreign investment, in practice before or after the 1991 reforms. Nor does he recognise that significant redistribution to the poor without growth is not a feasible policy.
Instead he continues to assert that redistribution has led to rapid growth in Asia, a proposition that has no basis in reality and puts the cart before the horse. Growth has made redistribution feasible, not the other way round.
Professors of economics
SIR – In complaining about your generous review of “An Uncertain Glory”, which I wrote with Jean Drèze, Jagdish Bhagwati and Arvind Panagariya have misdescribed my past work as well as the book itself (Letters, July 13th). I have resisted responding to Mr Bhagwati’s persistent, and unilateral, attacks in the past, but this outrageous distortion needs correction.
Their letter says that, “Mr Sen has belatedly learned to give lip service to growth.” On the contrary, the importance of economic growth as a means— not an end—has been one of the themes even in my earliest writings (including “Choice of Techniques” in 1960 and “Growth Economics” in 1970). The power of growth-mediated security outlined in another book I co-authored with Mr Drèze in 1989, “Hunger and Public Action”, is a big theme in the present book.
Economic growth is very important as a means for bettering people’s lives, but “to go much further, faster” (as your reviewer commented) it has to be combined with devoting resources to remove illiteracy, ill health, undernutrition and other deprivations. This is not to be confused with mere “redistribution” of incomes, on which Messrs Bhagwati and Panagariya choose to concentrate.
The understanding, which is central to our book, that economic growth is greatly helped by early public support for the education and health of the people draws on positive experiences from Japan, China, Korea, Singapore and many other countries. It can scarcely be like putting “the cart before the horse”.