Development as Freedom

AMARTYA SEN, who won the Nobel Prize for economics in 1998, is best known for his studies of poverty and famine. He has argued that no democracy has ever suffered a famine--a striking instance of his larger point that many issues of distribution cannot be analyzed in economic terms alone. Development as Freedom is an important overview of his thought, and one of his most accessible works, though still not an easy read.

Amartya Sen wants us to "think capabilities, not commodities." Sen places economic life within the wider context of personal and societal wellbeing. He thinks a central task of a good society is to "convert," as efficiently as possible, economic wealth into human capabilities. Some societies are better at this than others. Sen gives examples of countries with relatively high income per capita but low quality of life (South Africa, Singapore) and others with relatively low income per capita but high quality of life (Sri Lanka, Costa Rica). The purpose of economic development, then, should be not the production of more and more goods, or the creation of more and more wealth, but rather the expansion of people's capabilities to function and thrive in their communities. It is relevant to ask: Are people well nourished? Are they able to obtain a good education? Can they appear in public without shame?

This shift of framework can seem rather abstract until Sen applies it to matters, literally, of life and death. Take famines. Conventional wisdom long held that famines are caused by the lack of food. According to this view, the answer to famine is to provide emergency food relief and then increase or repair a country's total food production. Sen has shown that while food supply is relevant, the ability of people to control their access to that food is most crucial. A country in which people can share the available food supply can almost always avoid famine. Democracies are more successful at avoiding famine because starving people and their advocates are able to make their demand for help more politically compelling. Democratic India, for example, has managed to warn its politicians about impending famines, and thereby has avoided them, while authoritarian China in the late 1950s did not get that message to its leaders, and starvation followed.

The capability framework also sheds light on the household. Sen shows that income earned in the market by a male breadwinner is often not evenly distributed within the household, due to cultural as well as legal factors that discriminate against women. Standard economic analysis (if it doesn't peer inside the institution of the family) overlooks the resulting inequality. Households in which mothers have adequate education and access to outside employment achieve better health, not just for mothers but for their girls and boys alike.

The market system is often touted for the instrumental freedoms it provides for people--that is, the market helps people to meet basic needs like having adequate nutrition and shelter. But Sen argues that the market system also produces the intrinsic good of participation--participation in social life through "freely" chosen work and through buying and selling products of one's choosing. Even staunch supporters of the market often miss the significance of participation.

Sen aptly states that no market choices are fully free (they are constrained both by the talents and background of the individual and by the nature of society itself). This acknowledgment leads the author to note the potential value of redistribution to alleviate those severe inequalities that prohibit full participation in society. In addition, Sen points out that political and civic participation can help citizens to deliberate together about "what they really need" and what individual and societal ends are truly worth valuing.

In his final chapter Sen surveys the relationships between justice, freedom, and responsibility. And he reiterates the advantages of capabilities over narrower measures of human development. The idea of "human capital" is a step forwards, but is still too narrow in its restriction to effects on production; it fails to capture the direct contribution of human capabilities to well-being and freedom and their indirect effects on social change.

Confessions of an Economic Hit Man

or How the United States Uses Globalization to Cheat Poor Countries Out of Trillions

John Perkins was a self-professed Economic Hit Man. He worked for a score and more years as chief economist at an international consulting firm in Boston called Chas. T. Main. His job was to persuade countries that are strategically important to the U.S. - such as Indonesia, Panama, Ecuador, Iran and Saudi Arabia - to accept enormous loans for infrastructure development from USAID and World Bank and then to make sure the lucrative projects were contracted out to U.S. corporations. This ensured that the principal money moved only from Washington D.C. to New York, Boston and San Francisco.

The countries which received all the infrastructure improved the lot of the top 2% of their elite and further marginalized bulk of their poorer population. Stuck with extraordinarily huge debts which they couldn't possibly repay, these countries came under the control of the U.S. government and other U.S.-dominated aid agencies. Terms of repayment were meted out and the foreign powers were forced to hand out free or cheap oil, allow U.S. military bases and other atrocious empire building actions.

As an economic hit man, chief economist John Perkins' job of persuasion entailed coming up with projected economic growth rate charts over a futuristic 25 years in the event of the country accepting the generous loans of the empire-building aid agencies. According to Perkins, when he and his ilk failed to convince the heads of state, the CIA (he calls them sharks) would move in and silently assassinate the president and instead place a puppet at the head who would agree to the terms of the loan. When this failed, U.S.A. would go to war, an Iraq would occur.

Very lucidly in his new book Confessions of an Economic Hit Man, John Perkins takes one through his career, from being hired as an econmic hit man to his actions in Indonesia, Equador, Panama, Saudi Arabia and Colombia. An insider's view to building an empire.

Here is a link to an interview with John Perkins with Amy Goodman on the Democracy Now website.