Gotta get y’alls blood pumping for this post, so let’s start with a pop quiz! Yes, this is graded.
Which country is more prosperous? The US or Saudi Arabia? Got your answer locked in?
According to the GDP per capita, they’re basically the same level. The US wins, but not by much. Why is this so surprising? Maybe because of all the inequality in Saudi Arabia. Maybe you think that the political oppression of Saudi Arabia isn’t included in the GDP. Regardless, many people would agree with you that GDP is a poor way of measuring the growth of a country. But what are our alternatives?
Enter Amartya Sen, the 1998 winner of the Economics Nobel Prize for “his contributions to welfare economics”. We’ve talked about welfare economics before, if you remember J.R. Hicks. Welfare economics is a normative study of economics that tries to provide solutions to the problems that ail our society. Amartya Sen sought solutions too, attempting to find a better way to define a country’s well-being alongside Martha Nussbaum.
It’s called the Capability Approach. Instead of judging countries based on production, Sen recommended we measure based on how capable the population is at achieving certain goals, or capabilities.
A little vague, I know, and honestly, I believe Sen kept it vague because any capability he suggested would immediately go through scrutiny and start arguments. However, his colleague Martha Nussbaum did give a tentative list of capabilities people should be measured on. I’ll use some of her examples to explain what they mean by capabilities.
Nussbaum gives a list of 10 central capabilities: life, bodily health, bodily integrity, imagination and thought, emotions, practical reason, affiliation, other species, play, and control over one’s environment. Some of these capabilities are more controversial than others, with a lot of argument on how necessary the capability is.
Let’s focus on one of these capabilities, control over one’s environment, to better show what it means to provide a capability.
Control over one’s environment is a twofold capability. Firstly, it includes being able to change your environment politically. So this might have been one of your complaints about Saudi Arabia. People should have some measure of control over their political environment (or at least feel like they’re in control, but that’s an argument for another blog post). Secondly, it includes control over your environment materially. This is a fancy way of saying property rights.
Without these capabilities, we have marginalized and excluded groups. It doesn’t matter how well the country’s production is doing, if a group of people are excluded from the political and economic sphere then they will experience a decrease in their well being.
Finally, let’s talk about food
Sen was also really popular for his contributions to famines and food shortages, where he applied the same reasoning. To Sen, famine isn’t an issue of not having enough food to feed everybody, but rather that the food isn’t getting to everybody.
This interesting distinction changes how we should address famines. Sen claims that there has never been a famine in a country that has a democracy. This is a bold claim. Why is this so? People lose their entitlement (or capability, wink wink) to certain commodities and exchange in a more totalitarian regime, which increases the strain on food distribution and thus, leads to famine. So how do we stop food shortages in developing nations? Sen says give them food with a side of democracy.
Amartya Sen was a rare Nobel Laureate; he didn’t win the prize for any single overarching theory. Rather, he did research in many different fields to add to the body of research of welfare economics. His work on capabilities is interesting and still researched in philosophy, sociology, and economics. His work on famines similarly has impacted international aid and development today.
Please pass your answers to the quiz up to the front. Hopefully you’ve learned more and developed a curiosity on Sen’s broad work. Don’t forget, next week we’ll be discussing Robert Mundell and monetary policy.