Sen versus Bhagwati

SEN:

If you want to go fast, go alone. If you want to go far, go together! 

The idea of inclusive development is the one advocated by the Argumentative Indian, none other

than Mr. Amartya Kumar Sen, an Indian Economist and a Nobel Laureate. Mr. Sen says, "I was

born in a University campus and seem to have lived all my life in one campus or another; born in

Santiniketan, on the campus of Rabindranath Tagore's Visva-Bharati." A highly educated and

revered economist and a philosopher, we advocate his views for a prosperous economy and its

unhindered continual growth. 

No nation has grown out of poverty to prosperity without taking care of the basic needs of its

people. Sen argues that growth of an economy is sustainable only if the grass-root level issues

are addressed. He emphasizes on public provision of subsidized food, education and health for

the masses from the very beginning, instead of waiting for the high growth phase to ensue. Sen

believes that public investment in education and health for the masses, apart from their

immediate redistributive effects, would help broad-based sustained economic growth in the

longer run by producing a better quality work force. Not just focusing on the GDP but also on

the social indicators is imperative. The impact that an individual’s contribution has, on the

economy, is formidable.

Presenting the facts, Kerala following the Sen Model has a literacy rate of 95.5%, sex ratio of

1084, greater life expectancy and 16.2 per thousand infant mortality rate as compared to the

statistics from the state of Gujarat which is widely accepted to be predicated upon the Bhagwati

Model which has a literacy rate of 82.2%, sex ratio of 918, lesser life expectancy as compared to

Kerala and 60.9% infant mortality rate. 

The way ahead is the Sen way, one of inclusiveness, rather than focusing on making the rich

richer and proclaiming that there will be prosperity, without paying attention to that section of

the society that needs these propellants of economic growth. The narrow-sightedness that has

made home in the political wills of the Governments need to change. An eye on the horizon, a

vision for sustainable growth is what can make the future of India look promising in the days to

come.

BHAGWATI:

Jagdish Bhagwati is an Indian American Economist and Professor of Economics and law at

Columbia University and an advocate of free trade and Growth. Recently over past two-three

months, there is an ideological debate between Amartya Sen, the Noble Indian Economist and

Jagdish Bhagwati on redistribution and State intervention versus Growth in a free market

economy to resolve all economic problems. This debate is popularly known as Sen vs Bhagwati.

Prof. Jayati Ghosh from Centre for Economic Studies and Planning, Jawaharlal Nehru University

said for this debate, "Media has tended to make it into a gladiator fight between two celebrity

economists."

Amartya Sen believes that growth depends on creating a dynamic workforce capable of learning

on the job which needs health and education whereas we (Jagdish Bhagwati supporters) believe

on laizzez faire that growth will raise incomes sufficiently for the workforce to be able to invest in

their own health and education which we feel that it is capable of creating faster and effective

growth rates. Hence we support Jagdish Bhagwati that it is growth which is vital for the Indian

Economy to develop and Growth should precede redistribution and not the other way round.

History is the proof of this. Indira Gandhi became the Prime Minister of India after Lal Bahadur

Shastri’s death for two reasons – Firstly, the electoral benefits which she had achieved because of

her being Nehru’s daughter. Secondly, they felt that her lack of political base would allow the

Syndicate to rule by proxy. They all were proved wrong when Indira Gandhi joined hands with

the Leftist group, gained control of the party and showed how shrewed a politician she could be.

The 1971 elections were fought with a slogan of "Garibi Hatao", but at the end the actions led to

"garibi badao" that even led to emergency in 1975 suspending fundamental rights from its

citizens. Our Indian Industry was under "lisence Raj" during this epoch where even to produce

more, add machines required Government permission. By the late 80s India was caught under a

great fiscal trap and mounting Current Account Deficits which led the Government to open the

stop gates and liberalize its Economy in 1991. With this it created new jobs, new industries, new

aspirations, new careers, new salaries and packages, emancipation of various classes of our Indian

Society. So we behold that it is Growth that has always been the engine of living-standards of

households plus the development of an economy.

Further we have also found that rapidly growing economies such as South Korea, Taiwan,

Singapore and Hong Kong in the 1960s and 1970s shows that growth pulls the poor into gainful

employment and automatically reduces sustained poverty reduction. Even our superpower US has

also grown into giant because of growth which has made them a developed nation. US poverty

reduced from 50% in 1900 to 30% in 1950 to 12.1% in 1969. It was economic growth that

eliminated child labor possibly well in US. The living standards of the poor in America today are

equivalent to the living standards of the middle class 35 years ago (Source : Stephen Moore and

Julian L. Simon , "It’s all Getting Better All the time : 100 Greatest Trends of the last 100
Years."). Redistribution alone claims that it is effective and a sure shot policy. But one should

even scrutinize the redistributive programmes that were implemented. Public distribution system

shows that 10 % of the food subsidy actually reaches the poor, ineffective NREGA Programme

because of corruption and funds getting transferred to multiple layers of bureaucracy, failure of

"Sarva Siksha Abhiyan". 

 

Hence we believe that India or any developing countries needs high economic growth rates which

would generate requisite revenues to deal with poverty. We feel that growth is the only way to

increase the overall income of a community. If the treasury is empty, all promises are slogans and

there will be no redistribution of resources. Hence that to happen it is very important that there

should be growth first and redistribution will follow. And we would end up with a quote said by

Chanakya , "Economic Growth is the backbone of a nation’s strength".