Tuesday, June 7, 2016

On The Egalitarian Ideas in Amartya Sen’s Nobel Lecture

Amartya Sen is not a real economist; he is a social welfare warrior. The Nobel Prize that he won in 1998 was, as per the press release from The Royal Swedish Academy of Sciences, for “his contributions to welfare economics.” It is noteworthy that Sen’s Nobel Prize was not for “economics,” it was for “welfare economics,” which is a polite name for “public economics,” which, in turn, is a polite name for the so-called “trickle-down economics.” 

The Nobel Lecture that Sen gave at the Nobel Award Ceremony, titled ‘The Possibility of Choice,’ was mostly focused on Kenneth Arrow’s so-called impossibility theorem, which suggests that it is impossible for a group to make decisions that would satisfy everyone's wishes.

Here is an excerpt from Sen’s Nobel Lecture.   

If there is a central question that can be seen as the motivating issue that inspires social choice theory, it is this: how can it be possible to arrive at cogent aggregative judgments about the society (for example, about "social welfare," or "the public interest," or "aggregate poverty"), given the diversity of preferences, concerns, and predicaments of the different individuals within the society? How can we find any rational basis for making such aggregative judgements as "the society prefers this to that," or "the society should choose this over that," or "this is socially right"? Is reasonable social choice at all possible, especially since, as Horace noted a long time ago, there may be "as many preferences as there are people”?

Further in the lecture, Sen posits the following questions:

When would majority rule yield unambiguous and consistent decisions? How can we judge how well a society as a whole is doing in the light of the disparate interests of its different members? How do we measure aggregate poverty in view of the varying predicaments and miseries of the diverse people that make up the society? How can we accommodate rights and liberties of persons while giving adequate recognition to their preferences? How do we apprise social valuations of public goods such as the natural environment, or epidemiological security?

The egalitarian questions that Sen proposes with the aplomb of a muddled welfarist are based on the notion that the concepts such as "social welfare," or "the public interest," or "aggregate poverty,” or “social choice,” or “socially right,” or “social valuations,” are valid. But this is not true. These are invalid concepts that Sen is using to conjure mythical questions. 

There is nothing called social welfare: Society consists of individuals, whose interests can only be protected when individual rights and property rights are safeguarded by the constitution.

There is nothing called public interest: There is only the rational self-interest of the individual citizens.

There is nothing called aggregate poverty: There is only “poverty,” which is the result of government intervention in the economy. If the government stops meddling in the economy, people will find a way of improving their financial condition.

There is nothing called social choice, or socially right: The basic purpose of having rule of law, is to prevent any group of people from imposing on others their vision of what is “social choice” or “socially right.”

There is nothing called social valuation: Valuations ascribed through government orders are unreal. Only the free market is capable of discovering the financial value of anything.

In his Nobel Lecture, Sen offers a glimpse of his totalitarian ideas when he pontificates about his methodologies for identifying the so-called poor and deprived people who will be the recipients of his welfare largesse. 

Do we get enough of a diagnosis of individual poverty by comparing the individual's income with a socially given poverty-line income? What about the person with an income well above the poverty line, who suffers from an expensive Illness (requiring, say, kidney dialysis)? Is deprivation not ultimately a lack of opportunity to lead a minimally acceptable life, which can be influenced by a number of considerations, including of course personal income, but also physical and environmental characteristics, and other variables (such as the availability and costs of medical and other facilities)?

In Sen’s egalitarian utopia, anyone suffering from an expensive illness will have the first claim on the earnings of other individuals in the society. This is a typical argument, which socialists use to make a case for state control of healthcare. However, government’s meddling in healthcare only leads to the creation of a huge bureaucracy, which stifles competition, makes innovation impossible, and paves way for a massive rise in the price of healthcare services.

Amartya Sen’s entire Nobel Lecture is full of socialist ideas which have failed so many times in so many countries. But with progressivism running amok in the world, such ideas are deemed important enough to be glorified with the prestigious Nobel Prize.

A look at Sen’s body of work makes it abundantly clear that he is a socialist. Among Indian economists, he is probably the biggest repository of socialist cliches. But the surprising thing is that he has never publicly confessed that he is a socialist. Journalists have asked him, on many occasions, if he was a socialist—a simple question that he can answer in yes, or no. But he always dodges such questions by claiming that he prefers not to be bound by any dogma. 

In the speech that he gave at the Nobel Banquet, on December 10, 1998, he whined about the sheer injustice of people having the temerity to ask him if he was a socialist.

Here’s an excerpt from his speech at the Nobel Banquet:

Now a seriously silly thought. From this focus on open-minded reasoning, there is much that economists too can learn. The subject stands to lose a lot from dogmatic beliefs of one kind or another (for example, we are constantly asked: "Are you against or in favour of the market? Against or in favour of state action? Just answer the question - no qualifications, no 'ifs' and 'buts,' please!"). This is an invitation to replace analysis by slogans - to be guided by grand dogma, either of one kind, or of another.

But it is not at all silly to inquire if Sen is for free markets or for state action. Questioning him about his economic ideology does not amount to replacing analysis by slogans. People have the right to know the truth about Amartya Sen’s economic ideology, because he is a very influential crony-economist. For decades he has been in the business of advising governments and international organizations on social welfare and famine control. He was an advisor to the Congress led regime, when it was in power in India for 10 years (2004 to 2014).

Every real economist knows that instead of helping the poor the welfare state perpetuates poverty. Countries that were once socialist or communist are now making efforts to open their markets and cut down on welfare, which they know from past experience has a disastrous impact on the economy. But all this doesn't matter to Sen, who has no moral qualms about being economical with facts while conjuring ideas for supporting welfarism. It's clear that he supports welfarism because he derives his sustenance from the mammaries of the welfare state.

1 comment:

Sanjeev Sabhlok said...

Thanks, Anoop. Good article.

One error, though. You may wish to review your explanation of the term "welfare economics". Welfare economics is NOT socialist economics at all. It is simply a consideration of the overall impacts of the market system.

In fact, the first fundamental theorem justifies Adam Smith's invisible hand as promoting the greatest wealth in a nation.