Is Amartya Sen a
Emmanuelle Benicourt (co-founder of Austisme-Économie, Ecole des Hautes Etudes en Sciences Sociales - Paris)
© Copyright 2002 Emmanuelle Benicourt
The numerous reactions to Bernard Guerrien’s essay (“Is There Anything Worth Keeping in Standard Micro-Economics?”, pae review n°12 and n°13) show that there is no consensus among heterodox economists concerning what constitutes “autistic” economics. In this article, I would like to initiate another but parallel debate by questioning the widely held opinion that Amartya Sen has made an important contribution to post-autistic economics. I wonder if he is really, as Geoff Harcourt implies, “a real force for good in our discipline and [if] the award of the Nobel Prize to him is a positive signal, to be embraced, not belittled”.
Before examining Amartya Sen’s theoretical system, let’s recall that he was not awarded the Nobel Prize for his eventual “heterodox” research programme, but for his very mainstream contributions to “standard” economics - particularly for his work on Social Choice (Nobel Press Release, October 14, 1998). The Prize thus mainly concerns Sen’s early work in which he tried to go beyond Arrow’s “Impossibility Theorem” by weakening certain formal – and secondary – conditions (see, for example, Collective Choice and Social Welfare, 1970). The 1998 Nobel Prize, therefore, does not reward Sen’s possible “de-autistification” of economics.
Some people may argue that although Amartya Sen oriented his early investigations to mainstream issues, a shift can be observed in his publications since the early 80’s. Indeed, from 1982 on, Amartya Sen focused his efforts on building the so called “capability” approach. For many economists (whether orthodox or heterodox), this new system constitutes real progress in economic theory: it “reintroduces” ethical and philosophical considerations into economics. I will argue, however, that although Amartya Sen’s “capability” approach treats some philosophical issues (as do all economic theories), his underlying theoretical system remains undeniably neoclassical.
Sen’s “capability” approach
“Functionings” instead of “utilities”
The concept of capability was introduced so as to overcome the deficiencies of what Sen considers to be the “rawlsian” and the “utilitarian” approaches. He defines his concept as each individual’s freedom to achieve a particular life.
As he puts it : “The expression [capability] was picked to represent the alternative combinations of things a person is able to do or be - the various ‘functionings’ he or she can achieve (…) Functionings represent parts of the state of a person – in particular the various things that he or she manages to do or be in leading a life. The capability of a person reflects the alternative combinations of functionings the person can achieve, and from which he or she can choose one collection. The approach is based on a view of living as a combination of various ‘doings and beings’, with quality of life to be assessed in terms of the capability to achieve valuable functionings” (“Capability and well-being”, 1993, p. 31). In his last book, Development as Freedom, Sen explains that “a person’s ‘capability’ refers to the alternative combinations of functionings that are feasible for her to achieve. Capability is thus a kind of freedom: the substantive freedom to achieve alternative functioning combinations (or, less formally put, the freedom to achieve various lifestyles).” (Development as Freedom, 1999, p. 74-75).
Just a variation of standard microeconomics
The theoretical approach proposed seems, at first sight, revolutionary. However, when Sen explicitly describes his system (particularly in Commodities and Capabilities, 1985), it becomes clear that it is just a variation of the mainstream approach. Instead of reasoning in terms of an n-dimensional space composed of “commodities” (goods or utilities), Sen proposes a space of “functionings”.
Sen starts from the standard model, and takes two steps. First, following an approach developed by Gorman (1959) and Lancaster (1966), he considers that it is useful to move to the space of the “characteristics” of goods, rather than that of the goods themselves. Second, Sen endows each individual with a set of “utilization functions” (reflecting what each individual can do or be with the characteristics of goods), and with a set of commodities (what he calls the ‘entitlement set’). The functionings of each individual will then depend on the choice of a particular commodity vector and of a utilisation function (see Commodities and Capabilities p. 11-14, and p. 26-27). The capability of each individual is then given by all the possible functionings an individual can achieve. The formal presentation of Sen’s system (by Sen himself) shows how similar it is with the standard model and contrasts sharply with his “literary” essays where he invokes his approach.
What are Amartya Sen’s contributions to post-autistic economics ?
I just don’t understand how this theoretical system (which contains many inconsistencies, which I shall not dwell upon here) can be considered as a contribution to post-autistic economics.
His empirical investigations
Some people seem to believe that the capability approach - as opposed to the standard approach - is particularly fruitful in empirical research. Yet, Sen (just like other neoclassical economists) never uses his theoretical construction when he examines concrete questions: he merely calculates correlations between certain basic indicators (such as life expectancy, literacy, infant mortality rates, etc…)
One does not really need his theoretical framework to carry out these investigations. And I have not found, in any of Sen’s publications, an empirical investigation that directly apprehends concrete economic and social issues using the “capability” concept.
Everyone knows that illiteracy, sickness, short life expectancy, high infant mortality, etc., should be eradicated because they impede people from leading good and happy lives. Sen seems to believe that by giving these evils more sophisticated names (“deprivation of basic capabilities”) some fundamental breakthrough is made in our understanding of the causes and remedies of these evils. At least that is the impression one gets in certain passages of his work. For example, in a book with Jean Drèze, it is said : “Poverty is, thus, ultimately a matter of ‘capability deprivation’, and note must be taken of that basic connexion not just at the conceptual level but also in economic investigations and in social or political analyses. This broader and more foundational view of poverty has to be kept in view while concentrating, as we often would in this monograph, on the deprivation of such basic capabilities as freedom to lead normal spans of life (undiminished by premature mortality), or the freedom to read or write (without being constrained by illiteracy).” (Drèze & Sen, India: Economic Development and Social Opportunity, 1995, p. 11).
His Introduction of Moral Philosophy into Economic analysis
Others may argue that although Sen has a “mainstream bias”, he nonetheless reintroduces philosophy in economic analysis. Although this is partly true, one may question Amartya Sen’s objectives in this domain by quoting Sen himself. In his last book, he says:
In the absence of such imperfections (including the nonmarketability of some goods and services), classical models of general equilibrium have been used to demonstrate the merits of the market mechanism in achieving economic efficiency. (…) It is possible, however, to question whether the efficiency sought should not be accounted in terms of individual freedoms, rather than in utilities. (…) I have, in fact, demonstrated elsewhere [“Markets and Freedoms: achievements and limitations of the market mechanism in promoting individual freedoms”, in Oxford Economic Papers, 45 (1993), 519-541] that in terms of some plausible characterisations of substantive individual freedoms, an important part of the Arrow-Debreu efficiency result readily translates from the ‘space’ of utilities to that of individual freedoms, both in terms of freedom to choose commodity baskets and in terms of capabilities to function. In demonstrating the viability of this extension, similar assumptions are employed as are needed for the original Arrow Debreu results (such as the absence of non marketability). With these assumptions, it turns out that for a cogent characterisation of individual freedoms, a competitive market equilibrium guarantees that no one’s freedom can be increased any further while maintaining the freedom of everyone else. (…) The basic result about market efficiency can, in this sense, be extended to the perspective of substantive freedoms. (Development as Freedom, 1999, p. 117-119).
This excerpt clearly shows two things. First, it indicates that Sen (like most neoclassical theorists) confuses the highly centralized “general equilibrium model” with the completely decentralized “market mechanism”. Second, it shows that Sen indeed “introduces” some philosophical concepts into standard economics, but that he does not, however, depart from the mainstream approach. One may thus ask if he has enriched economics or if he has impoverished moral philosophy.
Sen and Mainstream Economics
Finally, I would like to highlight an important aspect of Sen’s vision: his faith in the future of standard economic analysis and his optimism concerning the direction in which it is being “enriched”, “broadened”, etc., making it more and more capable (if one believes Sen) of understanding (and proposing solutions for) economic and social problems. For example, in Development as Freedom, he affirms:
The modelling of the market economy in the recent development literature has substantially broadened the rather limited assumptions made in the Arrow-Debreu formulation. It has particularly explored the importance of the economies of large scale, the role of knowledge, learning from experience, prevalence of monopolistic competition, the difficulties of coordination between different economic agents and the demands of long-run growth as opposed to static efficiency. On different aspect of these changes see Avinash Dixit and Joseph Stiglitz (…), Krugman (…) Romer (…) Lucas (…). These developments have very substantially enriched the understanding of the process of development and in particular the role and functioning of the market economy in that process. They have also clarified the insights of earlier economists on development. (Development as Freedom, 1999, note 12, p. 321).
Similarly, in a book that on India’s economic development, he declares :
“Recent work on economic growth has also brought out sharply the role of labour and the so-called ‘human capital’. The economic roles of school education, learning by doing, technical progress, and even economies of large scale can all be seen as contributions – in different ways – to the centrality of human agency in generating economic expansion. In terms of economic theory, this shift in emphasis has provided one way of filling the large ‘residual’ that was identified in the basic neo-classical model of Solow (1956), and recent growth theory has done much to bring out the function of direct human agency in economic growth, over and above the contribution made through the accumulation of physical capital” (Dreze & Sen, India, economic development and social opportunity, p. 37).
Furthermore, the note relative to this quotation refers directly to very orthodox economists:
“There is a vast literature in this field, beginning by Solow’s own works that followed his 1956 model. For aspects of the recent revival of the subject, involving ‘new’ growth theory as well as further exploration of older neo-classical models see Romer (…), Krugman (…), Barro (…); Mankiw, Romer and Weil (…), Lucas (…)” (Dreze & Sen, India, economic development and social opportunity, 1995, note 16, p. 37).
These abstracts show clearly that Amartya Sen is not an opponent of the mainstream approach, and that, on the contrary, he considers these theories as constituting great progress in the understanding of concrete economic and social issues. In fact, Sen himself declared openly last year, in a conference organised by the OFCE (Observatoire Français des Conjonctures Economiques) : “I am a mainstream economist” (Conference: “Economic development and freedom", Paris, May 29, 2001)
The question thus remains open to debate: is Amartya Sen post-autistic ? I believe he isn’t, but I am eager to know why heterodox economists constantly consider his theoretical approach as a real force for reform in economics.
Emmanuelle Benicourt, “Is Amartya Sen a Post-Autistic Economist?”, post-autistic economics review,
issue no. 15, September 4, 2002, article 4. http://www.paecon.net/PAEReview/issue15/Benicourt15.htm