Comparing the Welfare Economics of Amartya Sen to PROUT

Amartya Sen

By Dada Maheshvarananda

Kolkata economist Amartya Sen was awarded the 1998 Nobel Prize in Economics. A former Master of Trinity College, Cambridge, U.K., he is presently a professor at Harvard University. The Royal Swedish Academy of Sciences cited that he had “restored an ethical dimension to the discussion of vital economics problems.” He is a major pioneer in what today is known as welfare economics. His wide-ranging work focuses on questions of inequality, the measurement of poverty, and on how societies make choices that are both fair and efficient.

“PROUT achieves social equality by making the supply of minimum necessities to all the baseline for economic equality, and insisting that no one be denied access to social opportunities.”

As a child, during the great Bengal famine of 1943 in which five million perished, Sen handed out cigarette tins of rice to starving refugees as they passed his grandfather’s house. Thirty years later, still haunted by those images, his research revealed that India’s food supplies at that time were not unusually low. Rather, the famine resulted from a run-up in food prices spurred by wartime panic and manipulative speculation. The British colonial rulers, immune to democratic pressures, simply stood by.

In his landmark study on the causes of famine, Poverty and Famine, Sen demonstrates that famine is not just a consequence of acts of nature, such as drought or flood, which often precede it; rather it is an avoidable economic and political catastrophe in which the poorest people can no longer afford to buy food because they lose their jobs or because food prices soar. The New York Times credits his research with saving many lives. As a result of his study, governments and relief organizations today put less emphasis on directly distributing food to the poor, and instead focus more attention on restoring personal incomes through such programs as public works projects.[1]

Sarkar, a contemporary of Sen who also witnessed that terrible famine, pointed to one of the same causes in 1959 when he wrote, “Throughout history millions of people have died due to artificial famines created by other human beings… By hoarding grains, they cause artificial famines.”[2]

In his other works, Sen emphasizes that welfare does not actually depend on material goods, but rather on the activity for which they are acquired. In his view, the importance of income is with respect to the opportunities or capabilities that it creates. Health, he argues, as well as other factors, should also be considered when measuring welfare.

Sarkar goes further than Sen by asserting that excess accumulation of wealth and its lack of circulation in productive investments reduces the ability of the common people to acquire goods, and therefore their purchasing capacity is diminished. PROUT includes medical care as a basic necessity which must be available to all people through full employment and adequate purchasing power.

Another of Sen’s major ideas is that all well-founded ethical principles assume that human beings are fundamentally equal and therefore should have equal opportunity and equal human rights. He recognizes that different individuals have different capacities to utilize the same opportunities, and concludes that the distribution problem can never be fully solved; equality in some dimensions necessarily implies inequality in others. Sen does not indicate in which dimensions equality is to be advocated and in which dimensions inequality is to be accepted.

Sarkar offers a philosophical perspective to this dilemma with his concept of the Principle of Selfish Pleasure–the basis of capitalism– which he asserts harms the collective interest and eventually leads to the degradation of individual consciousness as well. To avoid this, he urges society to adopt the Principle of Social Equality. PROUT achieves this by making the supply of minimum necessities to all the baseline for economic equality, and insisting that no one be denied access to social opportunities. The Principle of Social Equality benefits people both individually and collectively.[3]

Finally, PROUT will resolve the inequality question by making special amenities available to meritorious persons who contribute to society. By reducing the gap between minimum necessities and maximum or special amenities, but never closing it completely, a Proutist society will continually raise the standard of living, provide incentives for progres- sive behavior, and improve the quality of life of everyone.

Notes

1 Sylvia Nasar, “Economist Wins Nobel Prize for Work on Famines and Poverty”, The New York Times, Oct. 15, 1998.
2 P.R. Sarkar, Human Society Part 1 (Anandanagar, India: Ananda Marga Publications, 1962, 1998 revised translation), p. 91.
3 P.R. Sarkar, Liberation of Intellect: Neohumanism (Calcutta: Ananda Marga Publications, 1982), pp. 39-42.

Excerpted from After Capitalism: Economic Democracy in Action by Dada Maheshvarananda (Puerto Rico: Innerworld Publications, 2012): www.aftercapitalism.org

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