Book Review
Title: Development as Freedom
Author: Amartya Sen
Publisher: First Anchor Books Edition, 2000
By Leo Kee Chye
Amartya Sen, winner of 1998 Noble Prize in Economic Science, in this book, not only turns decades of economics on its head by arguing that economic development and individual freedom should go hand-in-hand, to counter poverty, but also lambastes Singapore Senior Minister Lee Kuan Yew’s “Asian Values thesis”, also known as “the Lee thesis”, that promotes economic development at the expense of freedom in the initial stage of development. This book review tells more.
In a clear departure from the main stream of economic thoughts that concern with achieving economic well-being for individuals, Sen, however, contends that freedom of individuals – economic and political freedom and civil liberties, should not be divorced from economic well-being. In fact, he believes freedom should be the principal goal of economic development as well as as the principal mean to counter poverty and insecurity. Freedom and development, rather than being hostile to each other, actually reinforce and complement one another to achieve economic prosperity and ultimately freedom for all. Democracy is not a luxury whereby only rich or developed nations can splurge, but should be seen as an end per se as well as a guiding force to foster and promote economic development and individual freedom.
Clearly, Sen is up against most economists who confine themselves to only measuring individual well-being in economic terms like GDP per capita and neglect the non-economic factors like freedom of speech and press freedom. Sen, instead, attaches great importance to freedom. He believes the goal of achieving freedom need no justification and every society should also work towards achieving it regardless of whether it promotes economic development. He cites a report that White farmers in the US, after the abolition of slavery, attempted to lure back the Blacks as slaves at high wages (even higher than those offered by non-slave work) but were not successful. Freedom, Sen argues, cannot be measured in monetary terms. Moreover, Sen, a developmental economist, did find much empirical evidence in his years of studies on famines and mortality rate to lend support that freedom is the main and foolproof method to counter poverty and insecurity.
The absence of famines were evident in democratic but poor countries like India, Botswana or Zimbabwe after gaining their independence, while China and North Korea, under a totalitarian regime, suffered from their largest recorded famines in history. The cause of famine lies not in the lack of food (though most famines were initially caused by a fall in food production) but how quickly and accurate the problem is being fed back to the government who then implements preventive policies to arrest the food shortage problem in its inception. A democratic form of government is voted to power by the people could not ignore its citizens by inexorably pursuing a policy without being voted out of power. But in a centrally planned economy, without free speech and free press, messages and opinions of ordinary people could not be channelled up the top quickly and accurately, thereby worsening a situation which otherwise could be prevented.
The power to do good goes almost always with the possibility to do the opposite…when things go well, people would not miss the protective power of democracy badly; but when things turn bad, it might be already too late, said Sen. Some planned actions of government or other institutions, despite whatever the best of intention they had, often resulted in consequences they scarcely intended. The last century witnessed some of the horrific consequences of planned economy. The Great Leap Forward initiated in the Chinese economy between 1958-1961 resulted the worst ever famine, where millions of Chinese were literately starved to death. Yet, other economies (with pro-active government) like South Korea, Taiwan, Singapore and modern China have witnessed unprecedented progress, uplifting millions from poverty in a relatively short period of time.
From another viewpoint, he also means that a well regulated but less free economy is surely more desirable than an free one; while a less free system badly managed is definitely far worse off than a free economy. The problem in a well-regulated system is how to ensure it will continue to do so and not ended up badly managed, given that policy makers are human beings and human beings are not infallible.
Sen also points out danger of economic incentives to lift developing nations out of poverty without their corresponding political and social policies for greater freedom. He cites the currency and economic crisis that affected the East Asia and South-east Asia countries after 1997. Despite the spectacular achievements by the NIEs (Newly Industrialised Economies) for the last three decades, they fell ignominiously to the crisis and within a short span of time left millions destitute. Here, he lambasts Lee Kuan Yew’s theory that the Asian’s Miracle is greatly due to Asian Values (Confucianism), where these values taught Asians the importance of hard work and thrift as well as giving up some individual freedom in exchange for greater prosperity for the community as a whole. Instead, Sen argues the economic growth in the Asian countries was due not so much of a harsher political system but a “friendlier economic climate”.
The book on the whole provides much insights to what we usually known as economic development and how we should see it in the light of freedom for individuals. Though I may not totally agree with his analysis, I am sure that I will not see the issue of development and freedom the same as before.
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Comments
Sen has defended his stance powerfully and eloquently that freedom is an end per se and the principal mean to development. By and large, I agree with his analysis wholeheartedly, but not quite everything. I do not doubt his excellent work on famines and mortality rate in developing nations over the last few centuries, but I have my scepticisms when he transplanted his analysis and conclusion wholesale to areas outside of famines and mortality rate, like the Asia Currency Crisis. And he has not done, to my knowledge, any research on the Asia Currency Crisis with the thoroughness he did for famines and mortality rate. No one can deny that the crisis was in part due to less than desired transparency, as well cronyism and corruption in businesses and governments. But there were more to the crisis than just that. Even with a democratic system in place, the crisis might still happen. Look at the US, the epitome of a democratic system, was caught off guard by the Great Depression in 1929 and still reeling for years until WWII broke out. Or the spectacular attack on the British pound in 1992 by currency speculators, notably George Soros, which ultimately led the collapse of the fixed Exchange Rate Mechanism (ERM) for European currencies. I believe political and economic freedom as well as civil liberties are sufficient factors for achieving economic prosperity but not necessary (See footnote 1.)
Equally important is the fact that the effectiveness of democracy, however good per se, should not be oversold. There are missing pieces to the picture before the full benefits of democracy can be harvested in a developing nation. For example, there must a bill of rights to guarantee basic rights for everyone so as to ensure that minority will be protected from the potential tyranny of the majority, given the rule of majority in the democratic system. Germany in the early 1930s was technically a democratic country before Hitler’s Nazi party won the election by a small margin.
A problem which plagues both developed and developing democratic countries is the presence of special interest groups who wield much power over the government. For example, lavish farm subsidies to farmers in developed nations have always been a perennial debate between developed and developing countries. Most economists agree the consumers in developed nation will gain the most from cheaper farm products once the subsidies are lifted. However, such benefits are diluted too thinly among the many (the consumers) and pains are concentrated among the few (farmers). Inevitably, the pressure normally come most from farmers, who have more to lost, than from consumers, who has lesser to gain.
I share with Sen that I do not believe in such a thing as “Asian Values” which means values inherent in most Asians to value hard work and thrift as well as giving up some individual freedom in exchange for greater prosperity for the community as a whole. Moreover, giving up individual freedom has nothing to do with economic development. For years, I never quite understood the argument by our government that controlling trade union activities is essential for attracting and competing for foreign investments (1969 Industrial Relations and 1968 Employment Act). But Hong Kong has none of these measures, yet it has achieved comparable growth as Singapore. South Korea’s regular militant and violent trade union demonstrations, often featured in prime time news hours worldwide, have not in anyway diminished South Korea’s ability to compete internationally.
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