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Amartya Sen & Jean Drèze are Left heroes but it would be wrong to call them simple statists

Amartya Sen’s emphatic plea for liberating Indian entrepreneurship has not received attention. Neither has Jean Drèze’s concerns over a hostile state.

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History overtook intellectual fashions. The Berlin Wall fell, the Soviet Union collapsed and India was faced with multiple crises characterized by high inflation, low growth, dwindling foreign trade and an impossible balance of payments situation. Willy-nilly, India adopted some aspects of so-called neo-liberalism – lower tariffs, fiscal discipline, elimination of an anti-export bias and so on – even if only in a half-hearted manner.

Younger economists, many with one foot on foreign soil – Kaushik Basu, Arvind Panagariya, Raghuram Rajan, Arvind Subramanian and Surjit Bhalla – came up with a nuanced defence of markets, individual initiative and entrepreneurial freedom. But by and large, most of these attempts remained focused on the good and bad consequences of specific policies, as they were rooted in empirical studies trying to understand what works and what does not.

Deepak Lal, also an exile in North America, has remained a brilliant intellectual descendant of Adam Smith, consistently defending the political and economic liberty of the individual and her right to be free from state tyranny, both as a moral necessity and as something that results in positive consequences.


Also read: Poverty or inequality: What is more important for India and Indian economists


Amartya Sen remains an interesting outlier. His attacks on states and societies which do not focus on the development of human capacities have been publicized. What has not received sufficient attention is his emphatic plea for liberating Indian entrepreneurship, and his arguments that while claiming to help the poor, many actions of the Indian state are in fact regressive in nature. Only the superficial student will conclude that Sen is a simple-minded statist or a fashionable critic of neoliberalism, whatever that might mean.

The same can be said of the naturalized Indian Jean Drèze, whose concern is a state that is hostile and indifferent to its citizens, largely because it is busy running hotels and airlines and, therefore, lacks the capacity to intervene meaningfully in sanitation, public health or education. Drèze, despite being a hero of the left, makes a sound conservative case for building state capacity in the delivery of key public goods and in controlling corruption. What is forgotten is that the benefits of the actions of the Indian state go to the favoured rich. Examples abound.


Also read: Blame British, not Nehru for India’s ‘damaging’ socialist stand on economy after Independence


Fertilizer subsidies help fertilizer companies, not farmers. Free electricity helps rich farmers as poor farmers cannot afford pump sets. The poor, ostensibly on whose behalf these actions are undertaken, are in fact illusory beneficiaries at best. Lal and Sen are moralists in the tradition of the Mahatma and Rajaji, fully acquainted with the ancient Indic attempt to square the circle while dealing with the creative tension between the pursuits of artha and dharma.

The larger failure of the economics profession in India has been that it is stuck in trying to seek out a solution that works. In the process, we forget that Adam Smith supported markets not just because they work efficiently, but also because they pass the moral test of obtaining the approval of Smith’s famous ‘impartial spectator’ – an imaginary being who represents our moral conscience. We also ignore Tiruvalluvar’s emphasis on the celebration of the sober pursuit of material wealth without interference from a tyrant, and Amartya Sen’s concern for the development of capacities in human beings. The country, therefore, remains trapped in trying to do the minimum that it can get away with politically.

This excerpt from Jaithirth Rao’s The Indian Conservative: A History of Indian Right-Wing Thought in India has been published with permission from Juggernaut Books.

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