India is the only country in the world which is trying to become a global economic power with an uneducated and unhealthy labour force.

On 6 November Amartya Sen visited LSE to discuss his new collection of cultural essays Country of First Boys with Nicholas Stern. Before taking the stage in the packed Old Theatre, he spoke to Sonali Campion and Taryana Odayar about the Indian government’s approach to development, Kerala as a model for universal education and healthcare in India, and his faith in democracy.

SC: You have said that looking at the end point of a debate is not an ideal way of understanding the wider discussion. This seems relevant in relation to economic policy today, where developing countries aspire to high and continuous growth. What’s your view on the current Indian government’s manner of pursuing growth?

AS: Let me make a clarification first. The point about the end point not being the only issue asks what were the counter arguments that were considered? What were the different points of view that may or may have not have been aired, even if the end point is correct? That only becomes relevant when you agree with the end point. In the case of the policy as it stands now, that is not the case. I think the end point is wrong. The argumentation process is wrong as well, but there are two distinct issues here.

India is the only country in the world which is trying to become a global economic power with an uneducated and unhealthy labour force. It’s never been done before, and never will be done in the future either. There is a reason why Europe went for universal education, and so did America. Japan, after the Meiji restoration in 1868, wanted to get full literate in 40 years and they did. So did South Korea after the war, and Taiwan, Hong Kong, Singapore and China.

The whole idea that you could somehow separate out the process of economic growth from the quality of the labour force is a mistake against which Adam Smith warned in 1776. It’s an ancient danger, and he might have been right to think that the British government at the time did not pay sufficient interest in basic education for all. Unfortunately that applies today to government of India as well. It doesn’t acknowledge the relevance of the quality of human labour.

That is the foundation of their mistake, their conclusions therefore are wrong. For example, they are trying to go suddenly for everything to be done by cash, which is meant to be an experiment. In one of his first interviews after winning the Nobel Prize this year Angus Deaton said this is purely an experiment, but it’s an experiment with the lives of the poor. And I’m afraid I agree with him, and his scepticism towards it. There was a reason why someone as intensely keen on the market economy as Adam Smith thought the government has to make the country fully literate, this is something the government can do. America is meant to be very anti-government but every American has a right to primary school education paid for by the government, you’re picked up from your home by government buses, delivered to your state school and educated there.

India is trying to be different from America, Europe, Japan, Korea, Hong Kong, Singapore, Taiwan, Singapore, China – all of them. This is not good way of thinking of economics. So foundationally, the government’s understanding of development underlying their approach is mistaken. Having said that, the previous government was terribly mistaken too. But one hoped there might be a change, and there has been, but not for the better. All the sins of the past government have been added up.

SC: Do you see the current challenges to secularism in India as a threat to the country’s economic progress?

AS: Recently Raghuram Rajan, governor of the Reserve Bank (of India) said that economic goals require a tolerant economic climate and I think he is basically right. I’ve done no independent research on that, my dislike of the lack of tolerance is because it is terrible for human beings and the society, but I respect Rajan enough to think he is also right.

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posted by f. sheikh