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Illustration: Jayachandran/Mint
Illustration: Jayachandran/Mint

The story of two warring scholars

The Sen vs Bhagwati issue is about the gap between imagination and prudence

Jagdish Bhagwati and Amartya Sen are among best-known names from India in the Western academy. Both hold impressive academic positions and have remarkable scholarly achievements to their name. They have, for long been involved in a battle of ideas about the relative role of governments and markets in determining economic choices.

Had this been another academic fight—something not unusual, as universities and think tanks are by design the arena for such squabbles—it would have hardly been worth more than a glance. But the fight is now very public (“Why Amartya Sen is wrong", Mint 24 July by Bhagwati and Sen’s interview “The smugness of cynicism," in the same issue). Public debates between economists and, in general, among scholars are been common through history. These debates are also, in some instances, the source of ideas for policymaking. So in that sense, there is nothing unusual in the Sen vs Bhagwati fight.

The debate has now spilled over to the political domain as well. Sen has openly endorsed the United Progressive Alliance (UPA) and the Janata Dal (United) government in Bihar. Bhagwati, in contrast, has been more circumspect in his political pronouncements. He has spoken glowingly about the so-called Gujarat model of development.

It is easy to dismiss the fracas in any number of binary opposites—market vs government, humane vs rational. The list can be elongated. But a true test of any idea’s measure lies in comparing it with realities it seeks to confront. Here, the trajectory charted by the sparring scholars has been more complicated than what simple duals permit.

In terms of their ideas, both have demonstrated remarkable constancy. Take Sen’s case. From his doctoral thesis-turned-into book, Choice of Techniques (1960) to his latest book, An Uncertain Glory: India and its Contradictions (co-authored with Jean Drèze) (2013), he has defended statist policies very adroitly. But in the 53 years that span these books have also come remarkable papers illustrating a diversity of academic interests. Even a random sampling illustrates the professor’s width of scholarly attainment: “The Impossibility of a Paretian Liberal" (1979) (Economics—social choice theory), “Hume’s Law and Hare’s Law" (1966) (Philosophy—dealing with the problem of descriptive vs normative statements), “On the Labour Theory of Value: Some Methodological Issues" (Methodology—a paper that punctures the basis of Marxian economics) (1978). Bhagwati’s oeuvre—considerably less prolific than Sen’s—has been much more restrained in terms of theoretical achievement. But it has not been without influence. One of his earliest books, India: Planning for Industrialization: Industrialization and Trade Policies Since 1951 (co-authored with Padma Desai in 1970) was a critique of Indian economic development that accurately presaged the planning disaster that unfolded soon after.

If in the academy, Sen is a rockstar—he has, after all, held some very distinguished positions—in the real world, the roles have been reversed. Bhagwati’s championing of free trade has always held greater sway. And after the destruction of the Soviet Union and the open acceptance of free market economics, his ideas against protectionism, the sub-optimal nature of regional free-trade agreements and the real welfare gains from free trade, have gained traction that even the current economic-cum-financial crisis has not dimmed.

So what explains this divergence? The simple answer is that there is always a gulf between the world of ideas and the real, humdrum, world of trade, commerce and politics. Abstract ideas—notwithstanding their great analytical power—often lose vitality on the first touch with reality. Ideas have power, but a lot depends on the kind of ideas and how they are translated into action. A concrete example is in order.

Sen and his collaborator, Drèze, have strongly advocated the National Food Security Bill, or NFSB, (now a law, after an ordinance was promulgated early this month). Their arguments have great moral force, itself a product of decades of reasoning and analysis exhibited in dozens of famous academic papers. But does it hold ground? Here, Bhagwati holds fort. Even his obscure papers have greater realism than Sen’s finest contributions. Consider one that he co-authored in 1980 (“Dual Markets, Rationing and Queues", Quarterly Journal of Economics, Vol. 95, No. 4, Pages 775-779). There, he showed with empirical evidence from the functioning of fair price shops in New Delhi how there were large opportunity costs involved in the government’s running of the public distribution system (PDS). Each class of citizens—the rich, the not-so-poor and the poor (Bhagwati’s classification)—had an incentive to hide their real preferences and abuse the system. Bhagwati’s analysis—which has a contemporary ring—dealt with pathologies in a system where the government only supplemented the food distribution network and not its near-total makeover a la NFSB as advocated by Sen. This is a contemporary issue of great public importance. Yet, it is largely driven by a moral tone and is bereft of any rational analysis.

It is not that economists should not produce works of great imagination. Or that their ideas have no relevance in the real world. The issue is one of the gap between what they imagine—however empirically grounded their work may be—and what is prudent. This is the way to approach the Sen vs Bhagwati “fight". To see it as a personal, ego-driven, battle is to misunderstand these two great scholars.

Should scholars have any influence in policymaking? Tell us at views@livemint.com

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