Amartya Sen
Overview of Amartya Sen
Amartya Sen was born in Santiniketan, West Bengal. His father was a Chemist Professor at Dhaka University. He began his education at St. Gregory’s school in Dhaka in 1941, eventually making his way to earn a BA and Ph.D. at Trinity College, Cambridge. He has taught at a number of university including Harvard and Cambridge. He won the Nobel Peace Prize in 1998 for his work in welfare economics.
Sen’s most prominent work has evolved around welfare economics. While growing up Bengal, where he saw the famine of 1943 that killed three million people, and India Sen became aware of the shortcomings of modern economic theory. In the 1950s and 1960s he helped develop the theory of social choice. He published Poverty of Famines: An Essay on Entitlement and Deprivation in 1981. The book stated that lack of entitlement for lower class workers was the cause of famines. In many cases, such in Bengal, a shortage of food was not the reason for famine. Sen attributed the famine to declining wages, unemployment, rising food prices, and poor food-distribution systems. This book also touched on his ‘capabilities’ approach theorem. In this, Sen focused on what people are capable of doing, positive freedom, given their set of skills and surrounding environment. He later wrote more on this approach in “Equality of What.”
Sen also lead a movement to question the fundament assumption of self-interest in modern economics. In classical economics, egoism is accepted as the core behavioral trait of all agents who act rationally through their pursuit of self interest maximization. This will be the focus of the farther discussions.
Problems with Self Interest
Sen believes is ludicrous to connect actual behavior with rational behavior. In Economic Behavior and Moral Sentiments, he writes: “The world is certainly filled with Hamlets, Macbeths, Lears, and Othellos. The coolly rational types may fill our text books, but the world is richer,” (p11, Sen). Classical economics makes the assumption that people act rationally by acting consistently and maximizing their self interest. Consistency does not constitute rational behavior. If a person consistently acts irrationally, they are not acting rationally. People do not always act in order to maximize their self-interest. People do make ethical actions. In Economic Behavior and Moral Sentiments, he makes the point: “To try and use the demands of rationality in going to battle on behalf of the standard behavior assumption of economic theory (to wit, actual self-interest maximization) is like leading a cavalry charge on a lame donkey,” (p16, Sen).
Many economics have argued that self-interest is sole force which propels market based economies. Because self-interest leads to ‘pareto optimal’ outcomes, economists have presumed people act accordingly. Self-interest is a widely claimed notion in economics, but there is little empirical evidence to back it up. The success of capitalism and free markets does not necessarily imply that self-interest is the sole motivation of actors in free markets. In the case of Japan, there has been strong empirical evidence that industrial success was driven agents acting with duty, loyalty and goodwill. Sen argues that self and non-self motives lie behind agents in an economy. This is especially true with how groups, (social classes, unions, families), act in an economy. The combination of selfish and unselfish actions is an important part of group loyalty.
Sen detests the economic assumption of self-interest choice because it creates a thin framework. It fails to incorporate morals and ethics into decision making, which he sees as a major shortcoming.
Incorporating Morals into Decision Making
Classical economics dispose of ethics and morals from impeding their behavioral assumptions. If ethics is allowed into decision making, Sen discovers some very interesting results. First, in Rational Fools, Sen writes: “It is possible to define a person’s interests in such a way that no matter what he does he can be seen to be furthering his own interests in every isolated act of choice,” (p322, Sen). There is more to be said here though. Sen points to two types of concepts that govern ethical actions: sympathy and commitment. The words themselves are not important, but the concepts behind them are important. An act of sympathy corresponds to situations where concern for the other directly affects one's welfare. “If the knowledge of torture of others makes you feel sick, it is the case of sympathy,” (p326, Sen). Sympathy is form of egoism. An individual’s utility is directly effected by the position another individual or individuals are in. A person’s welfare is directly related to the welfare of others. Commitment is a separate issue and is directly correlated with one’s morals. If something does not make you worse or better off, but you are intent on doing something about it, than it is problem of commitment. Sen proposes an example which illustrates this complex circumstance and how it differs from sympathy.
The contrast between sympathy and commitment may be illustrated with the story of two boys who find two apples, one large, one small. Boy A tells boy B, “You choose.” Boy B immediately picks the larger apple. A is upset and permits himself the remark that this was grossly unfair. “Why” asks B. “Which one would you have chosen, you were to choose rather than me?” “The smaller one, of course,” A replies. B is now triumphant: “Than what are you complain about? That’s the one you’ve got!” (328, Sen)
If A’s rationale was based on sympathy, he would have lost nothing by B choosing the larger apple. However, his reaction to B’s choice indicates that was probably not the case. Commitment was the issue. Traditional models are not offset by the existence of sympathetic actions. People still act to improve their own welfare. Commitment, on the other hand, “drives a wedge between personal choice and personal welfare,” (p329, Sen). This wedge impedes this relationship which many traditional economic theories relies on. Sen sees ‘commitment’ as a very important issue. It drastically complicates how agents make decisions. He writes, “Commitment does not presuppose reasoning, but it does not exclude it; in fact, insofar as consequences on others have to be more clearly understood and assessed in terms of one’s values and instincts, the scope for reasoning may well expand,” (p344, Sen). Economic models need to incorporate and explain ‘commitment’ issues.
How Then to Deal with Utility
The Utility functions of modern economics do not incorporate morals or ethics into decision makes. In a standard utility model, an agent has a given level of preference between x and y. In Rational Fools, Sen comments on John Harsanyi’s model that does account for social welfare. In his model there are ‘ethical’ and ‘subjective’ preferences. Ethical preferences represent what the individual prefers without with out moral considerations and subjective what they actually prefer. A person’s self-interest and moral preferences are represented in such a model: “This dual structure permits us to distinguish between what a person thinks is good from the social point of view and what he regards as good from his own personal perspective,” (p336, Sen). Sympathy enters the model through subjective preferences, but the problem of ‘commitment’ is left unclear. Because this utility model is base on preferences of welfare, both personal and social, but exclude the problem of disregarding one’s preference to act for a cause or commitment. Sen writes: “But what if he departs from his personal welfare maximization (including any sympathy), not through an impartial concern for all, but through a sense of commitment to some particular group, say to the neighborhood or to the social class to which he belongs?” (p336-337, Sen). There is failure here to incorporate the ‘commitment’ issue, which Sen sees as a shortcoming of this structure. Sen believes “we need to consider rankings of preference rankings to express our moral judgments,” (p337, Sen).
Sen proposes a complex structure to incorporate all issues which arise when people make decisions. It attempts to measure utility with regard to self-interest, sympathy, and commitment. Sen recommends a meta-ranking of possible preferences an agent may have given a set of circumstances. Let X be the set of a combination of actions available given the circumstances and then let Y be ranking of the set X. Let a third set M be the meta-rankings of set Y. This multiple ranking system allows for a variety of measures be put on a persons decision making. The set Y can be comprised of rankings base on self-interest, sympathy, and commitment. The meta-ranking of that set can rank these rankings based on given level of utility produced given a person’s morals and interests.
Conclusion
Sen’s system is very confusing and complex, but it illustrates that decisions are not always simple actions where a simple preference yields the best utility. It demonstrates there is a wide base of outcomes that can effect a person’s utility in a number of different ways. It parallels Sen’s belief that outcomes can not be simply judged. That being said, people do not always incorporate so much thought into their own actions. However this model presents two important facts. One, it is possible to see that individuals can act with regard to their self-interest, consciousness about social welfare, and within a framework of morals. This complex ranking system more completely represents all the issues that can take place when a person makes a decision. In such a case, this procedure would accurately depict what exist behind a decision and what level of utility is produced. At the same time this framework can act as a measure of an agent’s decision framework. Depending on where an individual’s preferences exist in the meta-ranking set, it is possible to establish the ‘mean’ of a person’s actions. Classical economic models have assumed that this mean sits at ‘self-interest’ preferences. Analyzing preferences and utility outcomes with this model could assert that mean exist farther to the right or left. In other words, people my actually act with more regard to social welfare or morals, or with less regard to such.
This system also impedes on economic assumptions about decision making. It is assumed that people are rational decision makers and they act to maximize their own utility. Preferences are judged by how well they maximize an individual’s utility. If a complex system like this does have merit in decision making, than it can be argued the people are not rational decision makers and they do not always try and maximize their own utility. This system judges actions by on self-interest, morals, social welfare and would could be an endless list of perspectives. Obviously people do not act on all these factors when making decisions. Because their actions do not reflect all these variables, the outcomes will probably not maximize their own utility. People may make a decision, but in reality they have made the wrong one. They have may have not considered moral values at the time, and later reflecting on the decision may have remorse for what they have decided. Not only can the lack of information cause people to make bad decision, but an inability to incorporate morals into decision may create negative circumstances. By complicating decision making, it is that much easier to suppose that people make wrong decision consistently. The issue of commitment also sheds interesting light on decision making. Apart from the fact people may unconsciously make bad decision, they may also consciously make bad decisions. This system farther chastises core assumptions made by modern economics.
