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Education, Welfare and Economics: A Human Capabilities View

In terms of welfare, the human capabilities approach was developed as a means of measuring the opportunities open to an individual and through that, the welfare of a society. Two of the major authors in the capabilities approach are Amartya Sen and Martha Nussbaum. Popular metrics which gets conflated with the status of a nation’s welfare is that of Gross National Product (GNP) or Gross Domestic Product (GDP).

Development as Freedom

Martha Nussbaum takes the view that the dominant theoretical approaches in development economics equate doing well (for a state or a nation) with an increase in GDP per capita. What does the Gross Domestic Product mean to someone who is economically disadvantaged ? For someone in a sink council estate in Edinburgh to hear that GDP has increased is like saying somewhere in London there is a beautiful painting only they cannot see it; or that there is a banquet in the City of London financial district, only they cannot eat any.

Increased wealth is a good thing in that it might have allowed the government to adopt policies that would have made a difference to people in the impoverished districts of Glasgow or Manchester. In general, the benefits of wealth resulting from foreign investment go in the first instance to elites, and this is not simply because GDP is an average figure, neglecting distribution: as the Sarkozy Commission report [Stiglitz Commission on the Measurement of Economic Performance and Social
Progress;  http://www.cerium.ca/IMG/pdf/1-Measurement.pdf] shows, profits from foreign investment frequently do not even raise average household income.

The benefits of this increased wealth do not reach the poor, unless those local elites are committed to plicies of redistribution of wealth; and they particularly do not reach poor women, whose employment opportunities are so much worse than those of men. Nor, as research shows, does economic growth by itself deliver improvements in health and education, in the absence of direct state action.

 

The Measurement of Economic Performance and Social Progress Revisited
Click to Download ‘The Measurement of Economic Performance and Social Progress Revisited’

www.cerium.ca/IMG/pdf/1-Measurement.pdf

 

In Hard Times, Charles Dickens portrayed a classroom in which children were taught the standard approach. Circus girl Sissy Jupe – who has only recently joined the class – is told to imagine that the classroom is a nation, and in that nation there are “fifty millions of money”. Now says the teacher, “Girl number twenty” (in keeping with the emphasis on aggregation, students have numbers rather than names), “isn’t this a prosperous nation, and aint you in a thriving state ?” Sissy bursts into tears and runs out of the room. She tells her friend Louisa that she could not answer the question “unless I knew who had got the money and whether any of it was mine. But that had nothing to do with it. It was not in the figures at all.”

Creating Capabilities The Human Development Approach by Martha C Nussbaum

Nussbaum suggests that “what we seem to need is an approach that asks Sissy Jupe’s question, an approach that defines achievement in terms of the opportunities open to each person”. [Page 12- 14, Martha Nussbaum, Creating Capabilities; The Human Development Approach, First Harvard University Press Paperback edition, 2013, ISBN 978-0-674-05054-9]

[Page 3, Amartya Sen, Development as Freedom, ]

Amartya Sen suggests that growth of GNP or of individual incomes can be an important way to expanding freedoms enjoyed by the members of a society. However freedoms also depend on other social and economic arrangements such as opportunities for education, health care, political liberty, and civil rights such as the freedom to participate in public discussion and open critique.

 

[Page 11, Amartya Sen, Development as Freedom]

 

The empirical studies in Amartya Sen’s book Freedom and Development explore five distinct types of freedom through an ‘instrumental’ perspective. These are:

  • Political freedoms
  • Economic facilities
  • Social opportunities
  • Transparency guarantees
  • Protective security

 

Freedoms are interdependent of each other so cannot be regarded as isolatable. Rather like physics, chemistry and biology are ways of seeing the world and talking about aspects of it which act as functions of each other, various social lenses of seeing the world should be understood as being interrelated as functions of the same thing – a society.

Political freedoms in the form of free speech and elections help to promote economic security. Social opportunities in the form of education and health facilities facilitate economic participation. Economic facilities in the form of opportunities for participation in trade and production are important to generate personal abundance as well as public resources for social facilities. Freedoms of different kinds strengthen one another when cu in an cultivated in an open society.

 

 [Page 41, Amartya Sen, Development as Freedom]

 

Individual freedoms play a central role of in the process of societal development. It is important to examine the social influences, including state actions, that help determine the nature and reach of individual freedoms.

Individual freedoms are influenced by the social safeguarding of liberties, tolerance and the possibility of exchange and transactions. They are also influenced by public support in the provision of facilities such as basic health care or essential education that are crucial for the formation and realisation of human capabilities.

China

The governments of both China and India have been making efforts to move toward more open, internationally active, market oriented economies. China since 1979 and India from 1991. The successful results which China has seen have failed to occur in India. An important factor in this contrast is that seen from the standpoint of social preparedness, China is a great deal ahead of India in being able to make use of a market economy.

While pre-reform China was deeply sceptical of markets, it was not sceptical of basic education and widely shared health care. When China turned to marketization in 1979, it already had a highly literate people, especially the young, with good schooling facilities across the bulk of the country. China had a similar basic educational situation to South Korea or Taiwan, where an educated population had played a major role in seizing the economic opportunities available in a market system.

By contrast, India had a half-illiterate adult population when it turned to marketization in 1991, and the situation has not much improved today. The health conditions in China were also much better than in India because of the social commitment of the pre-reform regime to health care as well as education.

The social backwardness of India left it poorly prepared for a widely shared economic expansion. Its elitist concentration on higher education, its massive negligence of school education, and its substantial neglect of basic health care impoverished the human capabilities of the society.

The contrast between India and China has other aspects including the differences in political systems, and the much greater divergence within India of social opportunities such as literacy and healthcare. There are a great deal of different interconnections between the distinct instrumental freedoms. Their respective roles and their specific influences on one another are pivotal aspects of the process of development.

[Page 45, Amartya Sen, Development as Freedom]

Along with a focus on basic education and basic health care, an early completion of effect land reforms, made widespread economic participation easier to achieve in many of the East Asian and Southeast Asian economies. In Brazil, India or Pakistan, the slow creation of social opportunities has acted as a barrier to economic development. [On this issue, see Amartya Sen and Jean Dreze, India: Economic Development and Social Opportunity (1995).]

The expansion of social opportunities serves to facilitate high employment economic development, as well as creates favourable circumstances for reduction of mortality rates and for expansion of life expectancy. Contrasts can be made between high growth countries – where taking Brazil as example – they have had comparable growth of GNP per head, but also a history of severe social inequality, unemployment and neglect of public health care.

Hunger and Public Action by Amartya Sen and Jean Dreze

In chapter 10 the book ‘Hunger and Public Action’, by Jean Dreze and Amartya Sen, they distinguish between two types of process in the rapid reduction of mortality. One which is “growth mediated” and one which is “support led”.

The growth mediated process in rapid reduction of mortality works through fast economic growth, and its success depends on the growth process being economically broad with a strong employment orientation. It also depends on utilization of the enhanced economic prosperity to expand the relevant social services including health care, education and social security.

The support led process works through a program of skilful social support of health care, education and other relevant social arrangements. This process is well exemplified by the social improvements and economies such as Sri Lanka, pre-reform China, Costa Rica and Kerala. All of these have achieved very rapid reductions in mortality rates and enhancement of living conditions, without much economic growth.

[Page 46 – 9, Amartya Sen, Development as Freedom]

 

The support led process does not wait for dramatic increases in per capita levels of real income, and it works through giving priority to providing social services (particularly health care and basic education) which reduce mortality and enhance the quality of life. Despite their very low levels of income, the people of Kerala, China, and Sri Lanka enjoy enormously higher levels of life expectancy than do much richer populations of Brazil, South Africa, Namibia, and Gabon.

So it is apparent, that taking a perspective of growth mediated processes for improvement of quality of life, or of a support led process, a pivotal role is played by the provision of health care, education and supportive social arrangements.

Life expectancy variations relate to a variety of social opportunities which are central to development including epidemiological policies, health care, educational facilities and so on. In view of this, an income centred view is in serious need of supplementation, in order to have a fuller understanding of the process of development. [See Amartya Sen’s “From Income Inequality to Economic Inequality” Distinguished Guest Lecture to the Southern Economic Association, published in Southern Economic Journal 64 (October 1997), and “Mortality as an Indicator of Economic Success and Failure,” first Innocenti Lecture to UNICEF (Florence: UNICEF, 1995) also published in Economic Journal 108 (January 1998). Retrieved from: http://www.sas.upenn.edu/~dludden/PovertyDefinitionAmartyaSen2.pdf]

These contrasts are of considerable policy relevance, and bring out the importance of the support led process. [See Richard A. Easterlin, “How Beneficent Is The Market ? A Look at the Modern History of Mortality” mimeographed, University of Southern California 1997. Retrieved from: http://www-bcf.usc.edu/~easterl/papers/BenefMarket.pdf]

The need for resources is frequently presented as an argument for postponing socially important investments until a country is already richer. Where are the poor countries going to find the means for “supporting” these services? The answer lies in the economics of relative costs. The viability of the support led process is dependent on the fact that the relevant social services such as health care and basic education are labour intensive, and thus are relatively inexpensive in poor and low wage economies.

Education

A poor economy may have less money to spend on health care and education, but it also needs less money to spend to provide the same services, which would cost much more in the richer countries. Relative prices and costs are key parameters in determining what a country can afford. The need to take note of the variability of relative costs is particularly important for social services in health and education. [This issue is discussed in Dreze and Sen, Hunger and Public Action (1989).]

The growth mediated process has the advantage of having fewer deprivations associated with it (other than premature mortality, or high mortality, or illiteracy) which are directly connected with lowness of incomes such as being inadequately clothed and sheltered. It is better to have high income as well as high longevity (and other standard indicators of quality of life), rather than only the latter. This point is emphasized as there is a danger of being “over convinced” by the statistics of life expectancy and other such basic indicators of quality of life.

The fact that the Indian state of Kerala has achieved impressively high life expectancy, quality of life, low birth rate and high literacy despite its low income level per head of capita is an achievement worth celebrating and learning from. A question has been posed as to why Kerala has not been able to build on its successes in human development to raise its income levels as well? From a policy point of view, this requires a critical scrutiny of Kerala’s economic policies regarding incentives and investments (“economic facilities,” in general).

The support led process is a recipe for rapid achievement of higher quality of life, and has great policy importance. It is a good foundation for moving on to broader achievements which include economic growth coincident with the raising of the standard features of quality of life. Support led success in this sense, remains shorter in achievement than growth mediated success, where the increase in economic opulence and the enhancement of quality of life tend to move together.

The discussion involves one of priorities, and of economic policy of a wider range, particularly in lght of the crashes and market failures which can (and have) hit growth oriented cultures leaving them unprepared for plummeting quality of life levels at the same time as economic failure. Where we value the quality of resilience in the conversation has implications for how prosperity and welfare are approached.

The success of the support led process indicates that a country need not wait until it is much richer before embarking on rapid expansion of basic education and health care. The quality of life can be vastly raised, despite low incomes, through an adequate program of social services. The fact that education and health care are also productive in raising economic growth adds to the argument for putting major emphasis on these social arrangements in poor economies.

Jean Dreze and Amartya Sen India Economic Development and social opportunity

The need for supplementing and supporting market friendly policies for economic growth with a rapid expansion of the social infrastructure such as public health care and basic education is discussed in some detail, in the context of the Indian economy, in Amartya Sen’s joint book with Jean Dreze, India: Economic Development and Social Opportunity, 1995.

 

Amartya Sen’s Development as Freedom has been almost universally praised as a way forward for a more humane society since it was published in 1999, the year after Sen won the Nobel Prize for economics. To many, it is the standard for ethical economics and informs debates worldwide on how to achieve better standards of living and stronger economies.

This article is primarily a digest of his work and aims to inform the reader of the arguments running through the book Development as Freedom surrounding education and its relation to economics and welfare.  To assist people in comparing the original text, placenotes have been studded throughout this to help you reference the original source:

Development as Freedom  by Amartya Sen

Oxford Paperbacks; New Ed edition (18 Jan 2001)

ISBN: 0192893300

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