Development of Freedom

From the impressive mind of Mr. Sam Pagano - 

Recently I have come across Amartya Sen’s book Development of Freedom  which marked a turning point in the thinking of how we measure economic development.

Sen's main argument is that it is not enough to simply measure the results of economic development programs in terms of Gross National Product increases, because those increases only identify the health of the national economy as a whole. Because of this rubric, economic development policy is designed to increase Gross National Product. Sen argues that perhaps this methodology is not indicative of true economic development. 

Sen attests that GNP is only one element of economic development, and is a poor indicator of economic development on a micro level. He proposes that instead of looking at the overall health of a nations economy it is instead more important to understand economic development as an increase in the individuals capacity to participate in the market place. Developing nations generally have extremely weak states that cannot fulfill their economic goals and for the most part have extreme economic disparity. Further, GNP would not reflect political corruption in resource rich nations in Latin America that leads to massive wealth saturation in the already elite. While the state might have an influx of capital, that economic capacity will not always extend to the citizen. In neo-patrimonial states, the public and private spheres become one, where the government seeks to maximize individual gains at the expense of the populace. It is this line of reasoning that led Sen to believe that development should be measured by how much programs increase not the state's capacity to participate in the global economy, but the citizens economic facility to compete in the marketplace.

Developing nations already have massive disparity among the lower class and economic elite. Often times economic aid largely benefits those already with economic capacity. Sen argues that economic development should not be focused just on increasing the pre-existing market within a state, but also the individual ability of the citizens to participate in that market, what Sen calls agency. This agency, Sen uses to describe the individuals capability to participate in making their own goals; their capacity to pursue them without significant social, political, economic barriers; and the ability to choose what to do with the fruits of their labors as freedom. Conversely he labels those obstacles, put in place by social, political, and economic actors, as unfreedoms.

Sen argues that political, economic, and cultural freedom are intrinsically linked, each supporting and allowing the other to continue. He also notes that his finding suggest that because of these connections "sustainable agency emerges as a major engine of development".  He goes on to note that "the freedom to enter markets can itself be a significant contribution to development, quite aside from what market conditions may or may not do to promote economic growth or contribution". 

Sen is not arguing that market conditions and state economic policies should not be considered when evaluating the level or success of economic development programs, rather that by understanding the nature between "incomes and achievements, between commodities and capabilities, between our economic wealth and our ability to live as we would like". He draws the line of reasoning to the observation that we do not generate wealth for the sake of wealth, but because wealth allows us to do those things that we would like. If social, political or economic barriers exist that prohibit the accumulation and use of wealth by the individual, what good is the development of an economy designed to partake in that forbidden exchange?

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