Politics of Poverty

Geeky gladiators in combat about the future of growth and poverty in India

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Two of South Asia’s most prominent economists–Amartya Sen and Jagdish Bhagwati–debate, get personal.

Two of India’s most celebrated economists are engaging a heated and increasingly personal debate through newspaper editorials and interviews. The subject is actually an old one, but the stakes couldn’t be higher:  whether India should prioritize growth or equity.

A good overview of the debate is here. Of course it’s hard to summarize this debate and the decades of intellectual analysis and political pendulums that underlie the contending positions, but here’s how I describe it:

Jagdish Bhagwati,  professor of economics and law at Columbia University. Photo: http://bit.ly/12OBpxj
Jagdish Bhagwati. Photo: http://bit.ly/12OBpxj

Jagdish Bhagwati—champion of free trade, advocate of human rights, and Professor at Columbia University—argues that India should focus first and primarily on generating economic growth, which will drive poverty reduction and help generate a civic minded “burgher” class that can develop India and generate public goods. He points out that there is not enough income in India to redistribute, and that even if the government transferred all the money from the rich, there would still be masses of poor people.

Amartya Sen. Photo: http://hvrd.me/13IIoer
Amartya Sen. Photo: http://hvrd.me/13IIoer

Amartya Sen—Nobel Prize winner, famine theorist, and former honorary President of Oxfam—argues that India has done a lot to generate growth, liberalized industries and opened trade. GDP has grown and so have a variety of subsidies that generally benefit the middle and upper classes. In the meantime, India has not focused on building the human capital that will carry the economic growth forward and has neglected health and education, especially for poor people. He is upset that the few subsidies that are targeted to poor people, i.e. food distribution, are being attacked as too expensive and inefficient. He says political obstructionism that is delaying enactment of new food rights legislation is killing people.

Underlying this debate is a political rivalry and a looming election in 2014, in which the opposition Bharatiya Janata Party (BJP) is challenging the ruling Indian National Congress party. Although neither is explicitly making the link between their views and the parties, Sen stirred controversy by saying that he would not want the leader of the BJP as prime minister, because he is not sufficiently secular to rule the ethnically and religiously diverse India.

There’s a LOT more to this and it’s great fun to see these accomplished and clever debaters take up the fight.  At times, it gets personal. Each has accused the other of “carpet-bagging.” (Bhagwati lives in New York, Sen lives in Cambridge.) The fight is probably good for sales as well.  Each is co-author of books on India that are currently in bookstores.

But the stakes couldn’t be higher – not just for India, but for the world. This debate is being played out in every country: growth versus equity; the sequencing of policy; whether to focus on assisting poor people directly, or relying on the engine of economic growth to pull them up; and the role of the state. These are issues relevant to all of us and every place.

Meanwhile, Vice-President Joe Biden is blundering into India this week and praising India as a rising power and commending the liberalization reforms of 1991.  In his briefcase are a long list of complaints from the US business sector on India’s intellectual property rules, taxes, and trade policy.

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