Nobel prize-winning economist Amartya Sen spoke on the abuses of Adam Smith’s Invisible Hand theory in Goodson Chapel Friday afternoon.
NATE GLENCER/THE CHRONICLE
Economist and Nobel laureate Amartya Sen was at Duke this weekend as part of a two-day series of events honoring the work of Craufurd Goodwin, James B. Duke professor of economics. Sen, Thomas W. Lamont University professor and professor of economics and philosophy at Harvard University, gave the keynote address of the celebration, speaking on “The Uses and Abuses of Adam Smith” in the Goodson Chapel Friday afternoon. He was awarded the Nobel Memorial Prize in Economic Sciences in 1998 for his work in welfare economics. Born in present-day Bangladesh, Sen is known for his work on the economic principles of poverty, famine and gender inequality. Sen sat down with The Chronicle’s Naureen Khan before his lecture to talk about his economic theories.
The Chronicle: Do you know Craufurd Goodwin?
Amaryta Sen: I know him by reputation only, I didn’t know him personally, but he’s a famous guy and this is a famous place and a good center, and he plays a major part in constructing what it is now so it seemed a good thing to do.
TC: Talk a little bit about how your background—growing up in Dhaka and in Bangladesh—has influenced your views on development and how they piqued your interest in those kinds of issues.
AS: How does the ancestral background or the early background of your life affect your work? I wish I knew it and I could analyze it well. I see other people write on it—saying this clearly affected him. I am always interested and respectful of other people’s views about what happened, but I’m not sure I put great confidence in self-analyzing, saying that particular experience led to that particular kind of work. But obviously, I had a happy childhood…. It was a good way of growing up. It’s a problematic country. There’s poverty, there was a famine when I was young, there were riots that took place that came from nowhere and disappeared into nowhere. It affected a lot of people’s lives, a lot of people died and obviously these things did influence me, but I’m not going to pontificate on how each of them had an impact on my work.
TC: You won the Nobel Prize in 1998 and there’s been the criticism that that particular prize is given to people who are not in touch with the real world—with you being the exception. Do you have any thoughts on that?
AS: I don’t take the view that technical work is necessarily irrelevant to the world. I don’t think that’s quite the case. Secondly, I don’t think I am an exception in the sense that if you look at the Nobel citation, most of the paper they refer to… is quite technical. Since the first paper is called “The Necessary and Sufficient Conditions of Binary Consistency of Majority Decision,” I wouldn’t try to sell it as a humanistic work…. I wouldn’t sell it as non-technical work. And thirdly, it is very important to have the motivation to work on problems which are relevant. I don’t know whether I’ve succeeded in doing it, but I’ve certainly tried. I think the main problem arises from the technicality of it.
TC: How has the global economic downturn affected views on development and social welfare?
AS: It depends on what your views were before the crisis. I don’t think many people have been changed at all by the crisis. But I do welcome the fact that some people are re-examining issues and their deep confidence that the market is self-correcting and indeed, basically you can’t do any wrong....
My talk is on Adam Smith today because Adam Smith does discuss exactly that question, and I do in fact talk about Adam Smith and the economic effects of the present crisis with Adam Smith’s 18th century thoughts. It was never Adam Smith’s view to assume that the markets were self-regulating or that you don’t need any institution other than the markets. He thought the markets did a terrific amount of work and he was right. But it can also lead people astray and it leaves a lot of things undone, and I think if you look at the crisis, the causation of the crisis is connected with people being led astray. And the severity of the suffering from the crisis comes also from the fact that, quite often, the institutional structures to supplement the market were very underdeveloped and for ideological reasons which need correcting.
TC: In the course of your career, have you seen more people coming around to your point of view—that economic policies should benefit people and their communities?
AS: Most economists have taken that view throughout their lives. They did not need the crisis to point that out…. Even those that were hard-nosed, market fundamentalists—it was their belief that is the way to serve the people. It’s not the case that they were heartless hyenas, not at all.... We’re talking about correctness and incorrectness, not humanity and inhumanity. I really get upset when people sometimes—and you haven’t done that—sort of refer to matters of heart. Nothing drives me up the pole as much.
No one ever in India or Bangladesh said that, but some guy in England thought I was the Mother Teresa of economics. My God, that absolutely raises my temperature to the boiling point because I think economists didn’t lack a heart—I don’t think that’s quite the case—and secondly, Mother Teresa didn’t do technical work at all and I don’t deny the importance of technical work, and thirdly, she sacrificed her life all the time, which I have not done. I’ve always lived in comfortable quarters with a reasonable salary... without feeling guilty. I’m no schizophrenic. It’s not the motivation thing. We’re talking about whether the market fundamentalists were right or wrong in their theory, that’s what we’re talking about and you cannot solve it by referring the matter to the heart, you have to refer the matter to your head.
Watch the interview online at www.dukechronicle.com.
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