Development as Freedom [Paperback]

Sen points out that markets are not simply a means to an end but rather a fundamental freedom. All people want to enter into exchanges with others, and this is how people everywhere behave unless they are prevented from doing so. Sen shows that markets are not an expression of rapacious self-interest but rather are dependent on virtues such as trust and rectitude. Seen in this light, market exchanges are an expression of deep human needs. Yet Sen realizes that markets have limitations and he argues for non-market decisions to optimally provide for education, health care, protection of the environment, and prevention of the grossest inequalities in income distribution.

As an illustration of the interrelationships between the different types of freedoms, and between these freedoms and economic outcomes, Sen explains the Asian economic crises of the late 1990s as partly a result of a lack of transparency: that is, a lack of public participation in reviewing financial and business arrangements. Had they been able to, members of the public likely would have demanded greater transparency and the crises might have been averted; however, authoritarian political arrangements prevented effective demands for transparency. And, once the crises struck, the response of governments in the region was inadequate. Had these governments been democratically accountable, they would have responded more quickly and forcefully to boost employment and otherwise cushion the impact of the crises on the poorest members of their societies.

Sen, the winner of the 1998 Nobel Prize in economic science, has aimed this work at a general audience. For specialists, though, the book offers an extended discussion of methodological issues introduced by Sen's view of development as freedom, more than 50 pages of end notes, and an index of names and subjects. This book will be an adventure for readers interested in the greatest problem us at the outset of the 21st century: how can the poorest people in the world live better lives?

In a clear departure from the main stream of economic thoughts that concern with achieving economic well-being for individuals, Sen, however, contends that freedom of individuals - economic and political freedom and civil liberties, should not be divorced from economic well-being. In fact, he believes freedom should be the principal goal of economic development as well as as the principal mean to counter poverty and insecurity. Freedom and development, rather than being hostile to each other, actually reinforce and complement one another to achieve economic prosperity and ultimately freedom for all. Democracy is not a luxury whereby only rich or developed nations can splurge, but should be seen as an end per se as well as a guiding force to foster and promote economic development and individual freedom.

Clearly, Sen is up against most economists who confine themselves to only measuring individual well-being in economic terms like GDP per capita and neglect the non-economic factors like freedom of speech and press freedom. Sen, instead, attaches great importance to freedom. He believes the goal of achieving freedom need no justification and every society should also work towards achieving it regardless of whether it promotes economic development.

The book on the whole provides much insights to what we usually known as economic development and how we should see it in the light of freedom for individuals. Though I may not totally agree with his analysis, I am sure that I will not see the issue of development and freedom the same as before.

As to the economic theories themselves: just plain brilliant. Who says that economists have no common sense? This book just made complete and utter... sense! I just sat there shaking my head, because sentence after sentence was phrased in just a way to make it so obvious that I wondered why I had never thought of it... and why those who have the power to listen to this book don't do something about it.

I recomend this book to anyone who is interested in the state and the future of developing economies. Frankly, this should cover everyone who lives in North America and Western Europe because (as Sen shows) what affects horribly impoverished people on the other side of the globe affects us too. No knowledge of economics is required (though you might find Google helpful ;-) ), but an open mind and a modicum of common sense is necessary.