Development as Freedom

by Sen, Amartya

  Adam Smith discussed the need for both kinds of departures. “The most humane actions,” he argued, “require no self-denial, no self-command, no great exertion of the sense of propriety,” since they follow what our “sympathy would of its own accord prompt us to do.”37 “But it is otherwise with generosity.” And so it is with broader values such as justice, which require the person to restrain his self-interest and “make the impartial spectator enter into the principles of his conduct” and may call for “greater exertions of public spirit.”38

  Crucial to Smith’s view of “propriety of humanity and justice” is “the concord between the affections of the agent and those of the spectators.”39 Smith’s conception of the rational person places this person firmly in the company of others—right in the middle of a society to which he belongs. The person’s evaluations as well as actions invoke the presence of others, and the individual is not dissociated from “the public.”

  In this context it is important to dispute the common description of Adam Smith—the father of modern economics—as the single-minded prophet of self-interest. There is quite a well-established tradition in economics (and indeed in general public discussion) of taking Smith to have seen only self-interest in the rational world (and to have been happy with what he had allegedly seen). This is done by choosing some passages—usually one (the baker-brewer-butcher statement, quoted earlier)—from his vast writings. This has given currency to a very distorted view of Smith, which is summarized by George Stigler (otherwise a fine author and economist) as: “self-interest dominates the majority of men.”40

  It is certainly true that Smith did argue in that particular passage, which has been quoted incredibly often (sometimes quite out of context), that we do not need to invoke “benevolence” to explain why the butcher, the brewer or the baker wants to sell his products to us, and why we want to buy his products.41 Smith was clearly right to point out that the motivation for mutually beneficial exchange certainly does not need anything more than what Smith called “self-love,” and this is decidedly important to note, since exchange is so central to economic analysis. But in dealing with other problems—those of distribution and equity and of rule-following for generating productive efficiency—Smith emphasized broader motivations. In these broader contexts, while prudence remained “of all virtues that which is most helpful to the individual,” he explained why “humanity, generosity, and public spirit, are the qualities most useful to others.”42 The variety of motivations that we have reason to accommodate is, in fact, quite central to Smith’s remarkably rich analysis of human behavior. This is very distant from George Stigler’s Smith, and far from the caricature of Smith as the big guru of self-interest. We can say by twisting Shakespeare a little, that while some men are born small and some achieve smallness, Adam Smith has had much smallness thrust upon him.43

  What is at issue here is what our great contemporary philosopher John Rawls has called the “moral powers” shared by us: “a capacity for a sense of justice and for a conception of the good.” Rawls sees the presumption of these shared powers as central to “the tradition of democratic thought,” along with “powers of reason (of judgment, thought, and inference connected with these powers).”44 In fact, the role of values is extensive in human behavior, and to deny this would amount not only to a departure from the tradition of democratic thought, but also to the limiting of our rationality. It is the power of reason that allows us to consider our obligations and ideals as well as our interests and advantages. To deny this freedom of thought would amount to a severe constraint on the reach of our rationality.

  MOTIVATIONAL CHOICE AND EVOLUTIONARY SURVIVAL

  In assessing the demands of rational behavior, it is also important to go beyond the immediate choice of isolated objectives to the emergence and endurance of objectives through their effectiveness and survival. Recent works on the formation of preferences, and the role of evolution in that formation, have tended to broaden very substantially the scope and coverage of rational choice theory.45 Even if ultimately no individual has a direct reason to be concerned with justice and ethics, these considerations may be instrumentally important for economic success, and may, through that advantage, survive better than their rivals, in social rules of behavior.

  This type of “derived” reasoning can be contrasted with behavioral rules being deliberately chosen by an individual through an ethical examination of how one “should” act (as was famously explored, for example, by Immanuel Kant and Adam Smith).46 The ethical reasons for a “direct”—rather than derived—concern for justice and altruism have been pursued in different forms in modern ethical writings as well. Practical ethics of behavior incorporate, in addition to purely moral concerns, various influences of a social and psychological nature, including norms and mores of some complexity.47

  Considerations of justice can be accommodated in our deliberations both for “direct” and for “derived” reasons, and they need not necessarily be seen as “alternatives.” Even if behavioral norms and concerns emerge on ethical or social or psychological grounds, their long-run survival can scarcely be independent of their consequences and of the evolutionary processes that may come into play. On the other side, in studying evolutionary selection within a broad framework, there is no need to confine the admission of non-self-interested behavior only to evolutionary selection, with no independent role of rational deliberation. It is possible to combine deliberative and evolutionary selection of committed behavior within one integrated framework.48

  The values that influence us may emerge in quite different ways. First, they may come from reflection and analysis. The reflections may relate directly with our concerns and responsibilities (as Kant and Smith both emphasized), or indirectly with the effects of good behavior (for example, the advantages of having a good reputation and of encouraging trust).

  Second, they may arise from our willingness to follow convention, and to think and act in ways that the established mores suggest we do.49 This type of “concordant behavior” can extend the reach of reasoning beyond the limits of the individual’s own critical assessment, since we can emulate what others have found reasons to do.50

  Third, public discussion can have a strong influence on value formation. As Frank Knight—the great Chicago economist—noted, values “are established or validated and recognized through discussion, an activity which is at once social, intellectual, and creative.”51 In the context of public choice, James Buchanan has pointed out: “The definition of democracy as ‘government by discussion’ implies that individual values can and do change in the process of decision-making.”52

  Fourth, a crucial role may be played by evolutionary selection. Behavior patterns can survive and flourish because of their consequential role. Each of these categories of behavioral choice (reflective choice, concordant behavior, public discussion, and evolutionary selection) demands attention, and in conceptualizing human behavior there is a case for treating them jointly as well as severally. The role of values in social behavior fits into this broad network.

  ETHICAL VALUES AND POLICY MAKING

  I turn now from the discussion of the ethics and norms of people in general to the values relevant in the making of public policy. Policy makers have two distinct, though interrelated, sets of reasons for taking an interest in the values of social justice. The first—and the more immediate—reason is that justice is a central concept in identifying the aims and objectives of public policy and also in deciding on the instruments that are appropriate in pursuing the chosen ends. Ideas of justice, and in particular the informational bases of particular approaches to justice (discussed in chapter 3), can be particularly crucial for the cogency and reach of public policy.

  The second—more indirect—reason is that all public policies are dependent on how individuals and groups in the society behave. These behaviors are influenced, inter alia, by the understanding and interpretation of the demands of social ethics. For the making of public policy it is
important not only to assess the demands of justice and the reach of values in choosing the objectives and priorities of public policy, but also to understand the values of the public at large, including their sense of justice.

  Since the latter (more indirect) role of juridical concepts is probably more complex (and certainly less often analyzed), it may be useful to illustrate the role that norms and ideas of justice play in the determination of behavior and conduct, and how that can influence the direction of public policy. In discussing the influence of norms of fertility behavior (in chapter 8 and 9), the connection was already illustrated earlier, but I consider now another important example: the prevalence of corruption.

  CORRUPTION, INCENTIVES AND BUSINESS ETHICS

  The prevalence of corruption is rightly regarded as one of the major stumbling blocks in the path to successful economic progress, for example in many Asian and African countries. A high level of corruption can make public policies ineffective and can also draw investment and economic activities away from productive pursuits toward the towering rewards of underhanded activities. It can also lead—as was discussed earlier—to the fostering of violent organizations such as the Mafia.

  Corruption is not, however, a new phenomenon, nor are proposals for dealing with it. Ancient civilizations provide evidence of widespread illegality and corruption. Some produced considerable literature on ways of reducing corruption, especially of public officials. Indeed, we can get from this historical literature some insight on ways of preventing corruption today.

  What, then, is “corrupt” behavior? Corruption involves the violation of established rules for personal gain and profit. Obviously it cannot be eradicated by inducing people to be more self-interested. Nor would it make sense to try to reduce corruption simply by asking people to be less self-interested in general—there has to be a specific reason to sacrifice personal gain.

  It is, to some extent, possible to alter the balance of gains and losses from corrupt behavior through organizational reform. First, systems of inspection and penalty have figured prominently, through the ages, in the proposed rules for preventing corruption. For example, the Indian political analyst Kautilya, in the fourth century B.C., carefully distinguished between forty different ways in which a public servant can be tempted to be financially corrupt and described how a system of spot checks followed by penalties and rewards could prevent these activities.53 Clear systems of rules and penalties, along with rigorous enforcement, can make a difference to behavior patterns.

  Second, some regulational regimes encourage corruption by giving discretionary power to the officers who can grant favor to others—businessmen in particular—that may be worth a lot of money to them. The overcontrolled economy (the “license Raj,” as the system is called in India) is an ideal breeding ground for corruption, as the experience of South Asia particularly demonstrates. Even if such regimes were not counterproductive in other respects as well (as they frequently are), the social cost of corruption can be reason enough to shun such arrangements.

  Third, the temptation to be corrupt is strongest when the officers have a lot of power but are themselves relatively poor. This is the case at lower levels of administration in many overcontrolled economies, and explains why corruption reaches down all the way in the bureaucratic system, encompassing petty officers as well as senior administrators. Partly to deal with this problem, many bureaucrats in ancient China were paid a “corruption-preventing allowance” (called yang-lien) to give them incentive to remain clean and law-abiding.54

  These and other inducements can have effectiveness, but it is hard to make the prevention of corruption turn entirely on financial incentives. Indeed, each of the three lines of attack just outlined has its own limitation. First, systems of catching thieves often do not work, since supervision and inspection are not always effective. There is also the complex issue of providing the right incentives for thief-catchers (so that they are not bought off). Second, any system of governance cannot but give some power to the officers that is worth something to others who may try to offer inducements for corruption. The reach of such power can certainly be reduced, but any substantive executive power can be potentially open to abuse. Third, even rich officers often try to make themselves richer still, and do so at some risk, which may be worth it if the stakes are high. There have been plenty of examples of this in recent years from different countries.

  These limitations should not prevent us from doing what can be done to make the organizational changes effective, but an exclusive reliance on incentives based on personal gain cannot fully eliminate corruption. Indeed, in societies in which corrupt behavior of the standard type is quite unusual, the reliance is, to a great extent, on compliance with codes of behavior rather than on financial incentive to be noncorrupt. This forces attention on the norms and modes of behavior that respectively prevail in different societies.

  Plato suggested in the Laws that a strong sense of duty would help to prevent corruption. But he also noted, wisely, that this would be “no easy task.” What is at issue is not just the general sense of dutifulness, but the particular attitude to rules and conformity, which has a direct bearing on corruption. All this comes under the general rubric of what Adam Smith called “propriety.” Giving priority to rules of honest and upright behavior can certainly be among the values that a person respects. And there are many societies in which respect for such rules provides a bulwark against corruption. Indeed, intercultural variations in rule-based behavior are among the most striking diversities in the contemporary world, whether we contrast business modes between Western Europe and South or Southeast Asia, or (within Western Europe) between Switzerland and parts of Italy.

  Modes of behavior are not, however, immutable. How people behave often depends on how they see—and perceive—others as behaving. Much depends, therefore, on the reading of prevailing behavioral norms. A sense of “relative justice” vis-à-vis a comparison group (in particular, others similarly placed) can be an important influence on behavior. Indeed, the argument that “others do the same” was one of the more commonly cited “reasons” for corrupt behavior found in the Italian parliamentary inquiry that looked into the linkage between corruption and the Mafia in 1993.55

  The importance of imitation—and of following established “conventions”—has been emphasized by those commentators who felt moved to study the bearing of “moral sentiments” on social, political and economic life. Adam Smith noted:

  Many men behave very decently, and through the whole of their lives avoid any considerable degree of blame, who yet, perhaps, never felt the sentiment upon the propriety of which we found our approbation of their conduct, but acted merely from a regard to what they saw were the established rules of behaviour.56

  In the reading of “established rules of behaviour,” importance may be particularly attached to the conduct of people in positions of power and authority. This makes the behavior of senior civil servants especially important in installing norms of conduct. Indeed, writing in China in 122 B.C., the authors of Hui-nan Tzu put the problem thus:

  If the measuring line is true, then the wood will be straight, not because one makes a special effort, but because that which it is “ruled” by makes it so. In the same way if the ruler is sincere and upright, then honest officials will serve in his government and scoundrels will go into hiding, but if the ruler is not upright, then evil men will have their way and loyal men will retire to seclusion.57

  There is, I believe, sense in this piece of ancient wisdom. Corrupt behavior in “high places” can have effects far beyond the direct consequences of that behavior, and the insistence on starting at the top does have reasoning behind it.

  I am not trying to propose here an “algorithm” for eliminating corruption. There are grounds for paying special attention to the possibility of altering the balance of gains and losses through organizational reforms such as those discussed earlier. But there is also room for addressing the climate of norms and
behavioral modes, in which imitation and a sense of “relative justice” can play an important part. Justice among thieves may not look like “justice” to others (just as “honor among thieves” may not seem particularly honorable), but it certainly can have that appearance to the protagonists.

  For a fuller understanding of the challenge of corruption, we have to drop the presumption that only personal profits move people, and values and norms simply do not count. They do count, as is well illustrated by the variation of behavioral modes in different societies. There is room for change, and some of it can cumulate as well as disseminate. Just as the presence of corrupt behavior encourages other corrupt behavior, the diminution of the hold of corruption can weaken it further. In trying to alter a climate of conduct, it is encouraging to bear in mind the fact that each vicious circle entails a virtuous circle if the direction is reversed.

  CONCLUDING REMARKS

  This chapter began with scrutinizing some arguments for skepticism of the idea of reasoned social progress—an idea that is quite central to the approach presented in this book. One argument questions the possibility of rational social choice, invoking in particular Kenneth Arrow’s well-known “impossibility theorem.” It turns out, however, that what is at issue is not the possibility of rational social choice, but the use of an adequate informational base for social judgments and decisions. That is an important understanding, but it is not a pessimistic one. Indeed, the critical role of informational bases was discussed in earlier chapters as well (particularly in chapter 3), and the issue of adequacy has to be appropriately assessed in that light.

  The second argument expresses skepticism of thinking in terms of intended consequences and focuses instead on the overwhelming importance of “unintended” effects. There is something to be learned from this skepticism as well. However, the main lesson is not the futility of rational assessment of social options, but the need to anticipate the unintended but predictable consequences. It is a question of not being overwhelmed by the force of intention, and also of not ignoring the so-called side effects. The empirical illustrations—several of them from the experiences of China—indicate why the failure is not one of causal untractability, but of sticking to a partial vision. Sensible reasoning has to demand more.