Cambridge Professor Amartya Sen was awarded the Nobel Prize in economics for his work on welfare economics and the causes of famine. He discusses the economics of poverty with Phil Ponce.
PHIL PONCE： Joining me is Amartya Sen， this year's Nobel Laureate for Economics. According to the Nobel citation， Professor Sen is recognized for his work in welfare economics and understanding poverty， inequality， and famine. He currently heads Trinity College in Cambridge， England.
PHIL PONCE： Welcome， Professor， and congratulations！
AMARTYA SEN： Thank you very much.
Studying “the way the lives of people go.”
PHIL PONCE： Professor， when one thinks of the field in which Nobel winners in economics often work， it's oftentimes something like money， markets， the capital， and yet you seem to be more interested in how events affect people. Why is that？
AMARTYA SEN： Well， economics is a very broad subject， and the money and capital and the operation of the stock market， these are matters of interest to economists， as well as matters of - the way the lives of people go， and I happen to be concerned primarily with the latter and in particular with the down side of the latter， namely the people who seem to have a worse time than others - the poor， the unemployed， the hungry， the starving， and so on. So this has been something I've been concerned with for a long time.
PHIL PONCE： Professor， one of the specific issues that the Nobel citation talks about is your interest in understanding famine， and it says that your best-known work has to do with understanding that famine isn't just caused by a shortage of food but by other things like unemployment， drop in income. Why the specific interest in famine？
AMARTYA SEN： Well， there are many reasons， of course， because famines are unfortunately still a real phenomenon in the world. And lots of people die from it， systematically， in different parts of the world， but in my case the personal interest arose also from the fact that I happen to observe from inside a major famine of the 20th century - the Bengal famine， which occurred in Indian in 1943 - in fact， the last famine that occurred in India， in which close to 3 million people died. And I was a nine-and-a-half-year-old boy at that time. It had very impressionable - certainly very striking memories I have from that period， and the people who starved， they came from a particular group —— in this care rural laborers —— but that's characteristic I later found of many famines， indeed， sometimes food supply may fall， sometimes not. Food supply fell in the Irish famine of the 1840's. It did not fall in the Bengal famine of '43， and it was at a peak height in the Bangladesh famine of '74. But a section of the community lose their ability to command food by not having jobs - not having enough wage and then they cannot buy food and that's what happened —— not a really large proportion usually —— but it can still kill millions of people.
PHIL PONCE： According to a report that I read， you personally， when you were a boy， personally fed people who were starving refugees
AMARTYA SEN： Well， my parents - you know - since we relatively prosperous， still not rich， lower middle class family -still not rich —— a lower middle class family - but quite committed on social matters and come from an academic background. My father was a professor； my grandfather was a professor - we were quite involved in that so I was committed to give anyone who asked for food， a tin， a cigarette tin of rice. But since there are many people asking， I was also told that that's what I could give to anyone. I obviously felt very moral in trying to give as much as I could. And it's a very harrowing experience. Obviously， this didn't do anything to solve the famine， but it's a question that got even more strongly engrained in my mind because of the small participation that I happened to do in this context.
An opportunity to highlight the work of others.
PHIL PONCE： Professor， what does winning this prize mean to you personally？
AMARTYA SEN： Well， I was particularly pleased that the prize was given with the citation about social - about welfare economics and social choice because these are areas in which very interesting， very important work has occurred， and I'm very proud of what others have done and I've learned from them. I think I was led on to that subject by Kenneth Arrow —— a great figure in modern economics. And I had very good students and very good colleagues working in this area. So when they mentioned this area， I took that to be a recognition of the importance of that area， and even though I was lucky enough to get the prize， I did think that it was a much wider recognition and in the way it tried to be more appropriate and fair， if the prize was widely shared. But many people have contributed in this area， and this gives me an opportunity to think about them and to the extent to which my own work has been influenced by and dependent on the work that others have done.
Have people lost faith in economics？
PHIL PONCE： Professor， there is this world economic crisis， a lot of turmoil in the markets， and it's adding a lot of new people to poverty， millions of people. How much do economists know？ How much can economists explain what is happening now？
AMARTYA SEN： I think economists - if they set their mind to it - can explain a lot. You know， I think it's really a question of concentrating， the questions - the inquiries —— appropriately. We know the nature of the success that some of these economies - for example， the East Asian economies， which are in turmoil now， had. We know the basis of their success， which included using the market mechanism efficiently but open-mindedly， non-dogmatically， letting the government do its job in expanding educational base， doing land reform， helping with the health care. It's a partnership of the public and market arrangement. Now they did not work out pretty well. The financial regularities and there were a lot of lacunae and some of the economies there like Indonesia it didn't work out， what would happen if the economy were to go into a slump， namely， how to deal with those who've been thrown out of the system and given to the wolves， and the kind of social safety net that you need didn't exist. There's a lot to learn from the experience of these countries， both positively as to what they have achieved， as well as negatively as to what to avoid. So I think economists - if they analyze these issues - will have various things to offer. And， indeed， there are a lot of economists who are interested in it. And I would not accept that economists really don't have very much to say on this question.
PHIL PONCE： Professor， do you think people have lost faith in economists because of the current world financial crisis？
AMARTYA SEN： Well， you know， I think the - economics is not a kind of business whereby you could eliminate these problems. You know， it's - odd thing is that earlier on in late 19th century and early 20th century —— one of the subjects people studied was business cycle. From time to time you have slump， and at times you have boom. The job of the economist was meant to be to understand why they are caused， rather than to eliminate them. Now I think it would be nice to eliminate them and， indeed， it is possible certainly to reduce them and eliminate it to a great extent. But the fact that sometimes these things would happen does not indicate that these times of economics is worth nothing. What it does indicate is that we have to pay much more attention than often happens to some of these problems， and since I've spent most of my life on the side of economics， I'm very sympathetic to the view that the economy should spend more time in dealing with the predicament of people who are thrown into turmoil when things go wrong， and also the fact that while there are successes of market economies， there are also needs for supplementation in other fields in terms of public intervention， in terms of political participation， and so forth. So it's a question of taking an adequately broad view of economics， along with its neighboring discipline， and it's also a question of paying more attention to those who are most likely to lose when a crisis hits.
PHIL PONCE： Professor Sen， thank you very much. And， again， congratulations.
AMARTYA SEN： Thank you very much.
PHIL PONCE： Joining me is Amartya Sen， this year's Nobel Laureate for Economics. According to the Nobel citation， Professor Sen is recognized for his work in welfare economics and understanding poverty， inequality， and famine. He currently heads Trinity College in Cambridge， England.
PHIL PONCE： Welcome， Professor， and congratulations！
AMARTYA SEN： Thank you very much.
Studying “the way the lives of people go.”
PHIL PONCE： Professor， when one thinks of the field in which Nobel winners in economics often work， it's oftentimes something like money， markets， the capital， and yet you seem to be more interested in how events affect people. Why is that？
AMARTYA SEN： Well， economics is a very broad subject， and the money and capital and the operation of the stock market， these are matters of interest to economists， as well as matters of - the way the lives of people go， and I happen to be concerned primarily with the latter and in particular with the down side of the latter， namely the people who seem to have a worse time than others - the poor， the unemployed， the hungry， the starving， and so on. So this has been something I've been concerned with for a long time.
PHIL PONCE： Professor， one of the specific issues that the Nobel citation talks about is your interest in understanding famine， and it says that your best-known work has to do with understanding that famine isn't just caused by a shortage of food but by other things like unemployment， drop in income. Why the specific interest in famine？
AMARTYA SEN： Well， there are many reasons， of course， because famines are unfortunately still a real phenomenon in the world. And lots of people die from it， systematically， in different parts of the world， but in my case the personal interest arose also from the fact that I happen to observe from inside a major famine of the 20th century - the Bengal famine， which occurred in Indian in 1943 - in fact， the last famine that occurred in India， in which close to 3 million people died. And I was a nine-and-a-half-year-old boy at that time. It had very impressionable - certainly very striking memories I have from that period， and the people who starved， they came from a particular group —— in this care rural laborers —— but that's characteristic I later found of many famines， indeed， sometimes food supply may fall， sometimes not. Food supply fell in the Irish famine of the 1840's. It did not fall in the Bengal famine of '43， and it was at a peak height in the Bangladesh famine of '74. But a section of the community lose their ability to command food by not having jobs - not having enough wage and then they cannot buy food and that's what happened —— not a really large proportion usually —— but it can still kill millions of people.
PHIL PONCE： According to a report that I read， you personally， when you were a boy， personally fed people who were starving refugees
AMARTYA SEN： Well， my parents - you know - since we relatively prosperous， still not rich， lower middle class family -still not rich —— a lower middle class family - but quite committed on social matters and come from an academic background. My father was a professor； my grandfather was a professor - we were quite involved in that so I was committed to give anyone who asked for food， a tin， a cigarette tin of rice. But since there are many people asking， I was also told that that's what I could give to anyone. I obviously felt very moral in trying to give as much as I could. And it's a very harrowing experience. Obviously， this didn't do anything to solve the famine， but it's a question that got even more strongly engrained in my mind because of the small participation that I happened to do in this context.
An opportunity to highlight the work of others.
PHIL PONCE： Professor， what does winning this prize mean to you personally？
AMARTYA SEN： Well， I was particularly pleased that the prize was given with the citation about social - about welfare economics and social choice because these are areas in which very interesting， very important work has occurred， and I'm very proud of what others have done and I've learned from them. I think I was led on to that subject by Kenneth Arrow —— a great figure in modern economics. And I had very good students and very good colleagues working in this area. So when they mentioned this area， I took that to be a recognition of the importance of that area， and even though I was lucky enough to get the prize， I did think that it was a much wider recognition and in the way it tried to be more appropriate and fair， if the prize was widely shared. But many people have contributed in this area， and this gives me an opportunity to think about them and to the extent to which my own work has been influenced by and dependent on the work that others have done.
Have people lost faith in economics？
PHIL PONCE： Professor， there is this world economic crisis， a lot of turmoil in the markets， and it's adding a lot of new people to poverty， millions of people. How much do economists know？ How much can economists explain what is happening now？
AMARTYA SEN： I think economists - if they set their mind to it - can explain a lot. You know， I think it's really a question of concentrating， the questions - the inquiries —— appropriately. We know the nature of the success that some of these economies - for example， the East Asian economies， which are in turmoil now， had. We know the basis of their success， which included using the market mechanism efficiently but open-mindedly， non-dogmatically， letting the government do its job in expanding educational base， doing land reform， helping with the health care. It's a partnership of the public and market arrangement. Now they did not work out pretty well. The financial regularities and there were a lot of lacunae and some of the economies there like Indonesia it didn't work out， what would happen if the economy were to go into a slump， namely， how to deal with those who've been thrown out of the system and given to the wolves， and the kind of social safety net that you need didn't exist. There's a lot to learn from the experience of these countries， both positively as to what they have achieved， as well as negatively as to what to avoid. So I think economists - if they analyze these issues - will have various things to offer. And， indeed， there are a lot of economists who are interested in it. And I would not accept that economists really don't have very much to say on this question.
PHIL PONCE： Professor， do you think people have lost faith in economists because of the current world financial crisis？
AMARTYA SEN： Well， you know， I think the - economics is not a kind of business whereby you could eliminate these problems. You know， it's - odd thing is that earlier on in late 19th century and early 20th century —— one of the subjects people studied was business cycle. From time to time you have slump， and at times you have boom. The job of the economist was meant to be to understand why they are caused， rather than to eliminate them. Now I think it would be nice to eliminate them and， indeed， it is possible certainly to reduce them and eliminate it to a great extent. But the fact that sometimes these things would happen does not indicate that these times of economics is worth nothing. What it does indicate is that we have to pay much more attention than often happens to some of these problems， and since I've spent most of my life on the side of economics， I'm very sympathetic to the view that the economy should spend more time in dealing with the predicament of people who are thrown into turmoil when things go wrong， and also the fact that while there are successes of market economies， there are also needs for supplementation in other fields in terms of public intervention， in terms of political participation， and so forth. So it's a question of taking an adequately broad view of economics， along with its neighboring discipline， and it's also a question of paying more attention to those who are most likely to lose when a crisis hits.
PHIL PONCE： Professor Sen， thank you very much. And， again， congratulations.
AMARTYA SEN： Thank you very much.