Amartya Sen and his economic theories

Famine doesn`t need to occur when food supply is low. It can even occur when food supply is high enough, but the people are unable to buy it because they don`t have any money. (this kind if starvation suffered by people is prominent in many countries, like India, who doesn`t lack food, but people lack money)

Famines have never happened in (modern) democratic countries because the leaders of such nations are spurred into action by free-media and political reasons to save their citizens. But in undemocratic nations there won`t be anyone to hold the rulers accountable for their actions when millions die of famine (if, of course, the rulers neglect the disaster).

Poverty shouldn`t necessarily be measure by the share of population under the poverty line because then it wouldn`t show the improvments made if for example the poor people of the country got higher wages which still were under the poverty line. Therefore Sen has himself created an formula which can more precisely measure the poverty in a society. The formula is

P = H · [I + (1 - I) · G]

Where P is poverty, H is the share of the population under poverty, and G is something called the Gini coefficient, which is the measuring of the degree of income inequality and I is the distribution of income. G and I only regard people in poverty and leaves out those above the line. (This formula therefore enables to measure the degree of poverty in a society and gives us a deeper look of how everything is).

Sen has also created a formula to measuring welfare in a society, a contraire to the indicators like income per capita, which measures average salary of the society (measuring average salary gives often a false picture of reality, as people may have enormous salaries, while people in poverty may have many times lower). The formula is :

y · (1 - G)

Here y is the income per capita and G is the Gini coefficient, which`s explained above. Sen explains that welfare in a society has many factors, not just the income. Income creates good oppurtunities for the welfare, but things like health are equally important. (of course one will automatically presume that a place where everyone has good income normally also has people with good health, but that`s not always the case). The UNDP welfare indicator is one who takes all these factors into account, living standard is measured by income per capita, life expectancy and literacy. Therefore it gives a good pinpoint of the welfare in a society.

The Press Release of the Royal Swedish Academy gives good explanation of Sen`s theories.

Here are some extra links writings by Amartya Sen :

Autobiography of Amartya Kumar Sen (short form)

Tagore and His India by Professor Sen

Amartya Sen, recieving the Nobel Prize from the Swedish King. Picture credit to http://www.nobel.se, the Nobel Prize site.

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