[Marxism] My Article on A. K. Sen's 'Snakes and Ladders'

Louis Proyect lnp3 at panix.com
Sat Feb 4 06:44:54 MST 2012

Sudipta, I am not sure why your article came into the list as one big 
paragraph, but I have reformatted it in order to make it easier for 
comrades to read and respond to. Next time, you might want to send an 
article like this to me first so we can make sure there are no 
formatting problems.

Your valuable feedback plz.
Sudipta Bhattacharyya


Neo-liberalism looks Misty through Amartya Sen’s ‘Snakes and 
Ladders’Wed, 2012-02-01 09:54 | Sudipta Bhattacharyya

Professor Amartya Sen in recent lecture ‘Snakes and Ladders’ compared 
the performances of Europe, China and India. He pointed out that the 
economic policy of ‘austerity’ pushed the developed world ‘into the 
mouth of a fairly hefty snake’. On the other hand though India’s 
experiment about democracy is relatively successful, there is an abysmal 
inequality prevails; so much so that it’s social development indicators 
are not only below China, but also below Bangladesh. To save developed 
and developing world including India from ‘hefty snakes’, state should 
ensure education and health security and it should act as the ‘social 
mediator’. Having broad consensus with Sen, I would like to put forward 
some important disagreements as below.

Austerity is a Symptom; Neo-liberalism is the Disease

First of all Sen did not mentioned about the ideology based on which the 
developed world had adopted the path of austerity. According to Sen 
after the Second World War a ‘huge effective welfare state system’ did 
emerge and ‘those were the glory days of Europe’. In our view there are 
at least two reasons for the emergence of ‘welfare state system’ – (i) 
the great economic depression of 1929-33 and (ii) success of the Soviet 
socialist economy. As a thrust of both these factors, the capitalist 
world entered into a phase of welfare state system in the hands of 
Keynes. However, welfare state was never more than a bitter pill for the 

According to Kalecki as an economy is approaching full-employment by 
means of state led deficit financing, the corporate control of economy 
and society will be loosen. This is why during the ‘golden age’ of 
welfare state system, the pro-market and state withdrawal theory namely 
‘Monetarism’ led by Milton Friedman emerged, which were slowly and 
silently encroaching the academic and policy making space. Later on it 
evolved into neo-liberalism that ultimately discarded the welfare state.

The neo-liberal policy of austerity imposed on USA and UK during the 
respective regimes of Ronald Reagan and Margaret Thatcher in 1980s. The 
developing nations also tied with the same policy through structural 
adjustment lending of IMF and World Bank. Though this policy of 
austerity curtailed expenditure on health and education of the masses, 
it opened up a door of huge subsidy and allowances for corporate. Sen 
detects austerity as the disease, while it is merely a symptom. The real 
disease is nothing but neo-liberalism that Sen did not diagnose.

India: Austerity and High Growth Bubble.

Secondly, I do not subscribe with Sen that India ‘have not chosen the 
austerity route’. Since the neo-liberal reform started inIndia in 1991, 
the then Prime Minister Narasimha Rao and the Finance Minister Dr. 
Manmohan Singh appealed Indian people to tolerate austerity for 
‘nation’s interest’. As a part of the austerity the subsidies in food 
and fertilizer were curtailed. There was a reduction in institutional 
rural credit for the poor and there was a resurrection of moneylenders. 
The expenditure of rural development to GDP declined from 3.8% to 1.9% 
during the first decade of neo-liberal reform.

Thirdly there is a shadow of Neo-liberalism in Sen’s analysis ‘economic 
growth of Gross National Product contributes to development not merely 
through raising the incomes of people, but very powerfully through 
generating public revenue’. Though Sen accepted that the beneficiaries 
of this growth are ‘a fairly small minority’ and ‘in contrast …for other 
Indians – many more in fact – who have various deprivations’. Sen did 
not give any empirical estimate about the percentages of beneficiaries 
and deprived. Arjun Sengupta Committee in recent past gave an estimate 
that 77% of the Indians have income less than Rs.20 per capita per day. 
Amartya Sen remained mum about the fact that India’s high growth rate is 
largely service led.

Agricultural growth rate fell below the population growth rate in India 
since 1991 that never happened after independence. In many post reform 
years this rate moved below zero. More than a quarter of million 
indebted farmers committed suicide after not receiving appropriate price 
for their product particularly for commercial crops. On the other hand 
industrial sector is also undergoing a secular stagnation since 1995. 
Therefore the high growth rate of the Indian economy is nothing but a 
‘synthetic’ bubble woven by corporate subsidy and pay commission salary 
hike for a few rich and upper middle classes.

Sen miserably skipped the point that this so-called high growth rate is 
entirely jobless. For last one decade or more employment grew less than 
1% per annum while economy as whole expanded around 7-8%. In other words 
a small class benefited from the neo-liberal high growth rate that makes 
the majority people deprived. Deprivation of many and benefit of a small 
are two sides of a same coin. Therefore bypassing the central question 
of interclass redistribution of wealth and means of production how the 
‘capabilities’ can be attained is not at all clear. Also it is not at 
all understandable why and how the neo-liberal state would make ‘more 
vigorous social mediation’ for the deprived.

Indian Democracy - How far is it Successful?

Fourthly, Amartya Sen claimed that the ‘democracy in India’ has been 
‘largely successful practice’, since ‘(T)he interest in political and 
social participation seems to stretch even to the poorest parts of the 
Indian population’. In reality whoever formed the central government 
since 1991, be it Congress, BJP or United Front; they acted as some 
architect and agent of neo-liberalism.

It’s interesting to note that most of them came to power banking on 
anti-liberalization slogan. Even Congress Election Manifesto of 1991 did 
not utter a single word in favour of forthcoming neo-liberal reforms. 
After the independence Indians witnessed the greatest political 
instability in one decade since 1991 where there were a highest number 
of changes in Government and Prime-Ministers. It is assumed that Indian 
people gave their verdict against neo-liberalism and toppled the 
government but they could not get rid of neo-liberalism. However, it is 
also a fact that the political instability declined in 2000s. UPA-I 
government had to shelve its neo-liberal package under the Left 
pressure. At the same time they were compelled to introduce some state 
interventionist policies like MREGA, Mid Day Meal, waiving of 
agricultural credit etc. As a response to utterly inadequate and very 
limited interventionist policies people elected UPA for the second time 
in 2009. As a matter of fact while the government introduced MREGA, they 
stopped all other employment generation programme.

Though neo-liberalism had structurally excluded the majority of people, 
perhaps Sen believes that if the excluded people can be extended state 
assistance within the existing structure one will find human face of 
neo-liberalism. But according to the present author neo-liberalism 
cannot have any human face.

Ref. Amartya Sen (2011), Snakes and Ladders, Website 
(Last visited 31.01.2012)

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