The HINDU (Lead Stories)
Thursday, October 15, 1998

Amartya Sen wins Nobel Prize
By Thomas Abraham

LONDON, Oct. 14.

Professor Amartya Sen (65), the distinguished economist who is best known for his work on poverty and famine, has been awarded this year's Nobel Prize for Economics. The award was welcomed by other economists as a richly deserved recognition for both Prof. Sen's work, and for the field of development economics, which has been overlooked in recent years by the Nobel prize committee.

The committee cited Prof. Sen for his contributions to welfare economics, and said that his work was marked by ``a particular interest in the most impoverished members of society.'' The $960,000 prize will be presented later this year.

Prof. Sen was appointed Master of Trinity College, Cambridge, earlier this year, before which he was Professor of Economics and Philosophy at Harvard University. He has held professorships at Oxford University, the London School of Economics, Delhi, and Jadavpur Universities.

He has become the sixth Indian, either by birth or citizenship to receive the Nobel Prize. The earlier Indian Nobel laureates have been Rabindranath Tagore (literature), Prof. C. V. Raman (Physics), Prof. S. Chandrasekhar (Physics), Dr. Hargobind Khurana (Medicine) and Mother Teresa (Peace). Prof. Sen received his B.A. from Presidency College, Calcutta, before joining Trinity College, Cambridge, where he received his doctorate.

Prof. Sen was away in New York when news of the award came. But his colleagues at Trinity College were jubilant. ``It's great news, and its entirely proper that he should have got the award,'' said Prof. James Mirrlees, the 1996 Nobel laureate for Economics. Prof. Sen has long been regarded as a front runner for the prize, and Prof. Mirrlees pointed out that he and his colleagues were ``not totally surprised'' at the news. ``I hope India will celebrate this.''

There was also satisfaction that the Nobel committee had broken with its tradition of the past few years and given the prize to an economist working on poverty and development, rather than in areas related to the working of the financial markets. ``The prize has tended to go to people working on market economics, rather than people who have taken a larger view of economics and looked at development issues as well as the social underpinnings of economics,'' said Dr. S. K. Rao, a former professor of economics who is now with the Commonwealth Secretariat. ``Prof. Sen is an economist who has focussed on the relevance of economics in ending poverty and income inequality.'' Another researcher at the London School of Economics expressed the same sentiment: ``what a great day for development economics.'' The most recent occasion that the Nobel prize has gone to development economists was in 1979, when Mr. Theodore Schultz and Mr. Arthur Lewis were given the award ``for their pioneering research into economic development with particular consideration of the problems of developing countries.''

The change in emphasis is clearly brought out by the contrast between Prof. Sen's work and the work done by last year's Nobel laureates. Last year Prof. Robert C. Merton, of Harvard University, and Prof. Myron S. Scholes, of Stanford University, won the prize for developing a formula for valuing stock options. They later went on to join the board of the ill fated hedge fund Long Term Capital Management, where their valuation method was used to place speculative bets in the world's financial markets. After a series of bets went wrong, the hedge fund had be rescued with a $3.6- billion bailout.

Prof. Sen `surprised and pleased' Prof. Sen reacting to the news said he was thrilled mainly because the subject he explores, welfare economics, deserves more recognition.

In an interview this morning in Manhattan, Prof. Sen said ``I was surprised and quite pleased when I got the call from the Royal Academy. But I was even more pleased when they told me the subject matter was welfare economics, a field I have long been very involved in. I am pleased that they gave recognition to that subject.''

Prof. Sen, who was born in Santiniketan in Bengal in 1933 and was nine when he witnessed the devastating effects of the 1943 famine said some famines have less to do with food supply than with simple economics. ``Famines can occur even when the food supply is high but people cannot buy the food because they don't have the money,'' he said. ``There has never been a been a famine in a democratic country'' because leaders of those nations are spurred into action by politics and a free media, he said. In undemocratic countries, the rulers are unaffected by famine ``and there is no one to hold them accountable, even when millions die.''

Prof. Sen flew to New York last night to attend tomorrow's memorial service for Mahbub-ul-Haq, a former Finance Minister of Pakistan and the architect of the annual human development index, used by the U.N. to measure the wealth of nations by citizens' living standards. The two were students together at Cambridge and longtime friends. Haq died in July of pneumonia.

``My happiness at getting the prize is tempered by this sad occasion,'' Prof. Sen said. ``I know he would have been very pleased to see me get the prize. I miss him a lot.'' Prof. Sen said he hoped to spend the portion of the Nobel Prize money that won't be paid in taxes ``on something good.''