Zaman – Hunger as the Primary Economic Problem
By Asad Zaman
Many concerned citizens discussing global economic problems would place priority on the problem of feeding the hungry. Strangely, this is not the focus of standard economic theory courses at any of the leading universities throughout the world. This is due to two major mistakes in formulation of conventional economic theories as currently taught.
The first mistake is the idea that the goal of an economic system is the production of wealth, broadly defined. For example, Adam Smith takes the fundamental economic problem to be the production of wealth. The maximization of GNP per capita is currently the core of economic growth theory. The value of human life can be evaluated in terms of how much wealth the human can produce. This also accounts for the use of the degrading term “human resource”. Humans are on par with other resources, like factories and machines, as inputs to the production process.
A revolution in economic theory would result if we consider that the goal of an economic system is to increase human welfare. Wealth is important only to the extent that it can bring about increases in human welfare, broadly understood in terms of all dimensions of life which contribute to our collective well-being. In conjunction with wealth, many other types of invisible inputs, such as social capital, cultural norms, and institutional structures, also play an important role. In particular, providing food to the hungry is clearly the single most important and universal invariant in the production of human welfare. A fundamental economic problem is therefore to study how to use a given amount of wealth to produce the maximum amount of welfare.
The second mistake, engendered by the first, is the idea that investment in physical capital is the main source of growth and development. Mahbubul Haq pioneered the replacement of GNP by the Human Development index. Similarly, Amartya Sen in his book Development as Freedom, argues that progress is about the development of human capabilities. The United Nations now defines development as the ability “to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community” (p.9 of Human Development Report 2001) Of course, food is the sine-qua-non of human development. Many factors not usually considered by economists also play an important role in improving quality of life. The importance of trust, cooperation, culture and communities is gradually gaining recognition as important contributors to welfare.
A revolution in planning for growth would result from taking seriously the idea that humans being have far more capabilities and potential than any kind of machine. Given the right environment and training, all children have tremendous potential. It is our collective task to ensure that all children get the opportunity to develop this potential. The economic system is valuable only as a means to achieving this goal. Providing basic necessities like food, healthcare, and education is actually the most valuable investment we can make. Unfortunately, conventional theories of growth lead us to invest in industry, physical investment, instead of our children.
Commentary added 24 March 2015