The Blackwell Companion to Sociology (38 page)

beyond the narrow confines of utility and to encompass more fundamental

objects of value such as freedom, including positive freedom.

The ethical framework proposed by John Rawls (1971) for devising just socio-

political institutions meets these criteria neatly. Rawls starts from the premise that the justness of institutions cannot be determined by the value system of any one group of people in a society; all groups must agree upon rational reflection that the institutions devised are in conformity with their self-interest. However, an ethically defensible system cannot accept the outcome of reflections that

people might make from the vantage points of their respective stations in life,

because being self-interested they will try to advance their own stations even if it causes grievous harm to others. For instance, the rich and the powerful might

propose institutions that would perpetuate their hold over the rest of the society.

The point is, the existing distribution of powers and privileges is seldom fair, and a system that is not devised from a fair vantage point cannot be just.

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Rawls suggests that the only ``fair'' vantage point is an `òriginal position'' that is covered by à`veil of ignorance.'' This is a hypothetical situation, obtaining prior to the formation of society, where we imagine individuals coming together

to devise institutions for a future society without knowing who is going to

occupy which station in life once that society comes into existence. According

to Rawls, only the rules and institutions that would be agreed upon in this

situation would be just, and therefore these are the only ones that would be

able to claim a fundamental moral force. He then goes on to argue that rational

reflection from the original position would lead individuals to agree upon the

following general conception of justice: `Àll social primary goods ± liberty and opportunity, income and wealth, and the bases of self-respect ± are to be

distributed equally unless an unequal distribution of any or all of these goods

is to the advantage of the least favoured.''

The reasoning through which Rawls reaches this conclusion is a complex one,

involving comparison of this principle with other plausible ones in terms of their implications for rational self-interested individuals, who are about to make an

inviolable commitment to a principle that would determine their entire life

prospects without having any knowledge of the exact social station they will

eventually find themselves in. Rawls proposes this particular principle because, by testing against moral intuition, he finds that self-interested people are likely to consider its implications more appealing than those of other principles.

Two features of Rawls's general principle are worth noting in the present

context. First, equality in the distribution of what he calls ``social primary

goods,'' of which income and wealth are a part, is the benchmark of a just social order. Second, deviation from this benchmark, in the form of inequality, may be

tolerated only if everyone in the society benefits from it, and when there are

more than one unequal orders that would allow everyone to benefit, then that

particular order must be chosen which will give the maximum possible benefit to

the least advantaged person. The second feature thus qualifies the demand for

absolute equality as expressed in the first, by allowing inequality when everyone benefits, but in so doing it again raises the flag of egalitarianism by insisting that the benefit to the least advantageous person must be the criterion for choosing

among alternative social orders.

Thus, from the Rawlsian perspective, egalitarianism ± in the space of social

primary goods ± emerges as a necessary consequence of self-interested people

reflecting rationally from à`fair'' vantage point. These primary goods are

defined as ``things that every rational man is presumed to want.'' However,

they are not wanted for their own sake ± ``these goods normally have a use

whatever a person's rational plan of life.'' These uses obviously include the

negative and positive freedoms that people will enjoy by having access to the

various components of primary goods, such as liberty, opportunity, income, and

wealth.

Here is an ethical theory that attaches fundamental value to the consequences

of actions and institutions, not in terms of the narrow conception of utility, but in much broader terms encompassing both negative and positive freedoms that

people can achieve via the possession of social primary goods. Furthermore, this On Inequality

151

theory demands, as an essential part of the ethical framework, an egalitarian

distribution of those primary goods.

In an important extension of Rawls's work, Sen (1980, 1992) has argued that

if freedoms are indeed the ultimate object of value, then Rawls's demand for

egalitarianism in the space of primary goods may be unduly limiting ± one

should focus on the space of freedom itself. His argument can be best understood in terms of two related concepts of ``functioning'' and ``capability.'' Functioning refers to a person's ability to be and to do the things she has reason to value, such as the ability to be free from hunger, or to lead a healthy active life; and

capability refers to all possible functionings she can choose to achieve given

her resources and any other constraints she might face. Higher capability implies greater scope to choose a valuable functioning. The concept of capability thus

corresponds to the notion of freedom in a broad sense ± the freedom to choose

the valuable functionings of life.

Sen argues that human well-being consists in their capabilities, not in their

utility or happiness as assumed in much traditional thinking. Happiness is not

irrelevant, of course; ``to be happy'' is, after all, one of the functionings people obviously value. To that extent, happiness is subsumed within the concept of

capability, but the point is that there are other valuable functionings, which a utility-focused approach ignores but a capability-focused approach would not.

An ill-fed, ill-nourished person who has resigned herself to her fate and learnt to take pleasure in small mercies may not seem to have a particularly low level of

well-being if happiness is taken as the sole content of well-being. But if well-

being is conceived as capability, then her deprivations in terms of the capability to be free from hunger and to lead a healthy active life will have to be considered along with her high level of happiness. This broader evaluation will not yield the same reassuring picture of well-being as before. Intuition suggests that the latter is a more revealing approach to understanding human well-being.

If capability is accepted as the content of well-being, then any ethical system

that judges the goodness of a society in terms of human well-being must accept

capability as the fundamental object of value. In that case, the demand for

equality must mean the demand for equality in the space of capabilities. Sen

(1992) does make a strong case for equality in the space of at least thè`basic

capabilities,'' such as the capabilities to be free from hunger, to be able to lead a healthy active life, to be able to participate actively in the society, and the like.

Insofar as income, or resources, or more generally, Rawls's primary goods, are

a means of achieving capability, one might think that equality in the space of

these resources would be equivalent to equality in the space of capability. But

that is not so. The reason lies in the fact that for physical, biological, and social reasons, different people may have different capacities to convert primary goods into capabilities. Because of these differences, equality in the space of primary goods will not ensure equality in the space of capabilities. For example, if people with different metabolisms or people living in different environments of health

and hygiene consume the same amount of food, they will end up with different

nutritional capabilities to lead a healthy active life. Therefore, if freedoms are 152

Siddiqur Rahman Osmani

valued, then equality should be demanded in the space of capability, at least of basic capabilities, and not in the space of resources that yield capability.

The demand for equality of basic capabilities has a very important policy

implication. Experience from different parts of the world shows that with

appropriate policies it is possible to achieve remarkable equality in the distribution of basic capabilities even when the distribution of income is not very equal nor the level of income particularly high. Some of the celebrated examples are Sri Lanka, Costa Rica, and the Indian state of Kerala. What all of them have in

common is a very high level of basic nutritional and educational capabilities that are enjoyed almost equally by the majority of the population, at levels of income that are quite low and with inequality in income distribution that is average by international standards. This extraordinary achievement has been made possible

by conscious intervention by the state ± in the form of public provisioning of

food, health care and education. (For more on these case studies, see Dreze and

Sen (1989) and the references cited therein.) Comprehensive coverage of public

provisioning has ensured that many have achieved respectable levels of basic

capabilities, who would not have been able to do so relying on their personal

incomes alone. The result has been a remarkable equality of basic capabilities

across a rather unequal income scale.

The demand for equality in basic capabilities thus calls for an active role of the state in providing access to food, health care and education. This does not mean, however, that the perspective of capabilities can afford to be indifferent to the distribution of personal income. To the extent that people must try to develop

their own capabilities, and not rely on the state to do everything for them, they will need resources or income. So, if income happens to be distributed extremely unequally, especially at very low levels of per capita income, it may not be

possible for the entire population to develop their basic capabilities equally.

The demand for equal capabilities would thus set limits to permissible inequal-

ities in income distribution.

The Growth versus Equity Debate

The preceding discussion suggests that the concern with income inequality

remains valid even when one takes a broader view of equality, like the equality

of capability. So even with the broader view, an egalitarian must grapple with the argument that the demand for greater equality in income distribution may come

into conflict with the demand for economic growth ± the so-called growth±

equity trade-off. If such a trade-off really exists, then there is a danger that the quest for equality may turn out to be self-defeating by impoverishing everyone.

This danger need not compel one to abandon the goal of equality altogether, but

it will certainly call for tempering the demand for equality when the trade-off

seems particularly onerous. It is, therefore, of great importance to unravel the true relationship between equality and growth.

Since the 1950s, the conventional wisdom regarding the relationship between

equality and growth had been embodied in an empirical phenomenon known as

On Inequality

153

the Kuznets curve, named after the Nobel laureate economist Simon Kuznets,

who was the first to observe and document this phenomenon (Kuznets, 1955).

While studying the historical data of the Western developed countries, he noted

that the pattern of income distribution within a country changes in a specific

way as the country becomes richer: as it begins to grow from a low level of

income, inequality first rises; and only after it has reached a certain level

of affluence does inequality begin to fall. Inequality thus appeared to be a

necessary concomitant of growth in the early stage of development. The message

then got across that à`premature drive for equality would only mean sharing of

poverty,'' or more colorfully that ``you must let the cake grow first before sharing it equally.'' Politicians in the rich and poor countries alike began to justify

inegalitarian policies by using such metaphors.

As it happens, the empirical basis of the metaphor was never very firm.

Kuznets himself was keenly aware that much of the information on income

distribution that he had at his disposal was of uncertain quality, to say the

least. Many subsequent studies that have tried to rediscover the Kuznets curve

from more recent and somewhat more reliable data have come up with mixed

results: some of them support his original insight, others don't; mostly, they

don't (Fields, 1989).

Nevertheless, the belief in the trade-off between equality and growth has

proved remarkably resilient. Actually, this belief predates the Kuznets curve by a long way, not so much on the basis of actual data, however, as on economic

theory. Almost all the great classical economists ± from Adam Smith to Karl

Marx ± propounded the theory that capital accumulation was the key to growth,

and that accumulation was driven by the savings of the people, which in turn

depended on the level and distribution of income. They also assumed that the

rich capitalists tended to save a bigger proportion of their income than the poor workers. This was a crucial assumption, for it meant that a more unequal

distribution, giving more income to the rich, would result in bigger savings,