I was recently talking to a financial consultant visiting from India about the state of the Indian economy (she recently married my cousin; congrats. P & S!). She seemed to think that, despite how gloomy the Indian television news analysts tend to be, the Indian economy is actually continuing to grow somewhat even as western economies are sliding into a deepening recession. A quick look at the Economist’s latest country data for India seem to confirm that outlook: India’s economy is still forecast to grow at a 5% rate this year. That’s down from 9-10% in the past few years, but growth is growth. (She suggested that Indian business news analysts might be channeling the gloom of their western counterparts, rather than using actual data particular to the Indian economy.) Have readers seen other data about the state of the Indian economy as a whole?
That might lead us to Amartya Sen. Sen has an essay re-appraising of the works of Adam Smith in light of the current global economic recession in a recent New York Review of Books. His basic point seems to be that Adam Smith was right, though perhaps hardcore free market types today tend to misread Smith as advocating unregulated free markets. Sen also notes that Keynes is currently more popular than ever, though he argues that Keynes’ contemporary at Cambridge, Arthur Cecil Pigou, might be more helpful to us today because of the latter’s work on the role of behavior in shaping markets (behavioral economics), as well as welfare economics.
In a discussion of the possible role that reforming health care might play in government-supported economic recovery programs, Sen makes an interesting side-note about health care in Kerala as compared to China:
A crisis not only presents an immediate challenge that has to be faced. It also provides an opportunity to address long-term problems when people are willing to reconsider established conventions. This is why the present crisis also makes it important to face the neglected long-term issues like conservation of the environment and national health care, as well as the need for public transport, which has been very badly neglected in the last few decades and is also so far sidelinedâ€”as I write this articleâ€”even in the initial policies announced by the Obama administration. Economic affordability is, of course, an issue, but as the example of the Indian state of Kerala shows, it is possible to have state-guaranteed health care for all at relatively little cost. Since the Chinese dropped universal health insurance in 1979, Keralaâ€”which continues to have itâ€”has very substantially overtaken China in average life expectancy and in indicators such as infant mortality, despite having a much lower level of per capita income. So there are opportunities for poor countries as well. (link)
Interesting that Sen singles out Kerala; I wonder where he got that information from. Also, I wonder what the differences are between Kerala’s current health care policy and that of other Indian states. (Or, is this just yet another case of “everything is better in Kerala”?)