Reviews Of Amartya Sen's Economic Theory

Amartya Sen is a well-known economist, who was born in India. In 1998, the Royal Swedish Academy of Sciences awarded him the Nobel Prize in Economics in recognition of his contributions in Social Choice Theory, the relationship between freedom and development, the causes of poverty and famine, etc.This paper introduces and analyzes several Sen's major theories to clarify the theoretical background, historical context, theoretical essence, contributions and limitations of Amartya Sen's theories.First, in terms of the causes of famine, Sen has a remarkable achievement. Traditional economic theory considers the main cause or the only course of famine is the decline in food production. Sen studied on several large famine events, finding that the formation of famine was not entirely due to the decline in food production, but it might be caused by the loss of rights including labor rights, production rights, exchange rights and inheritance rights. After combining utilitarian's social welfare maximization and libertarian's pursuit of individual freedom theory, Sen proposed a method whose value orientations are right and freedom and whose ultimate goal is improving individual welfare. This method is used to determine whether people's lives and social conditions are satisfactory, or if they are moving to the desired direction. At the same time, unlike the mainstream economics profession, Sen's Right Approach is based on welfare economics.Through the study of poverty and famine, Sen's research turned to the issue of equality naturally. After critizing and absorping these mainstream concept of equality, and integrating the uphold development theory, Sen brought forward a more inclusive concept of Ability Equality. Sen thought that the traditional concept of equality is only concerned about the substance of equality, ignoring the Ability Equality human being. Besides, he considered that the equality of resources was not equal to interpersonal equality. Sen proposed that functions and capabilities should be used to evaluate personal interests and measure equality. Ability Equality theory of Sen would provide us with a better understanding of individual interests and inequality, and then a more rational public policy could be proposed.Sen also conducted in-depth analysis in relationship between freedom and development. Traditionally, economists will regard raising of per capita income, industrialization and urbanization level as measures of economic development indicators. Sen had a profound reflection in the past concept of development, and made freedom as the core of economic development. Sen demonstrated a new conclusion: development is a process of pursuing fully freedom. He believed that freedom was not only the ultimate goal and the highest values, but also a strong driving force for development. This strong driving force could be expressed in the effect of five instrumental freedom on development including political freedom, economic conditions, social opportunities, transparency guarantee and protective security. Although there are some kinds of imperfections in Sen's liberal theory, it can help us to have a more profound understanding of freedom and development, and the relationship between them. At the same time, it also has important practical reference for China.Sen's economic thought is very rich. He broke some material indexes in traditional economics such as only concerned about GDP, per capita income and utility. Instead, ethics and philosophy were introduced into economic analysis and a close link between Ethics and Economics was re-established. Comparing with those mainstream economists who only focused on economic growth, Sen gave more attention to living conditions of the lowest class of people and the right and ability of our human beings.Finally, based on the description and analysis of Sen's main economic theories, this article summarizes the practical reference of Sen's theory on Chinese practical problems.