Economics with a human face

David C Engerman, an accomplished historian of contemporary economic development, is no stranger to South Asia.

- SANJEEV AHLUWALIA

His 2018 book titled The Price of Aid, documents how India used the leverage provided by Cold War rivalries to manage the flow of foreign aid in line with its needs.

The chosen entry point for this book is six eminent South Asian economists, all of whom graduated from Cambridge University. The term "Apostles" is a riff on a 19th-century secret society—the Cambridge Apostles. John Maynard Keynes was a member and Lal Jayawardene from Sri Lanka followed. The other five Apostles are Nobel Laureate Amartya Sen, Jagdish Bhagwati and Manmohan Singh from India, Mahbub ul Haq of Pakistan, and Sobhan Rehman of Bangladesh.

The 19th-century neoclassical reliance on markets for efficient allocation of resources was challenged by the Great Depression of the 1930s when markets did not self-correct. In response, Keynesianism advocated government activism to smooth market fluctuations through taxes and social spending.

Under the watchful eye of the redoubtable Joan Robinson, this became the dominant economic philosophy the Apostles encountered in the late 1950s.

Amartya Sen became the protagonist for state activism in education and health and for investing in human development—an approach that was implemented by Haq, who embedded basic human needs as a building block for development in the United Nations Development Programme (UNDP) and later constructed the human development index.