CONSUMPTION AND HUMAN DEVELOPMENT: CONCEPTS AND ISSUES Sudhir Anand and Amartya Sen 1. Introduction "Tell me what you eat," remarked Anthelme Brillat -Savarin nearly two hundred years ago, "and I will tell you what you aye." The idea that people can be known from their consumption behaviour has some plausibility. Eating enough and well nourishes us; over- eating renders us obese and unfit; education can make us wiser (or at least turn us into learned fools); reading poetry can make us sensitive; keeping up with the Joneses can overstretch our resources; and an obsession with fast cars may make us both "quicke and dead." There are few things more central than consumption to the lives that people variously lead. AIrrr~ ~nsumption is not the ultimate end of our lives. We seek consumption for a purpose, or for various purposes that may be simultaneously entertained. The role of consumption in human lives // cannot be really comprehended without some understanding of the ends that are pursued through consumption activities." tlur ends are enormously diverse, varying from nourishment to amusement, from living long to living well, from isolated self-fulfilment to interactive socialization. The priorities of human development, with which the Human Development Reports are concerned, relate to some basic human ends, For a general introduction to the contemporary literature on 1 consumption, see Angus Deaton and John Muellbauer, Economics and Consumer Behavior (Cambridge: Cambridge University Press, 1980). Consumption & Human Development Page 2 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen and there is scope for scrutinizing how the prevailing consumption act i vi ties serve those ends. This is, however, an extremely difficult subject, and when entering this field there is a need for humility and forbearing. It is fair to presume that people know what they are doing when they opt for one consumption pattern over another. Even when a person may not be all that well informed, the idea that some other person can judge her choices and decisions better than she can is not, as a general rule, easy to accept. Indeed, pontifications of the development specialist on the implications of alternative patterns of consumption may be hard to savour or even tolerate. And yet the process of human development is so deeply affected by the nature and characteristics of consumption behaviour that the relation between the two is a matter of some general interest. No matter how we ultimately assess issues of legitimacy and status, the subject matter of consumption calls for analysis and scrutiny by the persons themselves as well as by others. People entertain various objectives, and the chosen consumption patterns may reflect this plurality. Many of these objectives fit well into the ends of human developm2nt, while others do not. That distinction need not be seen as ground enough for paternalistic correction, but it is important to understand the connections involved. Decisions on public policy will, of course, also require analyses of ethics and politics (including, among other things, the value of autonomy and liberty in choosing Consumption & Human Development Page 3 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen consumption patterns and the importance of immunity from interference) But a closer understanding of relations between consumption patterns and the lives that people lead -- or fail to lead -- can be an important contribution to policy analysis at an informed level. To illustrate (with some simple examples), in the choice over guns and butter (both of which are widely sought), the human- development perspective is distinctly on the side of butter, rather than guns. Given the importance attached to living long, this is natural enough, and for much the same reason a less lethal food than butter may even end up getting higher marks in the human- development evaluation of consumption patterns. Smoking may be a much sought after consumption activity, but this does not give it a hallowed status In assessments of human development; the merchants of death who place luscious ads, urging youths in the Third World to smoke more, cannot be seen as promoting human development. There is an issue here that calls for We scrut~ny. cannot take the subject of consumption as being "beyond" the reach of development analysis. The human development perspective suggests particular ways of thinking about consumption, and this study is concerned with the investigation and clarification of those ways. Since human development In not a negligible perspective for policy analysis, the connections have general policy relevance, without being the immediate basis for any ready-made programme of public Consumption & Human Development Page 4 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen intervention. Part of the object is to place the investigation of consumption patterns and their implications onto the social agenda. This is the motivation for the inquiries that follow. 2. The Domain of Human Development In the analytical and policy implications of viewing e~amining consumption in the human development perspective, we must have a clear idea of the content of this perspective. The approach of human development has been explored and applied in previous Human Development Reports. The empirical analysis has taken the form of presenting a variety of relevant information related to the lives that people are able to live.' The focus has been on the achievement, expansion and shortfall of some basic capabilities that people have reason to value, such as living long and well, being lettered and educated, being healthy and well-nourished, taking part in the life of the community, and so on. The informational thrust of the analysis of human development has been in the detailed discussions (afforced by a great many tables) covering a wide variety of general fields that are of relevance to the lives that people are actually able to lead. A few of these achievements and deficiencies are also put together and reflected in aggregate indicators such as the Human Development On this see particularly Human Development Report 1990 (New 2 York: Oxford University Press, 1990). See also Amartya Sen, Commodities and Capabilities (Amsterdam: North-Holland, 1985); Mahbub ul Haq, Reflections on Human Development (New York: Oxford University Press, 1995); Paul Streeten, [[reference]]. Consumption & Human Development Page 5 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen Index (HDI) and the Human Poverty Index (HPI). There are also additional aggregative calculations related to gender inequality, yielding gender-related indicators of human development in the form of GDI and GEM. A variant of the Human Poverty Index that is of particular relevance to the richer and more accomplished countries is also presented in this report. These aggregative indicators are useful in their particular contexts, but it is extremely important to emphasize that these indicators have specific and limited focus, and do not exhaust the domain of human development in general. In analyzing the role of consumption in human development, we have to go well beyond these specialized indicators. An indicator, such as the HDI or HPI, is only one real number, and the more that is packed into that one number, the less becomes the weight and importance of each constituent of the index. The selection of an aggregate index is inevitably one of "tragic choice." Aggregate indicators are chosen as summary information that can be sensibly used in dealing with some general issues. This applies to the HDI and HPI too, without any pretension to cover the entire domain of human development. The relevant have co~texts included the improvement of the informational perspectives of the gross national product, to derive an indicator that would be sensitive to varying levels of aggregate achievements, of particular relevance to the poorer countries. This has led to the Human Development Index (HDI) , which concentrates on average life Consumption & Human Development Page 6 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen expectancy, sChooling and elementary education, and the income basis of other basic capabilities. An alternative focus of interest relates to the informational perspective of poverty and deprivation, and has been geared to getting a broader measure than the standard indicators of income poverty. This has led to the Human Poverty Index (HPI) , with its focus on the proportions of people who are denied realistic chances of living reasonably long lives, or being literate, or being adequately nourished, or having safe water or access to health care.3 These aggregative indicators have been devised to reflect a limited but contextually important part of the general concern with human development. Their relevance is related to the chosen context, and these indicators, contingently important as they are, must not be confused with the general perspective of human development. All this is important to state because there is, clearly, some temptation to concentrate on the simplicity of aggregate indicators, as a result of which the richness of the -overall picture of human development is sometimes lost. It is particularly worth stating in the present context, because we cannot do justice to the relationship between consumption and human development if the concentration is exclusively on the aggregate indicators (such as the HDI and HPI), rather than on the broader picture of human development (presented in the detailed discussions In the On this Human Development ReDort 1997 (New York: Oxford University Press, 1997), Chapter 1. Consumption & Human Development Page 7 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen respective Human Development Reports) . To be sure, the pattern of consumption and the nature of consumption behaviour influence the achievements and deficiencies of the specific components of the aggregate indictors (such as life expectancy at birth) . But consumption has also other significant effects on the ability to achieve a high quality of life (for example, through influencing the ability of people to achieve happiness, or to take part in the life of the community) These broader connections will be worth examining, going well beyond the domain of HDI or HPI. The approach of human development suggests that the progress of the society be judged by people's real ability to lead the kind of life they have reason to value, and this general perspective is not confined to the limited set of variables on which the summary indicators exclusively concentrate. 3. Consumption as an Activity: Time and Opportunity We turn now to consumption. What does consumption consist in? Sometimes consumption is defined as simply having some commodities, rather than the use that is made of them. But consumption can also be seen as an activity, involving the use of commodities. On this operational interpretation, consumption cannot be understood or assessed without reference to the process of uSlng these commodities. The distinction may seem like a fine point -- perhaps even too fussy and definitional -- but that fine point is, in fact, associated with some very basic distinctions. Consumption & Human Development Page 8 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen The activity-oriented interpretation immediately draws attention to the complementary factors that make it possible to have effective use of commodities, in particular time and repose, on which may depend a person's ability to get something out of the commodities that he or she may gather or amass. If the lack of time in an over-busy life-style points to some deficiency, the inadequacy to be addressed may involve not merely the paucity of pure rest, but also the lack of opportunity to utilize and enjoy one's economic possessions as well as social relations. Thus, in assessing living standards, attention has to be paid not merely to the commodities one has, which is reflected in such aggregate magnitudes as gross national product, or real national income, but also to the time and opportunity for the actual utilization of what one does have. This is not, of course! a new issue in economic evaluation. Many economists have proposed the inclusion of the value of leisure in calculating a person's well-being and advantage. -William Nordhaus and James Tobin have shown how substantial a difference is made by the inclusion of the value of leisure In assessing an individual's adjusted real income, and also, correspondingly, in evaluating national income and its growth (or decline).' Standard studies of national income statistics tend to proceed without William Nordhaus and James Tobin, "Is Growth Obsolete?" in 4 National Bureau of Economic Research, Economic Growth: Fiftieth Anniversary Colloquium (New York: NBER, 1972). Consumption & Human Development Page 9 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen making any such corrections, even though sometimes respectful references are made to these correctional calculations. There is a need here to bring the statistical practice more in line with our evaluative understanding. 5 [[What do you propose to do about this, Uganda House??]] This~ consideration is not only of general relevance for assessing human development, it is also of particular relevance in some specific contexts. First, the plight of the unemployed has tended to receive more sympathetic attention than the predicament of the overworked poor. This is not surprising, and is partly influenced by the nature of the conventional accounting system which is deeply influenced by the income perspective. Unemployment typically entails a loss of income in a way that overworking does not. And yet an overworked life can be not only joyless, it can also leave the person with rather little ability to do the things that she may value doing. This is, in fact, a persistent problem for particular deprived groups in poor societies, such as domestic servants. It is very difficult to get hard data on the working hours of, say, the domestic servants in most of the poor countries, but beginning Q can be made on this. [[What can be done in HDR 199B?]] It is, in any case, important to flag this issue, both because they can be discussed In qualitative terms even in the absence of exact [[New references on the inclusion of leisure beyond Nordhau8 ~nd Tobin.]] Consumption & Human Development Page 10 Background paper/ HDR1998 /UNDP Sudhir Anand & Amartya Sen quantitative data, and also because the process of searching for new data can be positively helped by the development of a general research interest in a particular field. There are other groups whose members are over-worked and unrewarded toiling long and awkward hours, and getting very little personal compensation. This is often the lot of many housewives in poor economies, frequently reinforced by a rigidly established sexual division of labour. The work involved is standardly unpaid and quite often unrecognized and unpraised. This takes us to the second reason for paying particular attention to the availability of time and opportunity to make use of economic resources and social relations. There is a strong case for integrating the twin issues of over-work and unpaid work, since the lack of payment (for example, to housewives) often reinforces the deprivation involved in over-stretched working hours. The deprivation in one dimension is supplemented and consolidated by poverty in another dimension. The over-worked and unpaid women workers may have neither the money to spend, nor the time to spend it in, but the dual deprivations do not cancel each other out; in fact, they reinforce each other wi thin a general ;;:>icture of neglect, injustice and injury. The issue of unpaid long hours of women's work is, however, beginning to receive systematic attention in some discussions. In Human Development Report 1995, the work predicament of women has