KEY:
RV:     Ragupathy Venkatachalam
JG:      Jayati Ghosh

‍RV:       We have Professor Jayati Ghosh from the Jawaharlal Nehru University. ^[1] Thanks for accepting our invitation to participate in the Goldsmiths ISRF interview series with eminent economists, Professor Ghosh. Thanks for coming.

JG:        It is a pleasure.

‍RV:       Let me start with a broad question regarding one of your main research areas. How do you think we should conceive development in a capitalistic society in your view?

‍JG:        The thing is that development means so many different things to different people and you can interpret it in thousands of different ways. It is usually seen as this linear progression, from less developed to more developed. I believe the reality is far more complicated. I don’t think it is true that societies stop developing – that you reach a certain point and you have made it and you basically are now stagnant as a developed economy. I also believe that development is uneven. It occurs spatially in certain areas, it doesn’t occur in others. History steps back and moves sideways. It is not the standard format that people have looked at in terms of stages. I believe that is true even of the so-called Marxian stages: that you necessarily progress from slavery to feudalism and capitalism and socialism. I think the way that societies’ and economies’ dynamics play out, development isa very multi-pronged and complex thing that doesn’t necessarily operate unidirectionally.Having said that, there is also the normative view of development, which is what we all talk about. We talk about progress and moving towards a better off society or a more egalitarian economy and all of those issues. Here too, I believe that whatever people say, there is still this tendency to equate per capita income and development. You can’t get away from it somehow. Despite the emergence of human development indicators or multidimensional wellbeing indicators or capability or all of those things, you still end up relying on per capita incomes. This again is a problem, because yes, it can be a neat summary which is often a proxy for a number of other variables, but quite often it is not. You can have relatively high per capita incomes with a large part of your society living in deep material deprivation and not “developed” according to many other standard indicators.

‍RV:       There are some interesting points that you touch upon there. Why do you think this process of development is so uneven?Is it to do with the capitalistic mode of development or the system, or is it something else?

‍JG:        Development is uneven because capitalism is uneven. What we call development today is essentially the evolution of capitalism, whether we like it or not. The way capital operates is that it expands, certainly. It is like an octopus. It seems to absorb everything around it, but at the same time it actually perpetuates certain kinds of concentration. There is concentration of capital, there is also geographical concentration of capital which in turn generates the inequality and uneven development that I was talking about, and there is the attempt of capital to use pre-capitalist and non-capitalist forms and social relations in ways that maximise its own surplus. All of these generate particular patterns of growth whereby you have regional concentrations of capital and therefore per capita income and sectoral and other kinds of concentration. It is uneven spatially, but it is also uneven vertically. It is uneven in terms of certain groups benefiting disproportionately.

‍RV:       You touch upon a distinction between growth and development, if I understand correctly. Growth theory has always avoided getting into the specificities, but extracting general principles and formulating them as mathematical models, at least since Harrod-Domar onwards. On the other hand, from what you are saying crucial to understanding development is also to understand the specificities within the stage of capitalism.How useful do you think is growth theory – all the different varieties of growth theory – in understanding the process of development?

‍JG:        From the theory point of view, I believe the only growth theory that really makes much sense when we are looking at long run processes of development is endogenous growth theory. I think all the theories that see, let’s say, technological change as manna from heaven are quite meaningless. They tell us nothing about how economies actually grow. Also growth theory is necessarily focused on incomes. Okay, sometimes per capita incomes, but it is focused on the absolute expansion of income. Aggregate incomes can contain all kinds of things which may or may not reflect development as broadly defined, whether it includes various human development indicators or even material progress for the majority of the population. I think there are several elements here. One is the distribution of the income:whether the aggregate is distributed in a way that enables the material improvement of a substantial section of the population – whether the growth is “inclusive”or not. The other is how much looking only at income leaves out. We all know that GDP is a terrible measure of even material prosperity, and of course it isa terrible measure of human capability.  If you consider for example an economy that provides a society with free transport, free education, cheap housing, relatively subsidised food, you could have very low GDP because all of these things are not commercially marketed and you could have a terrible, congested, polluting, privatised system of urban transport which generates lots of GDP, which also generates many accidents where people have to go to private hospitals that generate more GDP and so on. One may be growing faster in aggregate GDP, but in terms of development in the broader sense and the ideal sense, it is much worse off.

‍RV:       Having been someone who has participated, contributed and watched the Indian development experience from close quarters, how do you evaluate its trajectory over the last 70-odd years?

‍JG:        I think India is an extraordinary example of many of the things we have been talking about: about how growth doesn’t mean development, of how you can be on a capitalist trajectory without actually generating a full-blown expansion of the kind that the early theories of capitalism predicted, and how you can have extremely uneven development that leaves behind not just a section but perhaps the majority of the population.The Indian growth story is in many ways quite remarkable. If you look particularly over the last 30 years, which is precisely when it is supposed to have taken off, when everyone said “now India is emerging and it has become this dragon, tiger or whatever” – some animal that is now emerging onto the world stage – that is precisely the period when the things that should typically happen in this phase of rapid growth have not happened. Aggregate employment has not gone up; organised employment is flat; women’s work participation rates, which were already very low, have fallen in absolute terms to now the pathetic proportion of 17 per cent, which is unthinkable; more and more employment is irregular; agriculture is in deep crisis and there isn’t a movement of workers out of agriculture into productive non-agriculture to the same degree. Many of the things that people took for granted – the Kuznets, Clark growth patterns and so on – haven’t happened, yet the economy kept growing. Strange things are going on. It is really quite a contradiction in many ways; and I believe this illustrates beautifully how the pattern of growth and the nature of the accumulation process are absolutely crucial. It is because we have had a largely capital-intensive pattern of investment which didn’t generate employment that you haven’t had this broader expansion whereby more and more people get drawn into that growing, modernised economy. But it is deeper than that. That modern, formal, organised sector relies hugely on that informal economy. It is not that the two are delinked. It is really that the link is one where the formal economy draws its sustenance from that informal, unorganised economy and therefore requires it to be kept at relatively low levels of development.

‍RV:       You are looking at a symbiotic relationship between these two areas?

‍JG:        Often it is seen that formal and informal sectors are distinct, and if anything, the formal is a competitor to the informal and as it expands, the informal will collapse. That is true to some extent, but I think in India we have a much more complicated process and that has to do with the fact that the formal sector relies on the informal sector to be as cheap as it is globally. Let me give you an example: IT(Information Technology). Everybody sees the ICT sector as India’s big success.We are supposed to be the “office” of the world, compared to China’s “factory”.That is the shining example. Now you go to all of these shining new buildings which are the home of India’s export-oriented ICT sector and what do you find?Yes, they have relatively cheap software workers, but they are able to be so cheap because they rely on informal or outsourced catering, transport, security, maintenance, entire logistics, which operates on the subcontracted -sometimes through companies, sometimes directly workers - often not getting the minimum wage. Then you are able to pay your software engineers themselves much lower wages because they can go home and rely on all of those cheaper goods and services from the informal economy. It is a symbiotic relationship. It is in fact,I would argue, a relationship of dependence on the informal sector.

‍RV:       I want to move onto policy, an area to which you have also contributed immensely. Economic policy making in a layman’s understanding would involve tackling or accommodating competing interests – both political and economic - and striking a balance. As someone who has been involved in policy making, how do you see these conflicting interests eventually get synthesised into policy? More precisely, I am wondering whether the standard economic tools that we teach to our students about policy are informative or dissonant from the actual world of policy.

‍JG:        I think any economist who is looking at policy has to be acutely conscious of the distributional implications. We have no choice and therefore it becomes an issue of meeting competing demands and all of those things. I think policy makers rely on economists to some extent.Often we are used to provide the window dressing for things that they want todo anyway and sometimes we are there to provide the assurance that they have consulted so-called experts who have some view on the matter. Having said that, I think economists often have this false notion that they are technocrats. We are not.We are deeply political and whether we like it or not, we are coming with a certain political orientation and understanding which may be explicit, but often is implicit. Therefore I believe there is a way in which economists’ understanding of inequality has been somewhat lacking. We are concerned with distributive inequality. We are talking all the time about the distribution of resources, of assets, of incomes, of jobs, of educational opportunities, of health status. We are looking at the distribution, but there is another very important form of inequality, which is relational inequality. That is really about relations between individuals and groups, which are about power imbalances. I believe that we have ignored relational inequalities. You cannot understand the Indian economy without understanding caste – a deeply relational inequality – or gender – again, a deeply and fundamentally relational inequality – or a bunch of other such inequalities. Those power imbalances are ultimately what shape policy    and we kid ourselves if we think we come with this nice technocratic understanding –here is what you do to get equity, to distribute these resources equally and soon – without recognising these relational inequalities that determine finally both which policies get chosen and how they get implemented.

‍RV:       That is very interesting. This concerns not just policy, but it is also there in standard courses in economics. For example, it is supposed to be positive, detached from value judgements which are kept at the back. Why is it that the moral philosophy roots of economics somehow morphed into this?

‍JG:        The earlier economists – not even the earlier ones, but let’s say the 18th century and early 19th century economists– were very much also moral philosophers. Obviously Adam Smith and so on, but you go back to the Other Canon that Erik Reinert and people have talked about.They were also very openly and explicitly moral philosophers, but more to the point, they put it out there. They said, ‘These are the things I believe in.These are my ethical principles. This is what I believe.’ They had no qualms about being normative and about being very clear about not just the distributive implications but where they sided. What you get from the late 19th century onwards is a shift away from that towards the positivist principles. I believe that was really not necessarily so much the outcome of how people’s minds think, but a political move. Even someone like Alfred Marshall was very clear that he had a moral underpinning and a normative aim. You may disagree with his notions of how you get there, but he was very clear that there was amoral underpinning. What you get with the extension of that marginalist revolution is somehow a pretence that it has now moved away from all that. It is “science” in an independent way, it is almost a natural science. It is something that operates with laws that are independent of whether I like it orI don’t like it and therefore there are going to be these laws of demand and supply, of this and of that, which are going to work independent of whether we want them to work or not, without seeing that all of these are socially generated. They are all creations of human beings and everything that is a creation of a human being can also be undone by human beings if there is enough social pressure to do it. I believe that the shift away from recognising that economics has no option but to be a normative discipline to one that sees itself as somehow positivist, independent, amoral in a way because it is really about some natural laws going on – that it is something that is happening like the sun and the sea and the waves – that is deeply political.

‍RV:       You have emphasised the crucial role played by the state and the need for it in the development process. Could you tell us to what extent is this role of the state necessary and what forms it should take? Where should it stop? How far should it go?

‍JG:        There has been a myth propagated, I would say especially in broadly this neoliberal period of the past three decades, that neoliberalism implies a withdrawal of the state. That is absolute nonsense. The state has always been an essential and integral part of growth processes, of the economy, of development. We have never got away from it. It has never been the case that the state has been unimportant. It has always set the terms on which any economy moves. This idea that you can have less of the state or more of the state doesn’t make sense. It is really a question of what form and whether you make it democratic, whether you can make it something that suits the desires and aspirations of a large number of your citizens, whether it creates more equity and equality. All of those are political questions. It is true that there are some situations where the state is overarching and oppressive. You can see it. It is there in your face that it is authoritarian or that it is controlling all the levers of economic activity. You can recognise it as being a deeply state driven economy, but even the ones where you think it is all the market, these are deeply underpinned by the state. A so-called free market depends hugely on private property, on the acceptance of certain contracts, on the legal enforcement of those contracts, on the distribution of the proceeds of those contracts and all of those kinds of issues; so you cannot have a laissez-faire economy without a deep role of the state. I think today if you told even an ordinary citizen, they would all recognise that there is a very strong and big, deep state out there. The financial crisis exposed how so-called deregulated markets are deeply reliant on a state that will come in there and do certain things: protect a chosen set of people, institutions, firms or whatever. So there is no getting away from the state.Then the question becomes: how do you make it a state that is responsive, accountable and democratic? That is a much more complicated question. It doesn’t necessarily follow from political democracy because even in democratic politics there are people with voice and without voice. That has to do with larger, deeper questions about the nature of society. Some less privileged ethnic groups or social groups and all of that kind of thing. It does have todo a lot with the ability of social awareness to be mobilised into putting pressure on the state. In a way, I would argue the only way you would get progressive economic policy is if you have continuous pressure on a state that is forced to be accountable. That is not an easy task, it doesn’t happen all the time, but that is really the only time when you will get that kind of result. It is not that states in and of themselves or bureaucracies or even institutions with very well-meaning people at the top will necessarily do good things. You have to force them. There has to be the social and political pressure.

‍RV:       Going back to theories of development, one the one hand in the 1950s when the so-called High Development Theory period was there, you see a lot of theories emerging. There was a lot of plurality in development theories. Then over a period you see this getting homogenised into being more aligned with a specific form of growth theory. One way to see this is that there is an increasing convergence, at least among economists, that this is THE way to go about thinking about development. On the other hand, like you mentioned, history moves sideways and criss-cross. What is the fundamental change in development theory in the last 30 or 40 years?

‍JG:        If I had to be very stark about it, I would say that in the past half century development theory has become progressively impoverished.

‍RV:       Could you elaborate on that?

‍JG:        It has become less rich, it has become less interesting, it has become less insightful. There are many ways this has happened. In the 50s and 60s there was in fact a remarkable flowering of different approaches to development, partly because there were many newly independent countries that were seeking to find their route and their path; partly because people had a long run historical approach. They were looking at processes.There was an emphasis on the macro processes, on the broader tools and constructs that would enable rapid industrialisation and the consequences of that kind of industrialisation. All of these were questions that were being debated, discussed, and it wasn’t confined only to the so-called developing countries. It was extensive in Europe. Some of the best work on development comes from Rosenstein-Rodan, who is talking about eastern or central Europe.There is very interesting work coming from the Tennessee Valley Authority I think in the United States. All of that kind of thing in terms of how you stop getting backward regions from being left out of a development process. Lots of interesting work. What happened, especially I would say after the 1980s, is a progressive narrowing down of the focus, a move from the macro to the micro, a move from long run processes to short run quick fixes, searching always for a universal panacea. You move from micro-credit to cash transfers to whatever is the latest fad of the month as the thing that is going to solve the development problem. A move from understanding development as a broad process towards poverty reduction as development. This progressive miniaturisation, I believe, has been responsible for a real decline in the ability of theories of development to understand what is going on. Some colleagues and I were involved in editing a volume, a Handbook of Alternative Theories of Economic Development. ^[2] I think what is remarkable about that is not just that there are many different perspectives (there are, I think, 50 contributions so there are many different perspectives), but what is remarkable is that these are all insights that we had and we have lost. We gave away all these amazing insights that come from the other canon of the 17th and 18th centuries down the line to people who wrote very fascinatingly about the Ottoman theories of development or evenIndian nationalist economists of the 19th century and so on. Insights that we have lost because we have moved into this rather foolish micro-theoretic notion of development which is defined as: how do you get quick fixes to reduce poverty that are based on a principle of rational economic man which you can interrogate slightly through the use of randomised controlled trials – which frankly I think are problematic, to put it politely. That has been deeply sterile in terms of actually understanding these broad processes. So it is a loss.

‍RV:       You mention about Randomised Controlled Trials (RCT). There is a lot of talk about that being the only way to do development or the gold standard of development evaluation. It is often justified in terms of rigour. But there is also the shift from looking at larger structural macroeconomic processes towards more micro. RCTs are becoming more and more prevalent in development discourse. Is there a scope for these methods?

‍JG:        If I were doing an intellectual theory of development, I would say that RCTs exemplify to me how the profession of economics is a bit like a financial market, which is to say it is permeated with information asymmetries that create a herd instinct. Whatever is the flavour of the month, everyone is rushing to that one. RCTs today are the flavour of the month. Everyone is rushing to do RCTs, they are given all kinds of credence, they are given all the honours of plausibility and scientific verification. Now let’s try and unpack this a bit. RCTs ultimately emerged in epidemiological research. Within pharmaceutical and epidemiologic research, there are many questions about RCTs now because you realise they don’t apply to different ethnic populations, they don’t apply to people in different physical locations. You cannot do an RCT for a drug on a group of black people in Atlanta, Georgia, and even hope that it will apply to another group of black people in Ghana. It will not. If even where it originated is now becoming aware of the fact that these are very specific and you cannot abstract from a specific location, time and social group something which is generally or universally applicable, then how much more would this apply to a socioeconomic context which is so very varied? Economics as a discipline anyway has really fragile claims to being a science in that sense, but then you try and impose a methodology which is somehow assuming that everybody will respond the same. In Botswana I will give a woman a cash transfer and she will spend it on her kids.Wow! That means I can give cash transfers to women in Hyderabad, I can give cash transfers in Canada and it will all have the same impact!

‍RV:       You earlier talked about the homogenisation and there is also the parallel development of increasing liberalisation in trade and finance. What implications do these have on specific development trajectories that countries can take and do take at the end of the day, especially related to policy and so on?

‍JG:        There is absolutely no doubt that trade liberalisation and financial liberalisation have dramatically reduced the policy space for autonomous industrialisation. All the currently advanced economies used tools that are simply not available to most developing countries today, whether it is tariffs and trade controls that enabled their infant industries to come up; whether it is directed credit, without which no country has industrialised, to favoured sectors; whether it is large public pushes for infrastructure investment, without which you cannot get the US economy of today and so on. All of these are things that the currently industrialised or advanced economic world relied on hugely to get where they have got. People like Erik Reinert, Ha-Joon Chang and others have talked about how this has meant the kicking away of the ladder and the fact that you are denying these opportunities for autonomous industrialisation today. There is no question that the big success story of the late 20th and early 21st century – that is, China– adopted completely heterodox policies – policies which they are now trying, the US is trying through its trade war, to destroy. None the less, that is what enabled its success. Now what the World Trade Organisation has done and what the pressures for financial liberalisation through many other ways – not justIMF etc. but mostly, I would say, through Davos and the pressures of private capital – has done is to make countries voluntarily give up their policy space.That in turn has meant that many countries are stuck in either stagnant industrialisation or stalled industrialisation. In Latin America it is actually deindustrialisation. Similarly in parts of Africa, where early efforts at industrialisation have more or less gone backwards. That is a very severe problem, but I also feel that periods of global instability, people don’t like them and they are uncertain and unpleasant often, but they are also periods of an opening up of spaces for these alternative policies. While I don’t think most normal, rational people will think very highly of Mr Trump, there is no doubt he is breaking up that system. He is messing it up big time. What is the point of a WTO if the big guy, the bully on the block, is refusing to go by its rules and is going to do what it likes? It really means therefore that other countries in a way almost have no option but to respond and do things. That may not always be bad. Periods like the global depression or the interwar period where there was a big mess-up in world trade, where things were sinking, are periods when there were phases of developing country industrialisation. It opens up both prospects, let me put it that way.

‍RV:       Going back to the question of capital, transnational flow of capital and capital flight are having an increasing influence on politics: the changing role of the state in those economies where this capital question weighing down upon them. How much has it affected countries likeIndia, China etc. in terms of what they could have done or what they should be doing?

‍JG:        Mobile capital has had a huge impact, especially on the so-called emerging markets, the ones that integrated financially with the global system. It has operated to reduce the policy space for sure. You can’t run a fiscal deficit because people in finance don’t like it. You can’t tax more because then capital will move. Basically you can’t spend therefore, which in turn means you cannot provide for the socioeconomic rights of your citizens or for industrialisation. You can’t do directed credit because global finance won’t like it. I could go on and on. There are many ways in which it restricts, but what we always somehow get taken in by is when governments tell us, ‘We have no choice but to do this.’ That is the mistake.This is a policy choice. It is governments who have chosen to open up their capital accounts, it is governments who have chosen to allow FDI to come in untrammelled and leave untrammelled. It is governments who have chosen to do the liberalisations that then leave them no policy space. Again, I take the example of China, which in fact did not do this until very recently and even now it is opening up is very careful. When it realises that too much capital flow creates a problem and there is a significant outflow, it cuts down, it puts curbs back on, it restricts the ability of public enterprises to invest abroad.It has other rules for foreign investment like group A and group B shares and all kinds of things like that. Countries like India, which have chosen voluntarily – or Brazil – to subject themselves to the whims of international capital, it is a policy choice. It is the ability of certain lobbies and groups within those economies, typically the finance lobby and the large capitalists, to impose their will on the state – that relational power I was talking about –which has led them to the situation where then they throw up their hands and say, ‘Sorry, we have no choice. We can’t do anything.’

‍RV:       You have been one of the pioneers in placing gender issues at the core of macroeconomics and in development when very few people were talking about it. Could you elaborate a bit on the importance of this and how it can be fruitfully incorporated moving forward in both theory and teaching, which is quite relevant at this point?

‍JG:        I have always felt that gender issues have been massively ignored in the study of economics and often that it is also treated as a side issue. We will do the macroeconomics and then you can look at gender, or you can even look at micro theoretic things and then we will see the impact on women. I think that is basically a completely flawed approach to understanding the economy. Particularly I want to emphasise that even now most of the gender discussions of economics are looking at the impact of economic policies and processes on men and women separately. That is certainly important. They are looking at the impact of tax policies or public spending, gender budgeting and all that, or financial crises differentially on men and women. It is absolutely true that they do differ greatly, but where I want to emphasise that we really miss out if we don’t look at gender, is how social constructions of gender within particular countries and societies impact on the economy. That is where we miss out. For example, a social construction of gender will give you a huge importance of unpaid labour in some countries. India is a good example.The reason we have such a low women’s work participation rate – 17-18 per cent– is because most of our women, in fact 88 per cent, are engaged in unpaid work, which is a huge subsidy to the organised, formal, recognised economy.Completely different from Sweden where the share of unpaid work is much less.You don’t understand this until you look at that distribution of paid and unpaid work, which is driven by how you construct gender and what gender roles you establish within. There are many other ways in which this impacts.Migration, for example. Now people don’t recognise this, but migration from the developing world is highly gendered. There are some countries which have disproportionately more women migrants – Philippines, Sri Lanka are classic examples – and some states of India have many more women migrants. If you look at the pattern of remittance receipts, you find that for countries that have dominantly male migrants, the remittances are much more unstable. They follow the business cycle in the host country. For example, Mexico or Pakistan –dominantly male migrants. Their remittance incomes were hugely impacted by the global financial crisis because people’s incomes collapsed. Most male migrants work in construction and manufacturing. These are sectors that are directly impacted in the business cycle. When they have less incomes, they send less money and you can see it. You can see collapse in those remittances. By contrast, countries like the Philippines and Sri Lanka send dominantly women migrants who work in the service sector – essentially the care economy and to a lesser extent entertainment. The care economy in fact, is much more resilient to the business cycle because you don’t immediately throw out your nurse, your domestic worker or someone like that. You are paying them low wages anyway, but it doesn’t necessarily go down. It is more resilient. You find that in fact in these economies sometimes the remittances don’t just not fall, they even increase, because when there is a global slowdown, the women try and save more out of that money to send back. Just comparing these, you discover there is a complete variation in remittance receipts. The World Bank is unaware of this.The World Bank does a report on migration and remittances in 2010 and says,‘Very surprising! Some countries actually find an increase in remittances. This is very unusual. We have to study this further.’ And I think, you fools! It is simply because of the gendered nature of migration and remittances!

‍RV:       We also speak of the impact of policies and how it affects disproportionately men and women. You are talking about the causes of how, for instance, the division of labour itself is in some sense gendered. Now what implications does this have on macroeconomic policy?

‍JG:        I would like to go back to something we discussed a bit earlier before we get into macroeconomic policy. I want to discuss long-run growth processes. We talked about how growth models, are they really useful in understanding how economies work? There are some basic insights, but I would say one of the big mistakes – I would even say a joke –about global growth models is their assumption of the exogenous labour supply. So low onwards, everybody has that L which comes “given” to you, as the rate of growth of population. That is nonsense. Capitalism has always created its own labour supply. Where it needs labour, it draws in labour. It draws women into the paid workforce or throws them back out again. In the United States, women’s workforce participation doubles in the Second World War because the men have gone out to war. When the war is over, they are thrown back into their little suburban roles as the “milk and cookies moms”. They are no longer in the workforce. Labour supply adjusts to that. Or migration. You bring in migrants from other parts of the world as you need them or you bring in children. You draw more children into the workforce. Or you get more and more older people to stay on in the workforce by extending retirement ages, as in Europe and Japan.Capitalism has always created its labour supply. The notion of a labour supply that is fixed to the rate of population is ahistorical. It is wrong. It doesn’t exist. Now once you recognise that, a lot of the other growth processes go out the window. If that is the case, if it has such an impact on the long run, then think of what it does in the short run. Think of how your inability to recognise particular gender constructs, whether institutionally or in terms of labour orin terms of the segmented labour markets and the willingness to accept lower wages of women, how all of those impact on policies; how you can get counter-intuitive, unexpected, unanticipated outcomes of particular policies because you haven’t taken into account what that means. People have done work, for example, on afforestation policies in South Asia. A very good thing, we all love it, terrible stuff is happening because of deforestation, climate change is making all of that worse and so on, but if you have afforestation policies that are simply excluding the local populations from accessing fuel wood, which large parts of South Asia still rely on, and women are disproportionately in charge of collecting the fuel wood, you can end up adding 6-8 hours per day –there are studies that have shown this; an increase of 6-8 hours of working time per day to fetch the fuel wood for your daily needs. Now does it mean that you have no option, that it is a trade-off between X and Y? No, it is not because how did it happen? It happened because you had these village forest management committees that were only composed of the heads of the households.Guess who? All men. Did they think about the time involved? No, because they don’t do it. In some experiments in West Bengal, they tried to have village management committees for the forests of only women. What did they do? They figured out a way to access for a few hours a day and for limited amounts that would preserve the forest, but would save working time for the women and actually manage the resource better. It is possible to do it. It doesn’t have to be a trade-off, but you have to involve the people who are affected. If you are gender blind about it, you will not even recognise there is a difference in how people are affected.

‍RV:       That is a very good example. Following on a theme that you touched upon there, environmental strain is something I want to talk to you about. The environmental strain that growth places on some of these developing countries, including China and India, has been substantial. We read all about it. There are obvious and difficult trade-offs, especially in an interlinked world where you are a latecomer. Where does one strike the balance in this?

‍JG:        As far as the environment is concerned, we are always being told that it is a trade-off and to some extent it is. It is true that 40 per cent of rural India still doesn’t have access to electricity.Giving them access will necessarily mean more greening, more carbon emissions etc., but it is not always the case that there is a trade-off. I come from I think currently the most polluted city in the world, Delhi, and many days you can’t breathe. Now to say that there is a trade-off of living in that incredibly, unbelievably polluted atmosphere where we are making our children sick, we are reducing their brain development, we are making old people prone to earlier death, we are doing terrible things to our residents, and saying,‘We have to do that because we are trying to industrialise.’ No, that is not a trade-off. There are ways of industrialising, it is just more expensive. We have to be willing to spend that money. I go back to the issue of transport. We do not enforce a largely public, green, clean, cheap form of urban transport.We enable, allow and even encourage a massively privatised, congesting, polluting, disastrous form of transport, which adds, I think, 30 per cent of our atmospheric pollutants. We don’t need to do that. It is not a trade-off. It is a trade-off because we have gone neoliberal. We think markets decide, people get to choose how they are going to move etc. We don’t enforce a public system which socially is cheaper.

‍RV:       There is always a choice, you mean …

‍JG:        There is a choice. There is a political choice. It is not a trade-off in terms of this versus that. It is a political choice of going for a less profit oriented and more public oriented system.

‍RV:       Development planning has been a very important part and a rich tradition in the Indian experience, yet for whatever reason it seems to have fallen a little out of favour in recent years. What do you see as its impact or its influence in the development process in India? Do you think there is still a place for this in the development discourse?

‍JG:        I believe development planning has to happen. You cannot develop without planning, whatever you want to call it. You can call it coordinated expansion or public investment. You can give it fancy names if you don’t like the word planning. I think the problem with planning is that it became equated with Soviet centralised planning, which had various issues, and that in turn was associated with a certain authoritarian politics and a rigidity of economic systems. Neither of those is necessarily connected with planning. It is possible to have other kinds of planning. Let’s face it, most of the western European countries did very extensive indicative planning and until today have planning. I would again stick my neck out. Just like no country has developed without directed credit, no country has developed without some kind of planning. Therefore to lose it is to say, ‘Bye, sorry. We want to miss that boat.’ It is absolutely essential. It is essential for many reasons. It is essential because you need coordinated investments not only for the Hirschman type push but because too many investments have got externalities, both positive and negative. You can create synergies if you plan them. If you don’t plan them, you don’t create the synergies. Does the planning mean that you have to do everything through the state, everything top down and everything very rigidly? No. It can allow scope for decentralised planning, it can allow scope for indicative work, it can allow for the kind of fiscal nudges that are so popular today. You have many different ways, but you have to have the coordination. If you don’t have the coordination, you will get little itty-bitty things that don’t go anywhere, you will not get the industrialisation and the shift from low productivity to higher productivity and higher value-added activities that is essential, and you will not get the expansion of human capabilities.

‍RV:       Could you take us through your journey as an economist, more broadly as a social scientist over the years? What has been your main motivation and figures or texts which have been of great influence in shaping your research interests?

‍JG:        I didn’t actually start out as an economist. I started out studying sociology because I was very interested in society and I wanted to know how societies work, but as I did this undergraduate degree in sociology, I somehow kept feeling I was skimming the surface, that I wasn’t getting down to it. If you like, very simplistically, the whole base-superstructure thing. I felt like too much of what I saw in society was influenced by these deeper economic forces, so I felt the need to study economics. That is when I shifted in my MA course to economics. Partly because of that, my interest in economics has also been very deeply moulded by this. If anything, I would say today I have come full circle. I now believe you cannot understand the economy without understanding society and politics, as I have been saying, whether it is the gender construction or in India the caste construction or the political economy or the relational and power imbalance. You can’t understand economic processes without those. In a way, I really believe that the proper study of political economy is what the early political economists did – that you don’t have those disciplinary boundaries. It doesn’t mean that you shouldn’t be abstract. You can certainly be abstract, but that abstraction has to always be informed by what are the most significant stylised facts that you have to keep in your analysis and your model. I would argue that my journey has been almost circular. I hope maybe spiral – maybe slightly on a higher level than when I started – but I do believe that you can’t really look at economic processes in isolation. Anyone who does is missing too much.

‍RV:       In terms of main influences – economists and texts – if you have anything…

‍JG:        Among my teachers when I first started studying economics I think the most important influences in my academic thinking were Krishna Bharadwaj, who is a very well-known student and theorist of classical political economy. she also worked with Sraffa; and Prabhat Patnaik, who is a Marxian scholar. They also both became my colleagues and I continued to learn from them for a very long time. I should also mention Ashok Mitra. He was kind of an uncle for me – my father’s very close friend who was himself a student of Jan Tinbergen, but very involved in policy throughout his career. He was the finance minister of West Bengal. He then became an MP. He was deeply engaged in the politics of economics and the economics of politics in a very hands-on way. I think he also influenced me in another way, which is that he was always very drawn to the iconoclasts, to the rebels, to the dissenters. I think I have some of that tendency!

‍RV:       Moving onto traditions or schools of thought that you identify with. I know pigeon holing is a very dangerous process, but in terms of influences what would you list?

‍JG:        In terms of intellectual influence, I would broadly see the Marx/Kalecki tradition as one very important influence on how I look at development and how I look at economic processes. I suppose some people would call that post-Keynesian, but then there are endless squabbles about what exactly is post-Keynesian, what isn’t and so on. I am also no longer really interested in whether something is “Marxist” or “not Marxist”. Frankly,I don’t care. If it is interesting, if it is insightful, I want to know about it. I think I am in a broad political economy tradition. Recently, I find the stuff of the other canon that Erik Reinert has introduced me to also very interesting. I find insights in a lot of that kind of work, which brings a complex tapestry but also has a strong theoretical approach in terms of the impacts of certain kinds of policies. I would say in terms of my ideals, I am a socialist and a feminist. These are what I would like to happen. In terms of my approach, I am a semi-Marxian, Kaleckian post-Keynesian, I guess!

‍RV:       That is a very rich tradition that you identify with. You have taught for a very long time and studied in very important universities in their heydays. How has economics teaching in universities changed compared to your student days both in terms of content and approaches? How would you evaluate it?

‍JG:        I have been involved in this profession as a student and then as a teacher for four decades now. If I look back on it, when I was a student, I think we all benefited from an emphasis on thinking, on critiquing and on understanding, on the basis of the assumptions and working it out from there. I think that was an essential element of how I was taught as a student both in my university, JNU, and in the University of Cambridge. There was a very strong emphasis on thinking. I think the problem with mainstream pedagogy is that it has moved from an emphasis on thinking to an emphasis on playing with being clever. That is a big difference, because then it is not necessarily that you are trying to understand something. It is that you are saying, ‘Okay, I can shift a little bit this model. I can change it and then I can get this publication in this fancy journal, and I can come up with a new counter-intuitive result.’ That is not the same. That is playing to a very small gallery because, let’s face it, no one else cares. It is not really about, how do I understand this economy? How do I figure out what the economic processes are? How do I link something with something else? That loss is a terrible loss. I teach MA and I have students who come with an undergraduate degree in economics who are all very clever and they are all very good at solving models and solving problems on the basis of fixed assumptions of models, because that is how they have been trained; but you ask them to unpack those models, you ask them what are the assumptions, most of the time they have no clue or they will list the least important assumptions, not the more important ones, and they will not even be aware of the important ones. The assumption of full employment is so embedded that it is not even mentioned in most textbooks.Then you ask them, ‘Okay, you abandon that. How does the model work? What are the implications, what are the outcomes?’ and they are stunned because they haven’t thought of it that way. Now in my university I am fortunate that I can design my course, I can teach it the way I want. In most places, you don’t have that freedom; and in most places, students just end up playing around with models. The clever ones are good at it and then they get their publications in the chosen journals, but it is not that they are contributing new insights. It is not that they themselves necessarily get more understanding about how the economy works. I think the reaction to that is what has given rise to all the movements we see among students: the post-autistic economics movement, the decolonisation movement, all of these movements that are trying to democratise the study of the discipline and to make it more relevant. I think it is sad that it had to come from students, that we ourselves did not do this, but if the students can force the profession as a whole and the teachers to change, that would be fantastic.

‍RV:       You think it has become a less critical approach rather than one of technocratic, for the lack of a better word…?

‍JG:        There is absolutely no doubt that it has become much less critical and much more playing around with existing models.

‍RV:       You mention that economic pedagogy seems to have moved from a technocratic emphasis, rather than creating new spaces, new theories, and giving space to question critically. We perhaps need more pluralism in terms of what we teach, which has been an increasing demand. But pluralism in teaching can also be tricky sometimes? In your experience as a teacher, how do we go about bringing different insights, bringing plural points of view which are not necessarily commensurate?

‍JG:        I believe pluralism in economics teaching is absolutely essential. In fact, the other way, which is the way that is chosen – here is the thing which is the received knowledge, let’s just serve it down – I think that is both patronising and oppressive. It is basically giving baby food. Here is this pap, now consume it. Actually, it is intellectual baby food. When I was a student, I was very fortunate in my MA programme in JNU, Jawaharlal Nehru University, that we had all four streams. We had the neoclassical stream dominated by the general equilibrium approach, the Arrow-Debreu approach towards neoclassical economics. We had a Marxian stream, we had a Ricardian-Sraffian stream and we had a Keynesian stream. Sometimes there were bitter fights between them. I don’t think it confused us. It was harder, it was tougher, we had to be more engaged and of course you got as a result fights amongst the students. We were arguing amongst ourselves, there would be people pitching for one versus the other, which forced you to hone your own arguments much more. I think that is really what made me. That assault of simultaneous positions is what made me whatever I am today. Whether it is good or bad, I don’t know, but I think it was essential. I would not have got it if I had had the baby food!

‍RV:       What do you see as the role of history of economic thought in the larger pedagogical structure?

‍JG:        Again, history of economic thought – I would rather call it the evolution of economic thought – is an absolutely essential part of anyone’s training, and the fact that it has disappeared from so many curricula is a tragedy. It is a very deep tragedy. It is worse than a tragedy. It has led to a deskilling. You now have students coming out of most of the top western universities in the US and Europe who don’t even really know what Keynes said. They have actually never read the General Theory ^[3]– forget about having read earlier economists – so they don’t even have a notion of what is surplus. Where did the notion of scarcity actually emerge and what does it imply? They have no real conceptual knowledge because they haven’t traced the evolution of these concepts. It is a terrible loss and I think we are much poorer as a profession because we have deskilled a whole generation and not allowed them to know the basis on which they are making arguments at all. In a way, it comes down to what I was saying: of serving students pap because you are saying, ‘Here is the processed food. It may once have been apple and orange, but I have mashed it up and made it into something you can just consume and it is okay.’

‍RV:       What advice do you have for young aspiring economists?

‍JG:        Aspiring economists today have a very tough call to make and I would like to therefore answer this in two forms. One is of course my ideal – what I would like young economists today to be. I think one, I would really like them to be well versed in the evolution of economic thought and in different traditions. If they haven’t been taught, they should be teaching themselves by reading more, which is still possible. I would like them to be open and I would like them to be always questioning. That is to say, for everything, ask: what are the assumptions? Under what conditions do these hold? Do they apply to the thing I am studying right now? Always questioning and also be unafraid of disciplinary boundaries. It is very sad, I think, that the best book we have today on the 2008 crash and its aftermath is written by a historian. It is a comment on what we have done to our profession. It is Adam Tooze’s book Crashed.^[4] It is sad that we have to have the best book on the crash written by a historian whois not worried about whether he is sticking to the straight and narrow “economic”path. That would be what I would like. I also recognise that it is a very tough world out there professionally, that things are stacked against you if you are heterodox, that it is not so easy to get a job, to get published, to move on, to progress and get promoted and do all of the other stuff that is required int he profession – certainly much more difficult than it was for us if you are heterodox. So I also realise that you have to be able to play the system, in away cynically. I do not grudge anyone that. Yes, play the system. Don’t give upon the other stuff. I suppose my final and last bit of advice is: don’t be afraid because there is a hell of a lot to gain.

‍RV:       Thank you, Jayati. It was wonderful talking to you and thanks for participating in our interview series.

‍JG:        It was a pleasure.

(End of recording)

Jayati Ghosh is an Indian economist who was born in 1955. She has an undergraduate degree in Sociology from the University of Delhi and M.A., M.Phil. in economics from Jawaharlal Nehru University. She obtained her PhD in economics from the University of Cambridge in 1984.

She is a Professor of Economics at the University of Massachusetts at Amherst, USA since January 2021. Prior to this, she taught Economics at Jawaharlal Nehru University for nearly 35 years. She has held previous positions in Tufts University, University of Cambridge and served as the first Ragnar Nurkse Visiting Professor in Development Economics at Tallinn University ofTechnology, Estonia. Her research areas include development economics, gender and the economy, labour economics, international economics, trade and macro economic policy.

In 2021, Professor Ghosh was named by the United Nations in the High-level Advisory Board on Economic and Social Affairs. She has authored and/or edited 19 books and nearly 200 scholarly articles. Her recent books include the co-edited Handbook of Alternative Theories of Economic Development, (Edward Elgar, 2014), India and the International Economy (Oxford University Press, 2015), Demonetisation Decoded (Routledge, 2017) and Women Informal Workers in the Global South (Routledge, 2021).

Professor Ghosh has received several national and international prizes. She has advised governments in India and other countries. She is the Executive Secretary of International Development Economics Associates, an international network of heterodox development economists. She has consulted for international organizations including ILO, UNDP, UNCTAD, UN-DESA, UNRISD and UN Women and is member of several international commissions. She writes regularly for popular media like newspapers, journals, and blogs. 

Links:
University of Massachusetts at Amherst