Episode 35: Martha Nussbaum discusses the capabilities approach
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Why do economists criticize GDP as a measure of national prosperity?
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Hello and welcome to Elucidations, a philosophy podcast recorded at the University of Chicago. I'm Matt Teichman.
And I'm Mark Hopwood.
With us today is Martha Nussbaum, Ernst Freund Distinguished Service Professor of Law and Ethics at the University of Chicago. And she is here to talk with us about the capabilities approach. Martha Nussbaum, welcome.
Well, hi. It's great to be back on the podcast.
The capabilities approach has largely defined itself in contrast to other approaches to measuring how developed a country is. So maybe we could start by asking about one of the standard ways of measuring that, namely GDP. Do you think that GDP is a good metric for determining how prosperous a country is?
Okay, well, for a long time in the development world, people thought it was GDP per capita, of course. And they thought that it was just the best single number that you could have. Now, I think nowadays people doubt even that. that if you want a single number focused on economic issues, average household income is actually a more pertinent number because GDP picks up on foreign investment, and the profits of foreign investment are often repatriated by the investing nation, and therefore they don't actually improve the quality of life of the people in that country. So even the narrower type of economists that we're arguing against would nowadays prefer to use average household income. But beyond that, any single number that's an average fails to take distribution into account, and it can give very high marks to nations that contain staggering inequalities.
So that South Africa, under apartheid, where 95% of the country failed to qualify for the fruits of the nation's prosperity, would rank very high because there was a lot of stuff around there, never mind who controlled it. Now, that leads me to the second problem with GDP. It doesn't pick out and separately study a lot of different elements of the quality of a human life that are very pertinent to development. Things such as health, education, longevity, but also the quality of political liberties, religious liberty, race relations, gender relations. Now, the latter group, that is the political and civil and religious liberties, are not well correlated at all. with GDP as the staggering success of China and Singapore can show you right off the bat.
But even health and education, so even goods that look socioeconomic, are actually not that well correlated with the average GDP. My collaborators Amartya Sen and Jean Drez have for years studied the different Indian states where health and education are subjects that the Constitution gives to the states to manage. So it's like an experimental laboratory because the states pursue different economic initiatives, but they also run the health and education. And what we find is that pursuing a growth-based agenda doesn't trickle down to deliver improvement in health and education. So states like Andhra Pradesh and Gujarat that have shot for growth have not improved the quality of education and health, whereas Kerala, which is usually the gold star child of the development literature because it does have 99% adolescent literacy in both males and females against a background of 65% male literacy and 50% female literacy in the nation as a whole.
Kerala is actually a poor state whose economy has not grown well.
How does the capabilities approach differ from utility‑based metrics?
Now, I don't think that's good. I think they should have pursued different economic policies. But fact is, they've been able to improve not only education, but also health. Their health outcomes are the same as those of Harlem in New York. Now, that's shameful for the U.S. It shows you the staggering inequalities in our own system of health care distribution. But it's a pretty good thing for a poor state in India. So in short, it doesn't tell you how people are really doing. Now, maybe you would move on next to a utility-based approach that would measure how well people are doing by looking at total or average utility.
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Chapters
8 chapters
1
Why do economists criticize GDP as a measure of national prosperity?
0:00–4:02
2
How does the capabilities approach differ from utility‑based metrics?
4:02–7:36
3
What are the main problems with using average household income alone?
7:36–10:23
4
How do internal and combined capabilities explain gender inequality?
10:23–13:19
5
What objections arise about creating a universal list of capabilities?
13:19–16:57
6
How can the capabilities list be adapted to different cultural and constitutional contexts?
16:57–19:47
7
Which capabilities should policymakers prioritize to reduce inequality?
19:47–24:17
8
What practical steps can nations take to implement the capabilities approach?
24:17–28:37
Speakers
2 identifiedMore from Elucidations
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Episode 154: Greg Salmieri discusses free speech, "cancel culture," and "academic freedom"
Episode 153: Sam Enright discusses lifelong learning
Epsiode 152: Luca Gattoni-Celli discusses the housing crisis