Asad Zaman — The Human Development Revolution

The Human Development approach of Mahbubul Haq was carried further by Amartya Sen, who defined development as the freedom to develop human capabilities. This notion, closely aligned with Eastern thought, was so alien to orthodox economists that they rejected it. Consequently, a new human-centred field of development studies emerged, which combined many streams of dissent from orthodoxy.

Freedom to develop human capabilities and human-centeredness are fundamental tenets of the Western liberal tradition that began in ancient Greece, as well as the philosophical raison d'être of the tradition.

This is the thrust of Aristotle's Nichomachean Ethics, for example, the analysis of which concludes that happiness (Gk: εὐδαιμονία eudaimonia) is a byproduct of the pursuit of excellence (ἀρετή arete). Eudaimonia literally means "good spirit." "Spirit" here is not some mystification but rather point to the non-material aspect of human being that makes a person a rational animal capable of theoretical and practical wisdom. Human are characterized by their having a rational principle (λόγον ἔχον).

Thus, humans can experience both happiness (eudaimonia), which is of the rational principle, and also pleasure (Gk: hedone), which is of the animal nature.

Happiness as "utility" is a Benthamite version of hedonism that views happiness as material pleasure , which Aristotle argued against as insufficient. J. S. Mill was aware of this distinction of Aristotle when he wrote with reference to Bentham:

It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are of a different opinions, it is because they only know their side of the question. — Utilitarianism: Chapter 2: What Utilitarianism Is (Part 1)

For Aristotle, happiness is a byproduct of living a good life in a good society, where a person progressively develops one's potential as both a human being and as an individual. All persons have the same potential as humans, that is, human excellence as a "spiritual" aspect, and all humans, being embodied and living in historical social circumstances, have a unique personality and individual potential both constitutionally (nature) and contingently (nurture). Human life is about living one's full individual potential socially and according to Aristotle, this can only be achieved by aiming for excellence as a human person.

Subsequently, Christian thinkers developed this in a theological context, and after the Renaissance, the Protestant Reformation, and the rise of capitalism, this was expressed naturalistically in Western liberalism, of which there are various strains, such as J. S. Mill in England and Wilhelm von Humboldt in Germany.

Unfortunately, economists adopted and adapted Jeremy Bentham's version, likely because it is a natural fit with homo economicus and it lends itself to mathematical tractability in terms of utility functions.

To deal with this, Zaman explains how Mahbub ul Haq developed the Human Development Index (HDI), which measures a variety of factors as indicators, as a better way to measure development than GDP, which measures development only in terms of wealth accumulation on a per capita basis.

The Human Development Index (HDI) is a composite statistic of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development. A country scores higher HDI when the lifespan is higher, the education level is higher, and the GDP per capita is higher. The HDI was developed by the Pakistani economist Mahbub ul Haq,[1] often framed in terms of whether people are able to "be" and "do" desirable things in their life, and was published by the United Nations Development Programme. — Wikipedia

Real-World Economics Review Blog
The Human Development Revolution
Asad Zaman | Vice Chancellor, Pakistan Institute of Development Economics and former Director
General, International Institute of Islamic Economics, International Islamic University Islamabad