Book: Commodities and Capabilities

Overview
"Commodities and Capabilities" develops a systematic alternative to assessing human well-being that shifts attention from commodities and utility to what people are actually able to do and be. The central move is to treat freedom to achieve different "functionings" , the various states of being and activities that people value , as the primary focus of evaluation. Commodities matter only insofar as they help expand those real freedoms, and assessments of social arrangements should look at people's capability sets: the substantive opportunities available to them.
Rather than proposing a single metric, the approach emphasizes comparative evaluation of lives by reference to capabilities, recognizing diversity in needs and circumstances. This way of thinking recasts classical welfare economics, social choice, and development policy questions by foregrounding human diversity, conversion factors, and agency.

Core Concepts
Functionings are the achievements of a person, ranging from basic nutrition and mobility to more complex states like participating in community life or exercising political freedoms. Capabilities are the combinations of functionings that a person can choose between , the real opportunities open to them. The distinction between achieved functionings and available capabilities highlights why identical resource bundles can lead to very different well-being outcomes for different people.
Conversion factors explain these differences: personal characteristics (age, sex, health), social norms, and environmental conditions affect how commodities translate into functionings. A bicycle, for example, confers more mobility to a healthy adult than to someone with a disability; social constraints may prevent women from converting resources into equivalent choices. Recognizing conversion factors makes evaluations sensitive to equality of opportunity rather than mere equality of resources.

Methodological Innovations
The capability approach reframes measurement and comparison problems that plagued prior frameworks. Instead of relying solely on income or utility, it calls for plural, context-sensitive indicators that reflect what people can actually do and be. This leads to methodological pluralism: qualitative and quantitative measures, participatory assessments, and attention to distribution across capability sets rather than averages alone.
Sen also links the capability perspective to social choice theory, arguing that collective decisions should respect the plurality of values and the importance of freedom. He demonstrates how focusing on capabilities can resolve paradoxes in welfare comparisons and provides a basis for claims about justice, rights, and human development that is resistant to purely utilitarian or resource-based objections.

Policy Implications
Public policy should aim to expand real freedoms and remove unfreedoms that prevent people from converting resources into valued functionings. This reframing influences priorities in health, education, and social protection by asking whether interventions genuinely increase capabilities. Policies evaluated by capability expansion may prioritize healthcare that improves functioning or public infrastructure that enhances conversion opportunities, even when income effects are modest.
The approach also supports participatory and pluralistic policymaking, since people differ in what they value and in how they convert means into ends. It encourages designing social institutions that enable choice and foster agency, not merely delivering commodities or maximizing aggregate utility.

Critique and Legacy
The capability approach inspired a vast interdisciplinary literature and practical tools, such as human development indices and capability-based program evaluations. Its strengths lie in normative clarity, sensitivity to diversity, and applicability across contexts. Critics, however, point to challenges of specification and measurement: choosing which capabilities matter, measuring capability sets, and operationalizing the framework for policy comparison can be difficult and contested.
Despite these challenges, the capability perspective remains a powerful lens for thinking about justice, development, and human flourishing. Its emphasis on real freedoms reshapes debates about equality, poverty, and well-being by centering what people are actually able to be and do.