Prabhat Patnaik’s Blog

It is common for governments these days to provide fiscal transfers to capitalists, whether through reduced corporate tax rates, or by providing direct cash subsidies, to encourage greater investment by them and thereby stimulate the economy. During Donald Trump’s first presidency there had been a cut in corporate tax rate with this objective in mind. In India the Modi government, as is well-known, has given massive tax concessions with the same objective. Even a minimum knowledge of economics however would show that such transfers to capitalists are counter-productive in a neoliberal regime. This is because such a regime is characterised…

Trump’s victory in the US Presidential election conforms to a pattern presently observable across the world, namely a collapse of the liberal centre and a growth in support either for the Left, or for the extreme Right, the neo-fascists, in situations in which the Left is absent or weak. This was visible in France where Macron’s party lost substantially, and the ascendancy of neo-fascism was prevented only by a hastily-formed Left alliance; this is also evident in our own neighbourhood, in Sri Lanka, where a Left candidate emerged as president through a sudden and substantial increase in his vote-share, defeating…

The Kazan summit of the BRICS countries was a historic one for several reasons: first, it created a new category called “partner nations” as a step towards full membership, and accepted 13 such new “partner” countries, among whom were Cuba and Bolivia. Second, it came out against unilateral economic sanctions that the US-led imperialist powers have been imposing on countries that dare to assert their independence from imperialist hegemony. Third, it suggested a programme of reform for the International Monetary and Financial System. The Kazan Declaration itself was brief in outlining measures to overcome the hegemony of the dollar, while…

This year’s Nobel Prize in economics (the Riksbank Prize to be more precise) has been awarded to three US-based economists for their research into what promotes or hinders the growth of wealth among nations; and they assign a crucial role to institutions, arguing that western institutions like electoral democracy are conducive to growth. Where colonialism led to the promotion of what they call “inclusive institutions” such as in settler colonies, growth flourished, but elsewhere in the colonial empire where colonialism set up “extractive institutions”, they turned out to be harmful for growth. Their work has aroused much criticism. Some have…

Several international organisations are now engaged in the business of measuring what they call “poverty”. The World Bank has been in it for some time, but now we have a new measure of “Multidimensional Poverty” brought out by the UNDP and the Oxford Poverty and Human Development Initiative (OPHI). Neither of these measures however actually measures poverty; they typically end up “prettifying” neo-liberal capitalism. In fact according to the World Bank’s estimate, the proportion of the world’s population that lives in “extreme poverty” (that is, below a daily per capita expenditure of $1.90 at 2011 purchasing power parity exchange rate)…

The fact that the world economy has slowed down since the financial crisis of 2008 is beyond dispute. In fact even conservative American economists have started using the term “secular stagnation” to describe the current situation (though they have their own peculiar definition for it). The purpose of the present note is to give some growth-rate figures to establish this particular point. Calculations of GDP, which are notoriously unreliable for particular countries, are even more so for the world as a whole. In India many researchers have questioned the official estimates of the growth rate of GDP, and have suggested…

West Africa, which had been largely under French colonial rule, never saw decolonisation of the sort that India did. For a start, the erstwhile French colonies’ currency continued to be linked to the French franc at a fixed exchange rate, which meant that they could not pursue any fiscal and monetary policy of their choice (for that would have threatened the fixed exchange rate). Not only were their foreign exchange reserves kept by France, as had been the case with colonial India where its gold reserves, acquired through enforced borrowing (since all its annual export surplus earnings were taken by…

During the entire post-war period when it has been in existence in the metropolitan countries, democracy has never been in as bizarre a state as it is today. Democracy is supposed to mean the pursuit of policies that are in conformity with the wishes of the electorate. True, it is not that the governments first ascertain popular wishes, and then decide on policy; the conformity between the two is typically ensured under bourgeois rule by the government deciding on policies in accordance with ruling class interests, and then having a propaganda machinery that persuades the people about the wisdom of…

During Modi’s visit to Ukraine (why he visited Ukraine at all at the present time remains a mystery), Zelensky asked India not to purchase fuel from Russia in violation of western sanctions, that is, to fall in line with the “unilateral” western sanctions. Let us for a moment forget the identity of the person making this suggestion, the fact that he rules Ukraine with the help of the followers of Stepan Bandera, the notorious Nazi collaborator during the second world war; let us also forget the present context there: a war brought on by NATO’s insistence on extending itself eastwards…

A Good deal of analysis of the recent political upheaval in Bangladesh has focussed on the high-handedness and authoritarianism of Sheikh Hasina’s government; it has either missed altogether, or generally underplayed, the change that has occurred in the economic situation in that country. A country that was being hailed as an economic “miracle” just a few months ago is now mired in an economic crisis that has suddenly worsened the living conditions of vast numbers of people. It is this worsening which underlay the remarkable rise in the unpopularity of the Sheikh Hasina government. The government was held responsible for…