The Hike in Petrol Prices Prabhat Patnaik
In the five days ending March 26, petrol and diesel prices in the country had been hiked four times, with more such daily hikes in the offing. On each occasion the hike had been by 80 paise per litre, so that the total increase during the week had been Rs 3.20 per litre, bringing the price per litre of petrol to Rs 98.61 and of diesel to Rs 89.87 in the capital city, Delhi. The explanation for these hikes is that the prices for the companies had remained frozen for some time (because of the elections in several states), even…
The Irony of Sanctions against Russia Prabhat Patnaik
The juggling which US imperialism has to do to maintain its hegemony becomes more bizarre by the day. First, it kept needling Russia (“provoking the bear”) “on behalf of the western alliance” by expanding NATO to its very borders, knowing full well that Ukraine’s joining NATO would be totally unacceptable to Russia. Its objective was to prevent Russia and western Europe from coming closer, which would have occurred because of the latter’s dependence on the former for energy; it is even reported that to keep hostilities going between Russia and Ukraine, it sabotaged an agreement between the two, that had…
Globalisation and the Relocation of Capital and Labour Prabhat Patnaik
The relocation of capital from the advanced capitalist countries of the north to low- wage countries of the south in the current era of globalisation has received much attention; but there is another kind of relocation that has not received as much attention, and that is of labour from comparatively lower-wage countries of Eastern Europe to the advanced capitalist countries. In fact since within the European Union there is generally free mobility of labour, this has become a powerful inducement for these Eastern European countries to join the European Union. Some of these countries have started displaying certain classic symptoms…
Sanctions within a Regime of Neo-liberalism Prabhat Patnaik
Before joining the neo-liberal order, India used to have “rupee payment arrangements” with the Soviet Union and Eastern European socialist countries under which the main international reserve currency, the US dollar, was used neither for settling transactions nor even as the unit of account in terms of which the trade-related transactions were denominated. The dollar in short was used neither as the means of circulation, nor even as the unit of account under these “rupee payment arrangements”. Instead, bilateral trade was denoted in terms of Indian rupees (or Russian roubles whose exchange rate against the rupee was fixed); and the…
The IMF Connection with the Ukraine Crisis Prabhat Patnaik
The security concerns of Russia arising from Ukraine’s intentions of joining NATO have been widely discussed in the media. But the IMF’s link with Ukraine which is a parallel issue has scarcely received much attention. The IMF, as is well-known, “opens up” economies around the world for the penetration of metropolitan capital by making them “investor-friendly” through the adoption of a host of anti-working class and anti-people (“austerity”) measures; and such “opening up” typically involves the taking over of natural resources of the countries and also their land areas by metropolitan capital. The mechanism that the IMF typically uses towards…
Imperialism as an Abiding Phenomenon Prabhat Patnaik
There is a common misconception that while the immediate aftermath of political decolonisation was marked by attempts by metropolitan powers to retain control over the resources of the erstwhile colonies, for which they used all kinds of instruments from coups to armed interventions against the newly independent governments, that period got over after a time. The metropolitan powers are now reconciled to the fact of political independence of their colonies; and whatever international arrangement prevails at present is the outcome of voluntary negotiations between countries, not of coercion exercised by some over others. While the concept of neo-colonialism, it is…
An Unimaginable Contrast Prabhat Patnaik
Much has been written about the immense increase in economic inequality that has occurred of late and various startling figures have been provided by bodies like Oxfam, which has just come out with a report titled Inequality Kills. This shows that the wealth of the 10 richest men has doubled since the pandemic began while the incomes of 99 per cent of the population of the world are lower today than before the pandemic. A mere 0.027 per cent of the world’s population is estimated to have owned a combined wealth of $45 trillion in 2020 which is more than…
Why Capitalist Governments worry more about Inflation than Unemployment? Prabhat Patnaik
Capitalist governments invariably seek to control inflation by enlarging unemployment. This has nothing to do with any belief in a stable “trade-off” between the two, namely in a stable curve that links the two. Even those who attribute inflation to other causes, such as excessive money supply (“too much money chasing too few goods”) and find the solution to it in monetary stringency, are in effect seeking to control it through larger unemployment since monetary stringency causes larger unemployment. This raises many questions. The first question is: why is this so? Why do governments not maintain high levels of employment…
A Budget whose Silences are Ominous Prabhat Patnaik
No budget in recent memory has been presented at a time when the economy is in such dire straits: unemployment is so bad that there are job riots in Bihar and UP; wealth and income inequalities are among the worst in the world; millions more have been pushed into poverty because of the pandemic and the lockdown; and inflation is accelerating even in the midst of massive unemployment. There is an urgent need for a strategy that promotes economic revival, while providing relief to the poor, and contributing to an abatement of inflation. The 2022-23 union budget should have spelt…
The Economy on the Eve of the Budget Prabhat Patnaik
The Indian economy is currently caught in a vicious spiral of inflation, stagnation, and a widening of the fiscal deficit. And this spiral is set to become even more vicious because inter alia of developments in the world economy. Even before the current omicron wave, the rate of GDP growth projected by official estimates for 2021-22 over the previous year was 9.2 per cent; but the previous year itself had witnessed a 7.3 per cent contraction because of the pandemic. Hence even if the official projection turns out to be true, the GDP in 2021-22 would be higher than in…