The Resurgence of Inflation Prabhat Patnaik
The official wholesale price index for March 2021, which was released a few days ago shows it to be 7.39 per cent higher than for March 2020. Such a high rate of inflation has not been seen in India for over 8 years. It was only in October 2012 that the country had witnessed a 7.4 per cent inflation over the corresponding month of the previous year. The union government while releasing the index cautioned that since the country had witnessed a strict lockdown a year ago, the base figure on which inflation was being calculated was suspect, an underestimate…
Biden’s Package and Its Pitfalls Prabhat Patnaik
U.S. President Joe Biden’s $1.9 trillion rescue package is one of the most ambitious measures to revive the U.S. and, with it, the world economy. Coming on the heels of Trump’s $2 trillion package last year and a further $900 billion package announced in December 2020, it seeks not just to provide relief from the pandemic but to start a new boom in the U.S. which, it is expected, will have spill-over effects for the world as a whole, notwithstanding the protectionist measures against imports introduced in the U.S. under Donald Trump. It will also raise the U.S. fiscal deficit…
Ruling Classes and Concern for the Poor Prabhat Patnaik
When Elizabeth Warren a contender for American presidentship had proposed a progressive wealth tax during her campaign for Democratic Party nomination, 18 American billionaires had come out in support of her proposal; one cannot recall or even imagine any comparable behaviour in the Indian context. This is not because the American, or more generally Western, capitalists are particularly kind or generous towards those whom they exploit. It is because of their belief that the undisturbed functioning of the capitalist order in their countries requires a degree of concern on their part for the poor; it is a matter of their…
The IMF’s True Colours Prabhat Patnaik
The Covid-19 crisis has seen a very different response from the advanced countries compared to the third world countries. The former have unrolled substantial fiscal packages for rescue and recovery while the latter have been trapped in fiscal austerity. Among third world countries, India’s fiscal package has been perhaps the most niggardly, amounting to no more than one per cent of GDP; but even other third world countries have not fared all that much better. By contrast, the US under Trump had unrolled a rescue package of $2 trillion, which is 10 per cent of its GDP; and Biden has…
Fiscal Policy in a Bind Prabhat Patnaik
Even the blinkered BJP government sees the need for a fiscal policy that would stimulate the economy by increasing government expenditure; but it finds itself in a bind since it does not know how to finance such larger government expenditure. Simply spending more by borrowing, that is, by enlarging the fiscal deficit, is frowned upon by international finance capital, and our government, notwithstanding its much advertised “hyper-nationalism”, does not have the gall to violate the dictates of globalised finance. The question of enlarging government expenditure by borrowing therefore does not arise. At the same time, it cannot tax capitalists, whether…
Reviving the Economy through Incantations Prabhat Patnaik
Voltaire had said “one can always kill a man with incantations, plus a little poison”. Voltaire was a rationalist which the BJP government alas is not. It believes that one can revive an economy with incantations alone, for that is what the budget for 2021-22, presented a few days ago by the Finance Minister promises to do to the Indian economy. The Indian economy is supposed to have shrunk by 7.7 per cent during the fiscal year 2020-21 compared to the previous year, and it is supposed to rise by 10.5 per cent during 2021-22 compared to 2020-21 according to…
Biden’s Rescue Package Prabhat Patnaik
Even before taking office, Jo Biden, the new American president, has announced a rescue package of $1.9 trillion, of which as much as $1 trillion will be in the form simply of transfers to the working people. Since the estimated US GDP was $20.8 trillion in 2020, the size of Biden’s rescue package comes to almost 10 per cent of current US GDP. This is on top of the rescue package, again amounting to 10 per cent of GDP, that Trump had announced some time ago in the context of the pandemic. In fact Biden’s package is meant to continue…
A Dangerous Red Herring Prabhat Patnaik
In its systematic attempt to vilify the farmers’ movement against the three infamous agriculture bills that open peasant agriculture to corporate take-over, the government keeps using the argument that the opposition to these bills is confined to farmers only from a couple of states, that farmers from other states are happy with the bills. The falseness of this claim has been amply demonstrated, with the legislature in a state as far away as Kerala opposing these bills in a special session, and kisans in states like Tamil Nadu, Odisha, Maharashtra, and West Bengal, apart from Madhya Pradesh, Rajasthan and Uttar…
The Corporate-Hindutva Alliance and the Peasants Prabhat Patnaik
We are witnessing a bizarre situation. One comes across instances where consumers want growing of food crops for supplying to the public distribution system, while producers, lured by the apparent gains of shifting to cash crops, are reluctant to do so. The government has to mediate between these conflicting interests. But in India at present, the farmers have no desire to shift away from food crops, even as consumers want food crops to be supplied through the public distribution system. There is no conflict of interest among them that the government has to mediate between. And yet it is imposing…
Engels on the Peasant War in Germany Prabhat Patnaik
At a time when peasant masses in the country are engaged in a valiant struggle for the repeal of the Central government’s three infamous laws, and have laid peaceful siege to Delhi, braving rains and bitter cold, it is worth recalling Friedrich Engels’ study of the peasant war in Germany in 1525, that also celebrated its outstanding leader Thomas Muenzer. Such a recall becomes necessary for another reason. There is an impression among many that while the idea of a worker-peasant alliance was advanced by Lenin and taken up subsequently by Mao and other third world Communist revolutionaries, both Marx…