A Dangerous Course Prabhat Patnaik
Despite repeated demands by the states the Centre still has not released what is their legitimate due, namely the compensation for their revenue loss owing to the introduction of GST; this has not been paid since August. Meanwhile the Covid-19 pandemic, while adding to the responsibilities of the state governments, has dried up their revenues owing to the lockdown. The main sources of revenue now left to them, leaving aside GST, are taxes on petro-products and alcohol, and stamp duty. Since petro-product sales have plummeted during the lockdown, they can hardly hope to get anything from this source; likewise with…
The End of Globalization Prabhat Patnaik
In an editorial on April 3, The Financial Times of London wrote: “Radical reforms in reversing the prevailing the policy direction of the last four decades will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investment rather than as liabilities and look for ways to make the labour market less insecure. Redistribution will again be on the agenda… Policies until recently considered eccentric such as basic income and wealth taxes will have to be in the mix.” One generally associates such views with…
Finance’s Preference for the Metropolis Prabhat Patnaik
The current globalization was always legitimized by the argument that capital today, unlike in colonial times, had become blind to racial and other such distinctions across countries in deciding upon its location; it would now flow wherever opportunities for profitable investment existed. Given the lower wages in the third world and hence greater profitability of locating plants there rather than in the metropolis, this would now ensure not a cumulative divergence between the metropolitan and third world countries as had happened earlier, but, on the contrary, an elimination of this divergence. The third world countries were asked to allow foreign…
The Exodus of Finance from the Third World Prabhat Patnaik
There is an exodus of finance from the third world at present, far exceeding in scale what had occurred in 2008 after the financial crisis. Even more important than the actual outflow is the desire on the part of finance to pull out of the third world, including even the so-called “emerging markets”, and move to U.S. dollars or dollar-denominated assets. This is resulting is a depreciation of a host of third world currencies vis-à-vis the dollar, of which the Indian rupee is an obvious example. This is paradoxical at first sight. After all, the U.S. is the country at…
The “Sink” for Indian Capitalism Prabhat Patnaik
The distress to which lakhs of migrant workers were suddenly exposed by the Narendra Modi government’s decision to announce a three-week-long lockdown at four hours’ notice with zero planning, has also highlighted a crucial aspect of the Indian economy. This consists in the fact that the village, with its agriculture-based economy and joint-family system, continues to remain the support-base for crores of urban workers who are perennially exposed to the vicissitudes of life under capitalism. When they were suddenly made income-less and homeless, and were literally thrown on the streets, the overwhelming thought in their minds was to get back…
Finance versus the People in the Era of the Pandemic Prabhat Patnaik
The current pandemic has brought to the fore, and with exceptional clarity, the fundamental contradiction underlying contemporary globalization, namely, the contradiction between the interests of finance and those of the people. Indeed this contradiction, which characterizes the era of globalization as a whole, has now come to a head. It is becoming clearly visible in country after country. Take the case of India. Millions have been suddenly rendered jobless, and lakhs of migrant workers trekking home from faraway places, where they had been employed but no longer are, find themselves quarantined with little or no money. The paramount need of…
The Making of a Tragedy Prabhat Patnaik
The tragic irony could not have been more complete. The country is under lockdown, but thousands of migrant workers are thronging bus stands or marching on the roads, making a mockery of it; the aim of the lockdown is to prevent the spread of the pandemic, but the mass exodus can now carry the virus to the hitherto-unaffected rural India where the healthcare system is pathetic; the idea is to prevent a virus-caused human tragedy, but an immense human tragedy is now unfolding. This is something that happens when measures are taken without proper planning and adequate preparation, as the…
Pandemic and Socialism Prabhat Patnaik
It is said that in a crisis everybody becomes a socialist; free markets take a back seat, to the benefit of the working people. During the second world war for instance, when universal rationing was introduced in Britain, the average worker became better nourished than before. Likewise, private companies get commandeered to produce goods for the war effort, thus introducing de facto planning. Something of the sort is happening today under the impact of the pandemic. In country after country there is a socialization of healthcare and of production of some essential goods, which markedly departs from the capitalist norm;…
Some Basic Lessons from the Pandemic Prabhat Patnaik
The coronavirus attack has so far been much less deadly than the Spanish flu of a century ago. That had affected 500 million people worldwide, about 27 per cent of the world’s population of the time, and had a death rate of about 10 per cent among those affected. (Estimates of death vary greatly; this is a sort of mean). In India alone 17 million people are estimated by some to have died because of it. By contrast the coronavirus has affected, to date, less than two lakh people worldwide, and has a death rate of about three per cent…