Prabhat Patnaik’s Blog

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 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…

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 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…

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;…

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…

The crisis at Yes Bank is only the concentrated expression of a deeper malaise afflicting the Indian banking system as a whole, namely its vastly increased financial fragility. The Chief Economic Advisor is no doubt right when he assures depositors, through the media, that the Indian banking system is quite stable; but this still does not negate the fact that it has become more fragile. The Congress Party is no doubt right in claiming that the crisis of Yes Bank is because of a phenomenally rapid increase in its loans over the last five years, from Rs.55633 crores in 2014…

Changes in estimation methods have of late made statistics on the Indian economy increasingly bewildering; besides, whenever the statistics show the performance of the economy in a poor light, the BJP government simply suppresses them. Nothing however can suppress the fact that the Indian economy is sliding into a serious state of stagnation. The third quarter (October-December) GDP estimates which have just been released show a 4.7 per cent growth over the corresponding quarter last year, which comes on the heels of a 4.5 per cent growth in the second quarter. The National Statistical Office (NSO) now believes that the…

Class struggle occurs in the realm of concepts too. The World Bank for instance systematically counters Left concepts by employing a novel tactic: it uses the very same concepts as are used by the Left, but gives them a wholly different meaning; as a result they either come to mean something entirely different from what the Left had originally meant by them, or, at the very least, they become fuzzy and hence useless to the Left. In either case the power of the Left concept is neutralized. For example, the term “structural” used to be an integral part of the…

These notes are meant to clarify a point made earlier (Peoples’ Democracy, June 30, 2018) about the erstwhile socialist economies not having over-production crises as capitalist economies do. It is in the nature of capitalism to have “over-production crises”, i.e. crises arising from “over-production” relative to demand. “Over-production” does not mean that more and more goods keep getting produced relative to demand, so that unsold stocks keep piling up. This may happen only for a brief period in the beginning; but as stocks pile up, production gets curtailed, causing recession and greater unemployment. “Over-production” in short is ex ante, in…