The Argument about Competitiveness Prabhat Patnaik
With the government being forced to withdraw from the RCEP agreement, an argument has arisen: if India is not competitive with other countries in producing a whole range of goods, which is why the producers of such goods within the country objected to the agreement in the first place, then why should it go on producing them? And a related argument states: in protecting uncompetitive producers, the country is penalizing consumers who would have otherwise accessed cheaper imported goods; is this not unfair? The immediate and obvious answer to the first question (we shall come to the second one later)…
A Dangerous Agreement to Sign Prabhat Patnaik
On October 24-25, there were widespread peasant protests all over the country against the Regional Comprehensive Economic Partnership (RCEP) involving sixteen nations which India is currently negotiating. As negotiations near completion, such protests are escalating, with the All India Kisan Sabha planning to organize a nation-wide protest on November 4th, just before the RCEP agreement is due to be signed. And the Kerala government too is organizing a protest. The sixteen nations involved in the RCEP comprise the ten ASEAN countries, and six others with each of whom the ASEAN has separate Free Trade Agreements, namely Japan, China, South Korea,…
India’s Rank on The Global Hunger Index Prabhat Patnaik
The news that India’s rank in 2019 according to the Global Hunger Index (GHI) was 102nd among the 117 countries for whom this index was calculated (it is not calculated for countries where hunger is not a problem), instead of causing consternation as it should have, has generated a rather inconsequential debate. This debate ironically has been concerned with two issues. One is whether India’s rank which was 55 in 2014 has fallen dramatically to 102 in 2019. And the second, where the Niti Ayog has been an active participant, is whether the direction of change in India with regard…
The World Economy in Decline Prabhat Patnaik
The European Central Bank last month pushed its benchmark interest rate to minus 0.5 per cent, which means that if it gives a loan of 100 euros then it would be paid back only 99.5 euros at the expiry of the loan. This has started a new trend: in countries like Germany, Spain, Italy, Czech Republic and even Greece, the yields on government bonds have been pushed into the negative region. Lenders to these governments in other words are willing to pay for holding government bonds. Longer term bonds typically have higher yields than shorter-term ones, but in Germany now…
A Counter-productive Measure Prabhat Patnaik
The Modi government has an unerring instinct for bungling in economic matters. It has come out with a “fiscal stimulus” for tackling the current economic slowdown that will actually make matters worse. After successive interest rate cuts which were predictably futile, it finally turned to fiscal means; but the measure it chose was a cut in the corporate tax rate. This has produced an absurd anomaly in the tax-structure, between personal and corporate income tax rates; but let us ignore this and look only at its macroeconomic impact. This slowdown is a consequence of inadequate aggregate demand whose roots lie…
The Opposite of what was Needed Prabhat Patnaik
The reduction in the corporate tax rate by the BJP government, which would entail a transfer of Rs.1.45 lakh crores from the public exchequer to the corporate sector, has been generally seen to be insufficient for overcoming the slowdown in the Indian economy. This is not just an understatement; it is actually erroneous. This measure is the very opposite of what was needed for overcoming the slowdown. It would aggravate the slowdown while imposing an increased burden on the working people, and making the income and wealth distribution in the country even more skewed that it would have been. The…
The 15th Finance Commission and Defence Expenditure Prabhat Patnaik
On July 29 the terms of reference of the Fifteenth Finance Commission were suddenly modified by a Presidential order. The Commission is now being asked to examine whether a separate mechanism for financing expenditure on defence and internal security should be set up, and how it can be operationalised. The basic idea behind this Presidential order which has already been discussed and approved by the Union cabinet is to make the expenditure on defence and internal security a charge on the gross tax revenue of the central government before the size of the divisible pool which the Centre has to…
Some Comments about Marx’s Epistemology Prabhat Patnaik
I Marx’s eleventh thesis on Feurbach: “the philosophers have hitherto only interpreted the world in various ways, the point is to change it”, has been often taken to mean that interpreting the world and changing the world are two separate and disconnected activities. This however is not true. In my student days I remember being struck by a Left-wing philosopher’s remark that “to interpret the world is to change it”. And it also stands to reason that one cannot change the world without interpreting it. The two activities in short are not disjointed; what did Marx mean then by the…
The Systemic Crisis of World Capitalism Prabhat Patnaik
The hallmark of a systemic, as distinct from a cyclical or sporadic, crisis of capitalism is that every effort to resolve the crisis within the broad confines of the system, defined in terms of its prevailing class configuration, only worsens the crisis. It is in this sense that neo-liberal capitalism has now entered a systemic crisis. It cannot be resolved by mere tinkering; and attempts to go beyond mere tinkering, for instance by introducing protectionism without transcending the broad framework of neo-liberal globalization, i.e. without overcoming the hegemony of international finance capital which is the moving force behind this globalization,…
Article 370 and Kashmir’s Land Reforms Prabhat Patnaik
Jammu and Kashmir was the first state in the country to introduce land reforms. There were two components of J&K’s land reforms. First, the system of absentee landlordism,that had prevailed during the Maharaja’s time was completely done away with. The land of the absentee landlords was taken over without any compensation and simply distributed among the tenants; whoever was cultivating whatever amount of land on the absentee landlord’s estate as tenant was simply given ownership of that much of land without having to pay any amount of money for obtaining ownership. Secondly, a land ceiling of 22 ¾ acres (182…
