Prabhat Patnaik’s Blog

The last time the Indian economy had faced a serious macro-economic disruption, as distinct from the more or less steady poverty-enhancement that accompanies its growth performance, was in 2013, when the rupee had depreciated sharply. The fact that since then no similar disruption has appeared on the horizon, despite the country’s running a continuous current account deficit, has been because of two specific factors: the reduced international crude oil prices which have kept India’s import bill and hence current account deficit restricted; and the easy inflow of finance, owing to reduced U.S. interest rates, which have made shifting funds to…

In the wake of the take-over of Flipkart by Walmart, one is once again hearing an argument which one has often come across before, namely that having a large multinational in this sphere, which can do global sourcing for its products, will make goods cheaper for buyers and therefore be in the “consumers’ interests”. This argument is so old that it even goes back to the colonial times, when it was argued by many that imports from Britain, which had caused domestic deindustrialization by outcompeting the local craftsmen, had cheapened goods for the consumers and were therefore in the “consumers’…

Ashok Mitra who passed away on May1, 2018, was the doyen among Left intellectuals in the country, held in the highest esteem by one and all for his absolute integrity, his outstanding intellect and his commitment to the cause of the working people. Born on April 10, 1928, in the eastern part of undivided Bengal, he was a brilliant student who was drawn to the Communist movement and became an activist of the Student Federation. After Partition he stayed on in East Pakistan and even represented Pakistan at an international conference of progressive students held in India, where he first…

  Ashok Mitra’s achievements in both academia and public life made him exceptional Ashok Mitra who passed away on May 1, was a person of renaissance versatility. A major writer of prose in Bengali, he published several volumes of essays and was a recipient of the Sahitya Akademi award. A brilliant economist, he wrote two exceptional works, The Share of Wages in National Income and Terms of Trade and Class Relations, that would stand the test of time. As an economist working for the government, he held the posts of Chairman of the Agricultural Prices Commission and Chief Economic Advisor…

The Hindutva bubble has clearly burst. Not that efforts will not be made to form another bubble before the 2019 elections, but the one that had formed in the run-up to the 2014 elections and had carried the BJP to power is over. In the last few days, there have been mass demonstrations by peasants, traders, doctors, teachers, students and even school children. What is striking about these demonstrations is not just that the fear that had gripped people in the recent years is over and that they are willing to take to the streets to express their anger, but…

Orthodox economics has for long been haunted by the prospect that the growth in foodgrains output in the world economy would not be sufficiently high to sustain the growing population of the world. Malthus was an early exponent of this fear. Keynes too subscribed to the view that unless the poor countries somehow ensured that their population growth was controlled, there would be a food shortage in the world economy, of which growing poverty would be a symptom. This view of course was the product of an intellectual ethos which saw poverty as a consequence of excessive breeding, rather than…

Central to liberalism is a distinction between two spheres, the sphere of the market (or more generally of the economy) where individuals and firms interact to exchange their wares; and the sphere of public discourse where individuals interact as citizens of a polity to debate and determine the actions of the State. The importance that liberals attach to this second sphere was underscored by Walter Bagehot, the nineteenth century British essayist of liberal persuasion, who had lauded democracy as “government by discussion”. He had thereby emphasized two basic liberal political tenets, namely the role of public discourse and need for…

On March 8 Donald Trump made an announcement which according to many has the potential of starting a global trade war. He announced that the U.S. would be raising tariffs on imported steel by 25 percent and tariffs on imported aluminium by 10 percent. Now, the WTO allows tariffs under certain circumstances, against for instance some country that is “unfairly” subsidizing its exports, or is dumping its goods, which means charging higher prices on the domestic market for the same goods that are sold cheap in the export market. It also allows tariffs under a “safeguard” clause whereby a country…

The fact that the socio-economic effects of technological change depend upon the property relations within which such change occurs is obvious but often not appreciated. Consider a simple example. Suppose on a certain area 100 labourers were engaged for harvesting the crop at a total cost of Rs.5000; but the capitalist-landlord decides to use a harvester combine instead. Then the labourers’ income goes down by Rs.5000. The capitalist-landlord’s wage-cost goes down by Rs.5000, which accrues therefore as an addition to his profits. But suppose the harvester combine were to be owned by a collective of the workers. Then they can…