Prabhat Patnaik’s Blog

At the last Spring meeting of the IMF and the World Bank, Christine Lagarde, the Managing Director of the IMF, had confidently stated that the world economy was on the path of recovery, a view echoed by most official soothsayers of the system. And yet within days of Lagardes’ remark, fresh data showed that the U.S. economy whose tentative recovery had been the cause of this optimism, was once more slowing down. Since Europe had never really shown much recovery anyway, and since China and India, whose earlier resilience owed much to an unsustainable expansion of credit (C.P.Chandrasekhar, Frontline, May…

Globalization has brought acute distress to the working people all over the world. This distress is not confined only to the period of the post-housing-bubble crisis; nor is it confined only to the workers of the advanced capitalist countries. Joseph Stiglitz’s finding that the average real wage of a male American worker in 2011 was somewhat lower than in 1968 clearly suggests that this distress has had a long duration. Likewise the presumption that the distress afflicts only the advanced country workers whose job opportunities have shrunk because metropolitan capital has been relocating economic activity to low-wage third world countries,…

Last month the Supreme Court made two important pronouncements in the space of just a few days. One was on the question of who had ownership rights over the land at the Babri Masjid site; the other was on the location of bars or liquor shops within five hundred metres of highways. On the first of these the Supreme Court made only an oral observation: it suggested an out-of-court settlement, with the Chief Justice himself offering to act as an intermediary in the negotiations. On the second the Supreme Court passed an order that no bars or liquor shops could…

Some weeks ago when the official “quick estimates” of GDP for the third quarter of 2016-17 (October-December) had been released, putting the GDP growth in this quarter (over the corresponding quarter of 2015-16) at 7 percent, which broadly conformed to the CSO’s prediction before demonetization, a veritable chorus had gone up that the critics of demonetization had been proved wrong, that the measure did not have the recessionary effect they had claimed it would. The fact that this growth estimate was spurious, produced at the behest of the BJP government which specializes in “post-truths”, was pointed out by many (see…

Comrade B.T. Ranadive used to reminisce that in pre-independence Bombay (as it was then called) there would occasionally be impressive workers’ strikes at the call of Communist-led trade unions which were powerful in the city at that time, at which Hindu and Muslim workers would stand shoulder to shoulder. Not surprisingly however, given the colonial context, these strikes were not always successful, and, when that happened, they would often be followed by communal riots. This cycle, of unity followed by horrendous disunity leading even to communal riots, was an expression of contending forms of consciousness among the workers: a budding…

True to form, the BJP government is all set to change the texture of the Indian State into a snooping and terrorising institution whose bonding with corporate capital will now get even closer and beyond any public scrutiny. And the content of the change it is unleashing is as damaging to democracy as the manner in which it is doing so. The manner of its doing so consists in introducing important legislation in the guise of “money bills”. Now, any important legislation has to be approved by both houses of parliament before it can become the law of the land,…

Donald Trump’s recipe for reviving employment in the U.S. economy is to impose restrictions on imports from other countries. If at the same time he had taken steps to increase the level of aggregate demand in the U.S. in other ways, such as through increasing State expenditure financed by a fiscal deficit, then restricting imports from other countries would not lead to a reduction in the magnitude of such imports in absolute terms. It would not, in such a case, cause any unemployment in other countries for the sake of boosting employment in the U.S. Put differently, it would not…

In his speech to BJP workers in Delhi after the Assembly election results had been declared, Narendra Modi announced that his policy henceforth would be to empower the poor by providing them with opportunities, instead of handing out doles to them, which, he believes, is what the various “pro-poor” welfare programmes amount to. Newspapers were quick to underscore, and in general laud, this shift in approach from “welfarism” to “development”. Since government policy is set to reflect this shift from now on, its implications are worth examining. Nobody obviously prefers “doles” to development, neither the recipients of these “doles” nor…

Perhaps no other public policy debate in post-independence India has seen as much of an “inversion of reason” on the part of the government as the demonetization debate. When critics were pointing, on the basis of government statistics themselves, to the palpable failure of the demonetization measure to achieve its purported objective, which was to cripple the black economy, the government kept harping, in its justification, on the extraordinary “boldness” of the move. Its position in effect amounted to saying that any move, no matter how irrational, is justified if it involves “courage”, i.e. invokes “shock and awe”, which was…

Finance capital is always opposed to the use of fiscal measures for stimulating an economy. This is because any such fiscal stimulation undermines the social legitimacy of capitalism, and especially of that segment of it which constitutes the world of finance and which is peopled with “functionless investors” in Keynes’ words or of “coupon clippers” in Lenin’s words, i.e. of entities that play no role in the production process. If State intervention comes to be seen as necessary for stimulating the economy, then the question may arise in the public mind: why do we need all these entities? Why does…