Prabhat Patnaik’s Blog

In The Junius Pamphlet written from jail in 1915, Rosa Luxemburg had said that the choice before mankind was between barbarism and socialism. Liberal opinion would contest this, arguing that the barbarism that marked the two world wars and the period in between was unrelated to capitalism; indeed the liberal tendency that comes to the fore under capitalism, it would claim, fought against the barbarism of that period. Capitalism, it would assert, has been characterised by the ascendancy of humane values to an unprecedented extent, as the post-war years have shown. To talk about humane values coming to the fore…

There are well-known problems associated with the concept of gross domestic product as well as with its measurement. The inclusion of the service sector within GDP is something that Adam Smith would have objected to on the conceptual grounds that those employed in this sector constituted “unproductive workers”; certainly in the former Soviet Union and East European socialist countries, it was not the GDP but the gross material product excluding the service sector that was considered the relevant measure. Even if the service sector is included in GDP, there is a conceptual problem associated with measuring its output, since what…

The unemployment situation is worse today than it has ever been in post-independence India. There are two distinct elements that have contributed to this situation. One is the fact that the output recovery from the fall caused by the pandemic-linked lockdown has not been accompanied by a comparable employment recovery. In fact, even though the gross domestic product in 2023-24 is estimated to be larger than in 2019-20 by about 18 per cent, employment has shown zero growth over the last five years according to the Centre for Monitoring the Indian Economy. This fall in the employment-intensity of GDP is…

The significance of Lenin’s Imperialism lay in the fact that it totally revolutionised the perception of the revolution. Marx and Engels had already visualised the possibility of colonial and dependent countries having revolutions of their own even before the proletarian revolution in the metropolis, but these two sets of revolutions were seen to be disjoint; and both the trajectory of the revolution in the periphery and its relation to the socialist revolution in the metropolis remained unclear. Lenin’s Imperialism not only linked the two sets of revolutions, but also made the revolution in the peripheral countries a part of the…

We observe a strange phenomenon everyday, so strange that its strangeness goes generally unnoticed. Government spokespersons from the prime minister downwards go on repeating ad nauseam that India is the most rapidly growing major economy in the world today, that it will soon become a 5 trillion dollar economy, and that it has overtaken China in terms of the growth rate of the gross domestic product. And yet the same government spokespersons claim that the government has no money to pay for the old pension scheme for government employees, let alone for a proper universal non-contributory pension scheme for the…

Argentina’s new president Javier Milei proposes to use US dollars as the currency of his country, while abolishing its central bank altogether. What is involved in this proposal is not just maintaining a fixed exchange rate between the dollar and the domestic currency, but an abolition of the domestic currency altogether. The maintenance of a fixed exchange rate does not preclude the central bank of the country printing more of the domestic currency whenever there is a demand for more domestic currency, while using an array of instruments to ensure that there is no shift to dollars from the domestic…

Imperialist hegemony over the third world is exercised not just through arms and economic might but also through the hegemony of ideas, by making the victims see the world the way imperialism wants them to see it. A pre-requisite for freedom in the third world therefore is to shake off this colonisation of the mind, and to seek truth beyond the distortions of imperialism. The anti-colonial struggle was aware of this; in fact the struggle begins with the dawning of this awareness. And since the imperialist project does not come to an end with formal political decolonisation, the education system…

Imagine a country that is exposed to relatively unrestricted trade. There are two obvious problems that it can face because of this trade policy: the first is a balance of payments problem because its exports are insufficient relative to its imports. And the second is the creation of unemployment, and more generally of domestic resources remaining idle, because domestic goods cannot compete with imports. These two are not identical problems, in the sense that there can be unemployment in the absence of an import surplus, as had happened in the colonial period when there was domestic “deindustrialisation” causing massive unemployment…

Neo-Liberalism propagates a set of outright falsehoods to present itself in a favourable light compared to the preceding dirigiste regime in India. The basic theme is to suggest that under neo-liberalism there has been such an acceleration of the growth rate of Gross Domestic Product that the people as a whole have become much better off, and vast masses of them have been lifted out of poverty (one particular enthusiast has even claimed that poverty now afflicts only 2 per cent of the population). Of course the dirigiste period was not all milk and honey, and nobody criticised it more…

The wisdom of pursuing a strategy of export-led growth has been discussed among development economists for at least half a century, ever since the so-called East Asian “miracle” started to be contrasted with the comparatively sluggish growth experience of countries like India that were pursuing, in the World Bank’s language, an “inward looking” development strategy. This entire discussion however has missed an element that plays a crucial role in real life. Among the various expenditures that constitute aggregate demand in an economy, some are autonomous while others are induced by the growth of aggregate demand itself. Exports and government expenditure…