Prabhat Patnaik’s Blog

On April 3 this year, the minister of state for planning, Rao Inderjeet Singh, said in the Rajya Sabha that the government had no data after 2011-12 for estimating poverty, and therefore had no idea how many people had been lifted out of poverty since then. On July 18 however the UNDP announced that between 2005 and 2019, India had lifted 415 million persons out of poverty; it had of course no information for the post-pandemic period, but for the pre-pandemic period what it said generated much hype. What was missed in this hype however was not only that the…

Several major economists have put forward theories predicting a falling tendency of the rate of profit under capitalism; Marx had seen in this fact an awareness on their part of the essential transitoriness of the capitalist system. But while some of these theories have logical validity, others do not. Among the latter is Adam Smith’s theory. Adam Smith had attributed the falling tendency of the rate of profit to the fact of “excessive” capital accumulation. His argument was that in any particular industry, if more and more capital accumulates and more and more is produced, there would be a fall…

India and other third world countries can morally justify their being a part of G-20 alongside the imperialist powers, only if they raise common and pressing problems of the third world as a whole at G-20 meetings. Perhaps the most pressing of such problems today is the problem of external debt, which the current crisis of neo-liberal capitalism has brought to the forefront. India, as the chairman and host of the next G-20 meet, must raise the issue of relief from external debt for the third world at this meet. Much confusion however prevails on this issue which an excursus…

Fascistic elements exist in every modern society, but usually as fringe, marginal or minor elements. They move centre-stage only when they get the support of monopoly capital which provides them with ample money and media coverage; and this happens when there is a capitalist crisis that substantially increases unemployment and puts a question mark on the hegemony enjoyed by monopoly capital until then. The role of the fascistic elements in such a situation is to provide a diversion of discourse, so that the basic distress of living under a capitalism afflicted by crisis, is sought to be covered up through…

The Karnataka government’s plan to launch its “Anna Bhagya” scheme on July 1 under which it was planning to provide 10 kg of free rice per month to each family below the poverty-line has run into problems because of the Food Corporation of India’s unwillingness to sell any rice to that state. Since the current central scheme provides 5 kg of free rice to each BPL family, the Karnataka scheme would have provided an additional 5 kg per month to about 1.19 crore BPL and Antyodaya card-holders. Besides, the centre has been planning for some time to wind up its…

How exactly is the dollar’s status as reserve currency related to imperialism? This question has two parts: how this status of the dollar is related to U.S. imperialism, and how it is related to the overall imperialist arrangement. The dollar’s being a reserve currency makes it (and dollar-denominated assets in general) a medium of wealth-holding in the world economy, a role that precious metals, like gold, and to a lesser extent silver, have played historically. Currencies have for a long time played this role by being convertible to gold at a fixed rate, which was also the case under the…

After Sri Lanka and Pakistan, Bangladesh has become the third country in our neighbourhood to become afflicted by a serious economic crisis. It has asked for a $4.5 billion loan from the IMF, apart from $1 billion from the World Bank and $2.5-3 billion from multilateral agencies and donor nations. Though the government has put on a brave face, Bangladesh is facing a growing trade deficit, shrinking foreign exchange reserves, a rapidly depreciating currency, a record inflation and an energy crisis that has necessitated massive power cuts. Ironically, Bangladesh was being hailed just a few months ago as a success…

The estimates of India’s Gross Domestic Product for the fourth quarter of 2023 were released on May 31. These show a growth rate of 6.1 per cent over the fourth quarter of the previous year, which is higher than the 4.4 per cent growth that the October-December quarter had recorded over the corresponding quarter of the previous year. Taking the year 2022-23 as a whole, the growth rate of GDP over the previous year comes to 7.2 per cent, higher than the 6.8 per cent expected earlier by both the IMF and the Reserve Bank of India. The fact that…

Many economists these days talk of a process of “de-globalisation” taking place; some others talk of the neoliberal regime of yesteryears no longer existing. Of course, nothing remains the same forever: as the Greek philosopher Heraclitus had said “You cannot step into the same river twice”; some change in the neoliberal order therefore is inevitable with the passage of time. But the real point is: has the analytical frame used for understanding the economic reality of the contemporary world, with a view to changing it, become obsolete and hence in need of serious revision? “Globalisation”, it must be remembered, never…

Most people, including even trained economists, fail to appreciate the fact that an exchange rate depreciation, if it is to work in reducing the trade deficit in a capitalist economy, must necessarily hurt the working class by lowering the real wage rate. A capitalist economy, looking at it differently, improves its trade balance, for which it must improve its competitiveness, by lowering the real wage rate; and an exchange rate depreciation is one way of doing so. Most textbooks in economics do not mention this fact. They are written from the point of view not only of bourgeois economics in…