Prabhat Patnaik’s Blog

There is an overwhelming asymmetry between the level of “development” and the possession of natural resources among countries of the world. Take the group of most advanced countries, the G-7 comprising the US, the UK, Germany, France, Italy, Japan and Canada. This group, while accounting for only 10 per cent of the world’s population, possessed over half of global net wealth as of 2020, and roughly two-fifths of the gross domestic product of the world (I have taken for convenience the mid-point of a range of estimates that lie between 32 and 46 per cent). Its economic might is indubitable;…

There is an impression shared by even progressive intellectuals that the entity that goes by the name of “physical infrastructure” is an absolute necessity in each country, and that the actual amount of infrastructure that exists is always less than what is needed. There is in other words no such thing as “too much investment” being made in infrastructure. Because of this no objections are usually raised to the magnitude of resources that are devoted towards building such infrastructure. The criticisms that are levelled against infrastructure plans usually focus on issues such as the feasibility of the plans, whether the…

Finance Minister Nirmala Sitharaman made a misleading statement the other day that is not expected from a responsible member of the union cabinet. Talking about the resource transfer to the states in the recent budget, she said that the magnitude of transfer had been raised “sharply” (The Hindu February 11). Now, this statement, while creating the impression that the centre has been very “generous’’, gives absolutely no figures on any actual increase in transfer from the centre that would support the claim. An examination of the figures shows that no matter what category of transfer is considered, there is a…

Gautam Adani’s calling Hindenburg’s allegations of fraud against him an attack on the Indian nation is a matter of particular significance. Just before this episode, the BBC documentary on Modi had been labelled a product of the colonial mindset by the government and hence also construed to be an attack on the Indian nation. Adani would not have dared to equate himself with the nation, exactly the way Modi had done, unless he was certain that Modi would concur with such equating. Both Modi and Adani in short see their respective selves, and each other, as the embodiments of the…

The most outstanding feature of the Indian economy today is the sluggish increase in real consumption expenditure. Between 2019-20 and 2022-23 for instance the per capita real consumption expenditure has grown by less than 5 per cent which is less than the rate of growth of the gross domestic product. Even the meagre recovery from the depths of the pandemic in short has been investment-led rather than consumption-led. This has two obvious problems: first, such a recovery is patently unsustainable; it would simply lead to a pile-up of unutilised production capacity, of unused infrastructure, and hence of unrecoverable loans by…

Economic theory makes much of “rent goods”. A “rent good” is one whose supply cannot be augmented at will, simply through investing more on its production; its supply is subject to constraints imposed by nature, because of which there is a certain maximum rate of long-run growth which is exogenously given and cannot be altered at will. If this good is used as an essential input for the production of other goods, then the long-run growth of other goods too gets tethered to this exogenously given maximum rate of growth of the rent good. The rate of growth of the…

All regimes based on class antagonism require a discourse to legitimise class oppression and this discourse in turn requires a vocabulary of its own. The neoliberal regime too has developed its own discourse and vocabulary and a key concept in this vocabulary is “populism”. This concept is given great currency by the media, which is peopled by members drawn from the upper middle class who have been major beneficiaries of the neo-liberal regime and have therefore developed a vested interest in its continuation. So pervasive is the reach of this concept that even well-meaning and progressive members of the literati…

The IMF managing director Kristalina Georgieva has now openly admitted that the year 2023 will witness the slowing down of the world economy to a point where as much as one-third of it will see an actual contraction in gross domestic product. This is because all the three major economic powers in the world, the US, the European Union, and China, will witness slowdowns, the last of these because of the renewed Covid upsurge. Of the three, Georgieva believes, the US will perform relatively better than the other two because of the resilience of its labour market; indeed the greater…

India’s current account deficit for the second quarter (July-September) of 2022-23 has reached a massive $36.4 billion which is 4.4 per cent of the gross domestic product, higher than at any time in the last nine years. It is only in October-December 2012 that the absolute level of the current deficit had been $32.6 billion which was 6.7 per cent of the GDP. By contrast the current account deficit had been $18.2 billion in the first quarter of 2022-23 or 2.2 per cent of GDP, and $9.7 billion or 1.3 per cent of GDP in the second quarter of 2021-22,…

The hegemony of imperialism is invariably associated with an agrarian crisis in countries of the global south; in fact agrarian crisis is just the other side of the ascendancy of imperialism. This is evident from the case of Indian agriculture. The colonial period saw a more or less perpetual agrarian crisis, whose starkest manifestation was in the form of recurring famines. Colonial rule in India began with the East India Company acquiring the revenue-collecting rights over Bengal from the Mughal Emperor Shah Alam in 1765. Within five years, in 1770, Bengal was devastated by famine, perhaps the worst famine ever…