Why didn’t Socialism have Over-production Crises? Prabhat Patnaik

Socialism has collapsed over large tracts of the globe. Where it still exists, the economic regimes have undergone considerable reforms. Not surprisingly therefore the old socialist regimes are objects of much vilification these days. While capitalism, understandably, has a vested interest in promoting such vilification, the Left opponents of capitalism continue to remain too shell-shocked to counter it. There were to be sure serious problems with the earlier socialist regimes, which manifested themselves above all in a de-politicization of the working class whose class dictatorship they were supposed to represent. But at the same time it must never be forgotten…

Once again, the Oil Price Scare C. P. Chandrasekhar and Jayati Ghosh

The news last week that prices of Brent Crude oil (which is used as a global benchmark) had crossed $80 a barrel in some markets must have created shock waves in policy circles of many countries, especially India. Many oil-importing countries had grown comfortable with – and even complacent about – the relatively low oil prices that persisted after their precipitous drop in the middle of 2014. As Chart 1 shows, average oil prices feel very sharply after June 2014, falling by 56 per cent just in the months until January 2015, and by more than 70 per cent from…

How to End Hunger Hilal Elver and Jomo Kwame Sundaram

Last September, world leaders made a commitment to end hunger by 2030, as part of the United Nations Sustainable Development Goals (SDGs). It sounds like a massive undertaking. In fact, the world already produces enough food to feed everyone. So why does the problem persist? Poverty and hunger are intimately connected, which is why the SDGs target elimination of both. For someone living at the World Bank’s poverty line of $1.90 per day, food would account for some 50-70% of income. The Bank estimates that almost four-fifths of the world’s poor live in rural areas, though those areas account for…

Trend Reversal in Oil Markets? C.P. Chandrasekhar

In early June 2016, the price of US West Texas Intermediate (WTI) crude oil crossed the $50-a-barrel mark for the first time since July the previous year, having risen from lows of around $25 a barrel in February.  A gradual reversal of the previous steep decline had begun. This had set off speculation that the world economy is entering a new phase of the oil-cycle with prices expected to touch upward of $60-a-barrel by the end of the year. Interestingly, there were two different interpretations of the factors underlying this turn. Some argued that this was evidence of a demand…

When Commodity Prices Fall C.P. Chandrasekhar and Jayati Ghosh

The decline in primary commodity prices over the past four years particularly last year, shows that financialisation of commodities has amplified and exaggerated instabilities and fluctuations. Commodity_Prices_Fall (Download the full text in PDF format) (This article was originally published in the Business Line, April 25, 2016.)

A Different Oil Shock C.P. Chandrasekhar

In a curious shift in perception, low and falling crude oil prices are increasingly being viewed as a disadvantage rather than a benefit to the global economy. The spot price of Brent crude has fallen from just above $100 a barrel at the beginning of September 2014 to around $27 a barrel in mid-January 2016—a close to 75 per cent collapse over a 17-month period. The decline is giving rise to jitters on what it would do to an already sluggish global economy. That marks a shift, since initially the downturn in oil prices, which had been fluctuating in the…

Why the Fixed External Reference Price of 1986-88 should be Challenged Jacques Berthelot

The author argues that there is no reason to differentiate between the administered prices paid to farmers in developing countries and the so-called market prices paid in developed countries as the latter, being heavily subsidized, are not actual market prices. External_Reference_Price (Download the full text in PDF format)

Commodity Supercycle: A “myth” explained Manuel Riesco

In the Financial Times of 31 August 2015, a piece entitled “Why the commodities super cycle was a myth” concludes that “falling prices show the world is not running out of resources”. It is rather the case that falling prices show that speculative capital is flowing out of commodities, as advanced economies start to recover – in however sputtering a manner – from the secular crisis that began in 2000. In recent weeks, the copper price has fallen under 2.3 dollars per pound, exactly half its historical maximum reached at the beginning of 2011. Pitifully, if the world economy repeats…