The Prospect of Food Shortage Prabhat Patnaik

Orthodox economics has for long been haunted by the prospect that the growth in foodgrains output in the world economy would not be sufficiently high to sustain the growing population of the world. Malthus was an early exponent of this fear. Keynes too subscribed to the view that unless the poor countries somehow ensured that their population growth was controlled, there would be a food shortage in the world economy, of which growing poverty would be a symptom. This view of course was the product of an intellectual ethos which saw poverty as a consequence of excessive breeding, rather than…

The real confusion over MSP C.P. Chandrasekhar

Speaking at the Krishi Unnati Mela 2018, Prime Minister Modi reportedly complained that confusion is being spread about the announcement on minimum support prices (MSPs) made in the Finance Minister’s 2018 budget speech. The speech had assured farmers that they would in future be able to sell the output of notified crops to the official procurement agencies at prices to be set at a minimum of 1.5 times the cost of production. The confusion being created according to the Prime Minister relates to how costs of production would be calculated. In an attempt to clarify, he stated that beside costs…

Doyen of ‘Dependency Theory’ Sunanda Sen

Theotonio dos Santos (1936–2018), who passed away on 27 February in Rio de Janeiro, has been one of the major proponents of dependecia or dependency theory, along with Andre Gunder Frank, Giovanni Arrighi, Samir Amin and, to some extent, Immanuel M Wallerstein. Continuing to provide inspiration to large sections of people, including social scientists and activists in different parts of the world, dependency theory has been important for those interpreting the growing disparities between the advanced and the developing world. Santos had a particularly marked presence in Latin America, both through his writings and in his active involvement in political struggles against…

How unequal are world incomes? C. P. Chandrasekhar and Jayati Ghosh

In discussions of global inequality, there is general agreement that, whatever else may have happened, within-country inequality has increased in most cases, even as between-country inequality has come down. But overall, because of the recent emergence of countries with large populations like China and India, there has actually been some reduction in global inequality, because of increasing incomes in the “middle” of the global distribution. Chart 1 shows that, whether measured by the Gini coefficient (a measure of the dispersion of incomes of the population) or the Palma ratio (the ratio of the share of income of the top ten…

Technological Change and Impoverishment Prabhat Patnaik

The fact that the socio-economic effects of technological change depend upon the property relations within which such change occurs is obvious but often not appreciated. Consider a simple example. Suppose on a certain area 100 labourers were engaged for harvesting the crop at a total cost of Rs.5000; but the capitalist-landlord decides to use a harvester combine instead. Then the labourers’ income goes down by Rs.5000. The capitalist-landlord’s wage-cost goes down by Rs.5000, which accrues therefore as an addition to his profits. But suppose the harvester combine were to be owned by a collective of the workers. Then they can…

Agrarian Distress in India Jayati Ghosh

Across the country, farmers are furious – and rightfully so. Four years ago, they helped bring the BJP to power, believing Narendra Modi’s claims that they would no longer suffer official neglect. Cultivators were promised a doubling of their incomes in five years and many policies to increase their productivity and reduce their costs and risks. But since then, conditions in agriculture have got worse rather than better. Earlier problems have worsened as farm incomes have been squeezed by slower output growth, higher costs and increased vulnerability to changing climate. And there is a slew of new problems resulting directly…

National Income in India: What’s really growing? Jayati Ghosh

Recent income growth in India has been dominated by sectors that do not reflect real physical output increases – such as finance, insurance and real estate and public administration and defence.   National_Income  (Download the full text in PDF format) (This article was originally published in the Business Line on February 27, 2018.)

A Note on Estimating Income Inequality across countries using PPP Exchange Rates Jayati Ghosh

The use of exchange rates based on Purchasing Power Parities to compare income across countries and over time has become standard practise. But there are reasons to believe this could lead to excessively inflated incomes for poor countries and in some cases also inflate the extent of real changes over time. Estimates of gross domestic product growth in Chinese and Indian economies in recent years provide examples of this. ELRR_PPP_Exchange_Rates (Download the full text in PDF format) (This article was originally posted in the Economic and Labour Relations Review on January 30, 2018.)

Rising Incomes, Falling Wages Jayati Ghosh

It seems that everyone loves to talk about inequality, and how much they dislike it. From Christine Lagarde in the International Monetary Fund to the Indian Prime Minister speaking at the World Economic Forum in Davos, Switzerland, everyone is united in condemning inequality globally and in their own countries. But ironically, the ones – especially those in the public gaze – who are most vociferous about this also seem to be those who ultimately refuse to take any measures to deal with it, even when such measures are obvious and available. It is almost as if allowing people to vent…

The Dramatic Rise in Wealth Inequality Prabhat Patnaik

Oxfam has just produced a report in which it highlights the dramatic increase in wealth inequality that is occurring in India. The basic data it uses are from Credit Suisse which regularly brings out a Global Wealth Databook; and according to Credit Suisse the top 1 percent of the population in India cornered 73 percent of the additional wealth generated in the year 2017. This is an incredible figure in itself. What is more, this percentage, which refers to the latest year, is higher than the overall figure that had prevailed prior to this year, which was 58 percent. The…