Demonetization as a Means of Fighting “Black Money” Prabhat Patnaik

So many lies are being spread by the government which is currently busy wrecking the Indian economy in the manner of a bull in a china shop, so many spurious economic arguments are being trotted out by it, that one has to be extremely vigilant not to be swept away by this tide of unreason. In the current article, and the two subsequent ones to follow, I propose to examine some of the more persistent assertions that are being made by government spokesmen. The most persistent assertion of course is that demonetization is a measure against “black money”. In an…

The Chimera of a ‘Cashless’ Economy Prabhat Patnaik

A secondary justification for the demonetization of 500 and 1000 rupee notes, apart from its presumed deterring effect on “black money”, is that it ushers in a move towards a “cashless” economy. This argument too, however, like the perception that “black money” is just held in the form of a hoard of currency notes, is staggering in its simple-mindedness. All money constitutes a liability of the banking system. (The only exception was the one-rupee note which was a liability of the Government of India, but its amount, always small, has now dwindled into insignificance). What we call “currency” is the…

Demonetization of Currency Notes Prabhat Patnaik

Narendra Modi went on national television at 8 p.m. on November 8 to announce that from midnight of that very date, i.e. in a mere four hours’ time, 500 and 1000 rupee notes would cease to be legal-tender. The justification advanced for this bizarre move was that it would strike at “black money”. An additional argument was thrown in, to the effect that fake currency notes used by “terrorists” would now cease to be effective; and some particularly enthusiastic supporters of the government even went to the extent of calling it a “surgical strike against terrorism”. I shall come to…

The Spontaneity of Capitalism Prabhat Patnaik

  The post-war restructuring of capitalism involving decolonization, the introduction of Keynesian demand management, and the institution of democracy based on universal adult suffrage, represented concessions made by the system to ward off the Communist threat which the enhanced prestige of the Soviet Union, the march of the Red Army across Eastern Europe, the sacrifices made by the Communists in the anti-fascist struggle all over Europe, and the Chinese Revolution had brought to the fore. True, the Yalta agreement had bound the Soviet Union into not supporting Communist ascendancy in Western Europe, in countries like France, Italy and Greece, in…

Globalization and the Impasse of Capitalism Prabhat Patnaik

I feel greatly honoured that I have been asked to deliver the Harold Wolpe memorial lecture for the year 2016. Harold Wolpe was an outstanding thinker who combined political activism for the liberation of the South African people with deep insights into the economic basis of apartheid. I am indeed grateful for this opportunity to pay my tribute to this remarkable person who in my view constitutes a role model for anyone aspiring to be a social scientist. Since a good deal of Harold Wolpe’s theoretical work was concerned with the value of labour power, and hence by implication with…

Developing “Infrastructure” Prabhat Patnaik

The term “infrastructure” covers all sorts of things, from ports to roads to canals to bridges to building railway lines. Because it covers such a range of things, many of which appear to be useful, most people look upon “infrastructure” development as an indubitably desirable thing under all circumstances. Questions are scarcely asked about its worthwhileness when the government allocates larger resources for the “infrastructure” sector, or when it instructs public sector banks to give larger loans for “infrastructure” development. This way of looking at “infrastructure” however is grossly misleading. What is covered by the term “infrastructure” typically varies with…

The Growing Resistance against Globalization Prabhat Patnaik

All across the world, from the United States to Britain to Europe to China, a huge resistance is building up against globalization. True, this resistance is not self-consciously aimed against globalization per se; in different countries it focuses on different issues. But since each of these issues arises as a fall-out of globalization, not to see the interconnectedness of this resistance, as one that essentially and implicitly targets globalization, is to miss the wood for the trees. What is also remarkable is that this resistance, contrary to what one might expect from the fact that its source lies everywhere in…

Focus on Inequality Prabhat Patnaik

The World Bank and the IMF have started a new trend of late, of taking “progressive” positions in their publications even while insisting on the same old “conditionalities” in policy negotiations with particular countries. In accordance with this new trend these institutions have now got concerned with issues of poverty and inequality; and the World Bank has just brought out what is supposed to be the first of a series of annual publications tracking progress towards poverty removal and curtailment of inequality. This publication is called Poverty and Shared Prosperity. While I do not wish to review this publication here,…

Marxist Theory and the October Revolution Prabhat Patnaik

Marx’s theory when it was first presented had a far more profound impact on intellectual life in Russia than anywhere else. True, in Germany the entire working class movement, far stronger than elsewhere (the German Social Democrats used to bring out as many as 86 daily newspapers in that country on the eve of the first world war), was directly influenced by Marx, but this is quite different from influencing intellectual life in general. By Marx’s own admission one of the most perceptive reviews of Capital had appeared in Russia; and Lenin attests to the fact that in the Russia…

The Leninist Conjuncture Prabhat Patnaik

The basic theoretical presumption underlying the October Revolution was that because inter-imperialist rivalry had unleashed an epoch of wars that forced workers of different imperialist countries to kill each other across the trenches, capitalism had reached a climacteric. It had become historically “moribund”, ushering in an era of social revolutions, which would not just be confined to the advanced capitalist countries but would also encompass the oppressed countries whose peoples too got dragged into these wars as “canon-fodder”. What could hold back such revolutions was vacillation on the part of some sections of the working class deriving from the pusillanimity…