Neo-Liberal Capitalism and its Crisis Prabhat Patnaik

“Neo-liberal capitalism” is the term used to describe the phase of capitalism where restrictions on the global flows of commodities and capital, including capital in the form of finance, have been substantially removed. Since such removal happens under pressure from globally-mobile (or international) finance capital, neo-liberal capitalism is characterized by the hegemony of international finance capital, with which the big capitals in particular countries get integrated, and which ensures that a common set of “neo-liberal” policies are pursued by all countries across the globe. The emergence of such international finance capital is itself the outcome of the process of centralization…

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…

The TPP and U.S.Politics Prabhat Patnaik

A peculiar charade is being played out during the current U.S. election campaign. The Trans-Pacific Partnership (TPP) which is an economic agreement between the U.S. and several Asian countries has been under negotiation for almost eight years now. For four of these eight years Hilary Clinton was the Secretary of State and hence directly supervising these negotiations; and even after she quit that job she has remained a prominent figure around the Obama administration, even if not part of it. And yet both the presidential candidates, not just Donald Trump but even Hilary Clinton, have disowned the TPP during their…

“De-Linking” and Domestic Reaction Prabhat Patnaik

There is a strong view in certain Left circles, especially in certain European Left circles, that any de-linking from global capitalism conduces to a promotion of domestic reaction. Of course, even in Europe this is not necessarily the dominant view on the Left; for instance, the Communists and other segments of the Greek Left, which favour Greece’s quitting the Eurozone instead of accepting the “austerity” measures imposed by the so-called “troika” of creditors, do not obviously take this postulated connection, between de-linking from a supra-national institution of capital and domestic reaction, seriously; but it is a significant view. And in…

On Some Common Macroeconomic Fallacies Prabhat Patnaik

Fallacy 1: The interest rate in the Economy is High because the Fiscal Deficit is high The interest rate is the return on a particular asset, namely a debt instrument. It must be determined therefore as part of a stock equilibrium. The fiscal deficit is a flow concept. To say that the interest rate is determined by the size of the fiscal deficit is tantamount to saying that the price of a stock is determined by a flow, which is plain illogical. But, it may be argued, while the fiscal deficit may not determine the interest rate, it certainly affects…