Neo-liberalism has been a Disaster for Nepal An Interview with Prof. C.P. Chandrasekhar

Why is neoliberalism bad for India and Nepal? What are its major flaws? Mahabir Paudyal and Prashant Lamichhane from myRepublica caught up with Professor C.P. Chandrasekhar when he was in Kathmandu last week to discuss the impact of neo-liberal economic order in the two countries, and the prospects of a socialist-oriented economy in Nepal. Nepal and India adopted liberalization almost at the same time during the 1990s. Thirty years on, what kind of impact has it had in the two countries? You need to look at liberalization at two levels. Cross-country liberalization, which is a set or package of policies implemented…

Twenty Years after The Asian Financial Crisis Prabhat Patnaik

Exactly twenty years ago, a major financial crisis had hit the countries of East and South East Asia in July 1997. This crisis was a watershed in the history of third world development, in the sense that these “tiger economies” which had seen extraordinarily high growth rates until that time, remained permanently crippled thereafter. Just around the time that they were shaking off the effects of the 1997 crisis on their respective economies, the collapse of the “housing bubble” in the United States plunged the entire world capitalist system into a crisis which also affected them, so that they could…

The Roots of the Agrarian Distress in India C.P. Chandrasekhar

The policy shifts of the reform era have not been in favor of agriculture. Trade liberalisation, deregulation and a greater role for market forces have not benefited the farmer, who is trapped in a persisting crisis. It is time for today’s policy makers to recognise their own disconnect, and learn from the evidence at hand. Agrarian_Distress (Download the full text in PDF format) (This article was originally published in the bloombergquint on June 27, 2017)

The Post-1991 Growth Story C. P. Chandrasekhar

July 1991 is widely seen as a watershed month in Indian economic policy making. That was when the Indian government openly declared that it was unwinding the interventionist regime which had been in place since Independence, involving controls on economic agents, regulation of markets, a large public sector and an a priori plan as to how economic resources should be allocated. In the period to follow, policy, it was then argued, would dismantle this excessively interventionist framework, and establish and support a system driven by private initiative and relatively unfettered markets, with minimal regulation and control. The State was to…

Capital and Public Expenditure Prabhat Patnaik

There is a paradox at the heart of political economy, which can be seen as follows. Suppose a capitalist economy is saddled with substantial unemployment and unutilized productive capacity, as is the case now over the entire capitalist world. Suppose in this situation the State increases its expenditure by enlarging its fiscal deficit, i.e. it spends, let us say, Rs.100 more without any increase in its tax revenue. And let us assume for simplicity that the capitalist economy is a closed, isolated one. Then the Rs.100 of expenditure will directly and indirectly, i.e. via the various rounds of further expenditure…

From Liberalization to Investment and Jobs: Lost in tsssranslation Yilmaz Akyüz

This paper discusses the experience of late industrializers in harnessing profits through industrial-cum-investment policies for faster accumulation. It is found that the performance of a large number of developing countries which have adopted a strategy of reigniting a dynamic process of capital accumulation and growth through a combination of rapid liberalization, increased reliance on foreign capital and reduced public investment and policy intervention is highly disappointing. The paper also examines the impact of macroeconomic and financial policies on accumulation, employment and growth, and concludes with a discussion of policy priorities. lost_translation (Download the full text in PDF format)

The Diffusion of Development Prabhat Patnaik

In this article, the author discusses the Baran hypothesis that there cannot be a spontaneous diffusion of industrial development from the developed world to the countries of the third world under capitalism: a hypothesis apparently contradicted by the current pattern of development visible at least in Asia. His analysis resolves this contradiction by using an inherent but less talked about ‘contradictions to capitalism’ which is the role of a stable medium of wealth or in the present context, a leading currency. He explains why the current pattern of growth and technology diffusion in the newly industrialising countries cannot be sustained…

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