Prof. Jayati Ghosh on employment crisis and the problem of lack of effective demand in India

Jayati Ghosh speaks on the employment crisis, which is essentially the result of inadequate demand in India. Labour-displacing technological change is a problem not in itself but because it occurs in a neoliberal economic context, in which public spending on employment-intensive activities is constrained. She proposes massive expansion in public employment (in  education, health, sanitation, care srvices including for the young and the elderly, community services etc.) and the need to support micro and small enterprises through credit, input and marketing assistance, basic infrastructurer and amenities like power and water supply etc. She argues financing these activities is a matter…

“Wageless growth” not “Jobless growth” the new conundrum C. P. Chandrasekhar

The so-called ‘synchronised recovery’ that global policy makers periodically refer to, seems to have bypassed much of the world’s working people. According to the just released Global Wage Report 2018/19 of the International Labour Organisation (ILO), the rate of growth of average monthly earnings adjusted for inflation of workers across 136 countries registered in 2017 its lowest growth since crisis year 2008, and was well below figures recorded in the pre-crisis years 2006 and 2007. What is more, if China, where wage growth has been rapid and whose workforce size substantially influences the weighted average global figure, is excluded, the…

Capitalism’s Discourse on “Development” Prabhat Patnaik

Capitalism’s discourse on “development” which has become quite influential all over the third world in the neo-liberal period proceeds as follows: (i) “development” must consist in shifting the work-force from the traditional (petty production) sector which is overcrowded with low labour productivity, and hence constitutes a repository of poverty,  to the modern (capitalist) sector which has much higher labour productivity. (ii) For this shift to occur, the modern (capitalist sector) must be allowed to grow as rapidly as possible, for which all impediments to capital accumulation must be removed. (iii) Even if, in the process of the modern (capitalist) sector’s…

The So-called “Consumers’ Interest” Prabhat Patnaik

In the wake of the take-over of Flipkart by Walmart, one is once again hearing an argument which one has often come across before, namely that having a large multinational in this sphere, which can do global sourcing for its products, will make goods cheaper for buyers and therefore be in the “consumers’ interests”. This argument is so old that it even goes back to the colonial times, when it was argued by many that imports from Britain, which had caused domestic deindustrialization by outcompeting the local craftsmen, had cheapened goods for the consumers and were therefore in the “consumers’…

The True Face of the Global Recovery C. P. Chandrasekhar and Jayati Ghosh

The global economy, the soothsayers would have it, is riding the back of a recovery. Growth is seen as having consolidated in the US, picked up remarkably in Europe, and returned, after a minor blip, in China and India. Encouraged by these signs, the IMF in January estimated global growth in 2017 at 3.7 per cent, which was marginally above previous projections, and forecast growth at 3.8 per cent in 2018 and 2019. A key driver here is the effect that the Trump administration’s tax cuts and promise of increases in infrastructure spending are expected to have on demand and…

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…

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…

Engineering a New Crisis to resolve an Old One C.P. Chandasekhar

News that the US economy grew at 3 per cent during the hurricane-blighted third quarter of 2017, close to the 3.1 per cent recorded in the previous quarter, has once more revived claims that the world economy has left the Great Recession behind. There is one reason to discount this claim. Back to back 3 per cent annualized rates of growth in consecutive quarters has been observed more than once since the 2008 crisis. In fact, as recently as the second and third quarters of 2014, rates of GDP growth in the US stood at 4.6 and 5.2 per cent…

Once More on “The Humbug of Finance” Prabhat Patnaik

The renowned economist Joan Robinson had referred to the view that the government’s budget should always be balanced, as the “humbug of finance” (Robinson 1962), namely as a false proposition with no theoretical merit which was nonetheless promoted by finance capital. These days of course the insistence is not exactly on balancing the budget as was the case during the pre-second world war years. A certain amount of fiscal deficit relative to GDP, usually 3 percent, is considered “permissible”, though it is not clear what is so sacrosanct about the figure 3 and why 3 is better than zero. But…

A Universal Basic Income in India? Jayati Ghosh

There is a lot of buzz globally around the idea of a Universal Basic Income (or UBI). It is perceived as one way of coping with technology-induced unemployment that is projected to grow significantly in the near future, as well as reducing inequalities and increasing consumption demand in stagnant economies. Certainly there is much to be said for the idea, especially if it is to be achieved by taxing the rich and particularly those activities that are either socially less desirable or are generating larger surpluses because of technological changes. Indeed, that is precisely the proposal of the French Socialist…