Articles by Prabhat Patnaik

The monetary policy of a neo-liberal state can only ease the availability of finance for the capitalists by deliberately inducing economic agents to underestimate risk. A continuous easing of the capitalists’ budget constraint in this manner makes the financial system fragile, such that economic booms are merely bubbles, while financial crashes, when they occur, are more devastating than ever.

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While an expansionary monetary policy acts by respecting private rationality, an expansionary fiscal policy, involving larger government expenditure financed by a fiscal deficit or taxes on capitalists, implicitly highlights the limitations of private rationality. Finance capital not surprisingly opposes the latter, even though the proffered arguments for “fiscal responsibility” have no theoretical validity. Given the current world economic crisis, a spate of beggar-my-neighbour policies are on the horizon. 

Economic liberalisation is usually taken to mean a general "retreat of the state." This is erroneous. The state in a "liberalised regime" acts almost exclusively in the interests of globalised capital and the domestic corporate-financial oligarchy that gets integrated with it, which means inter alia a withdrawal of state support from traditional petty production, including peasant agriculture. This is what underlies the phenomenon of absolute impoverishment of the working people, notably in the form of growing nutritional deprivation, which "liberalisation" has unleashed in India over the last 25 years, and which, notwithstanding assiduous denials by its votaries, is quite indubitable.

A tribute to the economist, Ajit Singh, who taught at the University of Cambridge and recently at Panjab University.