ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Economic Liberalisation and the Working Poor

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.

Economic liberalisation is often seen either as just a set of administrative measures for “rationalising” the economic regime (older government economists tend to see it this way), or as a move towards “Walrasian equilibrium,” where demand and supply are equal at ruling prices in all markets and where the allocation of resources is “optimal” (some academic economists tend to see it this way). These are obviously flawed perceptions. Economic liberalisation entails the introduction of an altogether new economic regime which has nothing to do with any Walrasian equilibrium, in the place of the old dirigiste regime that had more or less been in place since the 1950s, with a different political economy, a different class basis, and a different dynamics.

State and Economic Liberalisation

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