The protests in Punjab are happening at a time when the agrarian economy is under stress. With increasing uncertainty, previously antagonistic groups across classes, castes & gender are coming closer, building a broader base for the agitation & beyond.
Punjab’s farmers have been unrelenting in their opposition to the new farm laws passed in September. Their sustained and creative opposition continues to make headlines. The central government too remains adamant and increasingly belligerent about sustaining the laws in their current form. The political pressure of the farmers has led the Punjab government, in a symbolic gesture, to pass legislation rejecting the centre’s farm laws. The past weeks have witnessed bitter stand-offs: farmers blocking rail tracks, the railways suspending services to Punjab for a period, and the state’s power plants starved of coal. A march of thousands of farmers to Delhi earlier this week to register their opposition to these laws is faced police barricades, water cannons, and tear gas shells.
In the face of the unpopularity of the farm laws, the central government has found refuge in different kinds of arguments in favour of the reforms. It has sought to discredit the protests by arguing that the agitation is driven by exploitative middlemen, and that small and marginal farmers are happy with these laws. The opposition to the new laws is portrayed as coming from large, prosperous, and politically powerful farmers, who dominate Punjab’s farmers unions and who benefited the most from the old system.
With modern money theory (MMT) receiving impressive attention, the implications this theory has for developing countries have also been discussed more intensely. Emphasizing both its strengths and gaps provides a great chance to further develop macroeconomic strategies for poverty reduction and environmental sustainability.
In brief, the theory starts from the statement that money is issued by the government and brought into circulation via its expenditures. The government does not rely on taxes to fund expenditures when it is itself the source of money. Therefore, money can be created upon demand, is not limited, and can be used by the government to finance all expenditures it considers necessary to achieve policy goals such as full employment or a Green New Deal. The reason why agents in the economy accepts this money only consisting of numbers without any intrinsic value is the obligation to pay taxes. Since the state has the power to impose taxes, individuals need to get hold of money as this is the only way to meet their obligations; this is how the currency is accepted as a means of payments. The government thus has the power to run unlimited deficits because the fact that money is needed to pay taxes guarantees its acceptance even if those taxes do not cover expenditures. In fact, the government should run deficits because it creates the demand required for full employment while a balanced budget constrains it. The government cannot go bankrupt because there is no lack of currency it issues itself. The conditions identified by MMT for the system to work are the following: 1) the country must be sovereign of its own currency and 2) inflation needs to be kept under control. Once the latter starts accelerating due to increased nominal demand stemming from government expenditures, taxes can be increased in order to withdraw money from circulation. However, as long as full employment is not achieved, prices are argued to remain stable.
India was a pioneering country when it first introduced a Gender Budget in 2001 as part of its annual Financial Year Budget. Gender Budgeting (GB) highlights the inherently different experiences in receiving financial and welfare support from the state due to their differing needs, priorities and access and serves to ameliorate the barriers to economic inclusion faced by women through a plethora of state financing.
India’s Gender Budget Statement (GBS) has been released in two parts since 2005. Each ministry highlights allocations that are – women specific allocations where 100% of the budget for a specific scheme is assigned to women and a ‘pro-women’s’ allocation, where at least 30% of the budget for a specific scheme has been assigned to women to enhance affirmative action.
Figure 1: Proportion of women’s allocation in India’s Gender Budget
In a recent paper co-authored with László Bruszt and published in a Special Issue of Review of International Political Economy, we identify a developmental state in the least likely of times – the period of hegemonic neoliberalism in the 1990s and early 2000s – and the least likely of places, namely the post-socialist Central Eastern European (CEE) economies conventionally described as FDI-dependent Dependent Market Economies (DMEs).
When looking at the way contemporary global value chains/global production networks (GVCs/GPNs) and the articulations of globalised capital have been studied, it is clearly visible that the hegemonic power of Multinational Corporations (MNCs) has monopolised the empirical and theoretical analysis. Indeed, their ability to maintain control over the technological, financial and commercial flows through private-led governance has impacted most of the industrial development and underdevelopment of the Global South. Such footloose private operations have often caused undesired consequences such as eroded environmental standards, low wages and scrapped social protection rights. Governments have joined in a race to the bottom on fiscal and labour deregulations in order to attract foreign direct investment in exchange for low and semi-skilled jobs, resulting in very low fiscal revenue, low productivity, balance of payment imbalances and poor social outcomes.
The underpinning theory was that countries should follow their comparative advantages and let the market determine prices of labour (costs) and goods in order to be competitive in the world market and maximise returns. Yet, such losing game has been criticised since the start by heterodox development economists who widely denounced how theories and policies of development forgot the role of the state in history and in the present. In other words, public institutions have always played a key role not only in the quantitative making of capitalist accumulation, but also in its qualitative distributional and developmental outcomes.
Building upon the heritage of such scholarship, and in view of multiple and overwhelming ‘market failures’ in the global South and beyond, a new wave of Marxist-institutionalist inter-disciplinary literature spanning from Geography to International Economics and Finance has been trying to untangle the potential synergies between the public and the private domains by connecting the GVCs/GPNs and Developmental State approach.
In this debate, it has been emphasised that the state should be seen as a facilitator (i.e. assisting firms in smoothing market transactions); a regulator (combined with distributor to mitigate inequality and negative market externalities); a buyer (i.e. public procurement); a producer (i.e. state-owned enterprises) and a financer as a result of state-capital reconfigurations through sovereign wealth funds and development banks. Therefore, such functions should be foregrounded in analyses of development, because they are key to understanding developmental sources and processes within GVCs.Read More »
As the COVID-19 health crisis deepens, it looks increasingly clear that the short-term collapse in global output is likely to exceed that of any recession in the last 150 years – that is, in the entire history of capitalism. The ILO estimates that the crisis will lead to the destruction of 195 million jobs.Hence, after discussing at length the epidemiology of the COVID-19 pandemic, media attention is now increasingly focused on how to restart the global economic engine. We may still be mourning our dead, but time seems to have come to discuss how we guarantee economic survival that, under capitalism, is based on production and work. Here in the UK, from where I am writing this piece, getting ‘Britain back to work’ is becoming the new mantra for the government, even if its own leader is still recovering from the virus. Similar concerns are debated across the world, as the pandemic has by now clearly turned from a planetary healththreat intoa planetary economicthreat. Yet, getting the world ‘back to work’ ain’t no easy endeavour, whilst maintaining social distancing. Global capitalism is based on social interactions. In fact, its global phase has aimed at erasing social distancing, not just between working people but also between countries, markets, commodities and consumers. But at present, the way in which we are used to regenerate life under capitalism would literally kill us, and this is no small print in explaining the impasse of the COVID-19 crisis. It should be the starting point to analyse it. Ultimately, before turning into a crisis of production, the current pandemic has created a systemic crisis of social reproduction. As argued by Tithi Bhattacharya, the pandemic has shown the centrality of life-making activities for the working of capitalism. Moreover, it has also shown the value of care, as well as the stark ‘care inequalities’ experienced by different communities and individuals across the globe. By all means, this is a reproductive crisis like no other before. Read More »
From a prison cell in 1930, Antonio Gramsci wrote “The crisis consists precisely in the fact that the old world is dying and the new cannot yet be born; in the interregnum a great variety of morbid symptoms appear.” The political economic and biological relevance of Gramsci’s words and the conditions under which they were written extend well beyond historical parallel and literary metaphor. A crisis has metastasized from the micro-biological to the political economic. Now, neoliberalism is dying. In the interregnum, a great variety of morbid symptoms have appeared: social distancing, crisis policing, death camps, and pandemic labor. Of what disease are these symptoms? Not coronavirus. Carceral capitalism. Read More »
Most economists are greatly underestimating the economic challenges posed by the Covid19 pandemic. Without a correct understanding of those challenges, the aggressive monetary and fiscal measures many government are now pursuing will fall well short of their goals. They will go down in history as economic Marginot Lines—scaled up versions of tools designed to fight past crises.
The pandemic poses new and unique economic challenges. It compromises our ability to engage in productive and commercial activities requiring close contact between groups of people—that includes most of the things sustaining a modern economy. Epidemiologists tell us this is needed for several months. Responding in a way that minimises the loss of life and safeguards our long-term productive capacities requires two things: Temporarily shutting down large swaths of the economy, and focusing society’s productive resources on the kinds of work needed to fight the pandemic.
Most economists have not yet understood this partly because the scale and scope of what is needed pushes beyond the boundaries conventional economic thinking, and beyond what they generally consider to be legitimate “economic questions”.
The pandemic requires an unprecedented mobilisation of what feminist economists call care labour: work to care for ourselves, our families, and our communities. Over the next few weeks or months most people need to be focused on a vital job: caring for our collective health and helping save thousands or even millions of lives by staying at home. Many families will have to do this while simultaneously caring for millions of children now out of school, for other loved ones who cannot fully care for themselves, and for those who fall ill but do not require hospitalisation.
We need to allocate resources to enable people to perform this work.Read More »