ECONOMIC NOTES

Brexit: A Revolt against the Hegemony of Globalised Finance

ALMOST all commentators on the British electorate’s vote to leave the European Union, whether from the Right or the Left, have missed the main point of it, namely that it is a massive revolt against the hegemony of globalised finance. Indeed, the fact that they have missed this point is itself indicative of the ubiquity of this hegemony among the literati, from which the British electorate, interestingly, appears substantially to have freed itself.

Rajan’s Exit

AN absurd debate has been going on for some time in India. On the one side are those who blame Raghuram Rajan, the governor of the Reserve Bank who has just decided not to seek an extension of his term, for keeping interest rates high and thereby pushing the economy into stagnation (and they embellish their argument by invoking images of the sufferings of the unemployed); on the other side are those who applaud his courage for keeping interest rates high and thereby keeping at bay the scourge of inflation in the country.

 

ABSURD

The Goods and Services Tax

FOR pushing through the Goods and Services Tax (GST), the NDA government is resorting to an enormous amount of untruth. The most blatant of these is the utterly bogus claim that the GST would increase India’s GDP growth rate by 2 percent per year. If the GST had such a miraculous effect, then the world capitalist crisis would have vanished long ago, since the US, which does not have a GST, would simply have moved to a GST regime, adding to its GDP growth rate and that of the world economy as a whole.

Modi’s Two Years

NEO-LIBERALISM is usually portrayed in terms of a “State versus Market” dichotomy, as entailing greater recourse to the market in lieu of State regulation, and hence constituting a “retreat of the State”.

A Right-Wing Coup in Brazil

NOAM Chomsky has called it a “soft coup”, presumably because no guns or tanks have been involved as yet; but the forced resignation of Dilma Rousseff, the democratically elected  president of Brazil belonging to the Left-wing Workers’ Party, and her replacement by a Right-wing politician Michel Temer, who has lost no time in constituting an all white and all male conservative cabinet, is nothing short of a coup.

World Poverty

THE International Labour Organisation (ILO) brings out every year a publication called World Employment and Social Outlook. The current year’s report, released on May 18, is sub-titled “Transforming Jobs to End Poverty”. It provides estimates of the level of world poverty and of the amount of income transfers to the poor required for ending world poverty.

India’s Industrial Stagnation

THE index of industrial production for 2015-16 which has recently been released shows that the growth rate of the industrial sector for the financial year (over the previous year) comes to a meagre 2.4 percent. This virtual stagnation in industrial output is not just some sporadic occurrence. In fact the industrial growth rates for the last four financial years have been as follows:

 

2012-13: 1.1 percent

2013-14: -0.1 percent

2014-15: 2.8 percent

The Perversity of Market Signals

IF we leave aside the problem of deficiency of aggregate demand, ie, of generalised over-production, then the only demand-supply mismatch that can arise in an economy is when too much of some commodity is produced relative to demand, and correspondingly too little of some other commodity is produced relative to demand. When such a mismatch arises, the market gives a clear signal about it through the actual level of inventories of commodities being either too much or too little relative to the “normal” level.

The Panama Papers

EDWARD Snowden, the NSA whistleblower from the United States, has called it the “biggest leak in the history of data journalism” ever to have occurred in the world. Mossack Fonseca, a law firm based in Panama, had made it its business to arrange investments by the rich and the wealthy all over the globe in several off-shore companies in a clandestine manner, which, it had promised its clients, could never be breached.

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