The Grim Unemployment Scenario

THE data on unemployment brough out by the Centre for Monitoring the Indian Economy (CMIE) present a grim picture. Not only has the unemployment rate increased sharply for some years now, starting from even before the pandemic, but the figure which had shot up during the pandemic has not come down much despite the recovery that has occurred in the level of GDP from its trough.The unemployment rate which was 4.7 per cent in 2017-18, rose to 6.3 per cent in 2018-19. It shot up during the lockdown associated with the pandemic: in December 2020 for instance, it was 9.1 per cent.

Threats to the Hegemony of the Dollar

JANET Yellen, the US treasury secretary, has finally acknowledged what has been obvious to most people for quite some time, namely that the imposition of sanctions against countries that the US is hostile to, runs the risk of jeopardising the hegemony of the dollar as the world’s reserve currency. If the sanctions were imposed on just one or two countries, then matters would be different; but sanctions these days are used by the US to target dozens of countries, and, when this happens, those countries tend to get together to form alternative arrangements for bypassing such sanctions.

The Current State of India’s Economy

GOVERNMENT officials never tire of repeating that India is currently the fastest growing major economy in the world.

OPEC+ and Capitalism’s Fight against Inflation

Except in war-time, capitalism invariably seeks to control inflation by creating a recession; and this is so even when the inflation has been caused by an autonomous increase in capitalists’ profit-margins which are downward inflexible and hence would not be reduced by a recession. This strategy is pursued because a recession invariably lowers the demand for primary commodities and hence their prices; this serves to lower inflation.

The Rubber Farmers’ Woes

RUBBER prices, which had recovered a little after the fall during the pandemic, have collapsed again, with the farmers in Kerala, which grows 80 per cent of the country’s rubber crop, being badly hit.

A Common Misconception about Capitalism

THERE is a commonly-held view that while capitalism in its early stages brings about unemployment and hence an accentuation of poverty, this initial damage is subsequently reversed as it keeps growing.

The Collapse of US Banks

THERE is nothing mysterious about the reasons for the collapse of the Silicon Valley Bank and the Signature Bank in the United States. There is also nothing mysterious about why the entire banking system of the capitalist world has come under a cloud: once some part of the system collapses, the other parts of it get saddled with “toxic” assets, which are nothing else but the liabilities of the collapsed part of the system, and hence become subject to a “domino effect”. The real issue is: how did US capitalism get into a situation where its banking system came under such severe strain?

The “Hindu Rate of Growth”: Then and Now

FOR a large part of the dirigiste period, the gross domestic product of the Indian economy grew at a rate of around 4 per cent per annum or less, which, though an improvement compared to the colonial era that had witnessed virtual stagnation, was not very impressive. This low steady growth over a prolonged period of time was facetiously referred to as the “Hindu rate of growth” by many economists (perhaps because with this rate an eternity would be required for any noticeable social transformation).

Imperialism and Natural Resources

THERE is an overwhelming asymmetry between the level of “development” and the possession of natural resources among countries of the world. Take the group of most advanced countries, the G-7 comprising the US, the UK, Germany, France, Italy, Japan and Canada. This group, while accounting for only 10 per cent of the world’s population, possessed over half of global net wealth as of 2020, and roughly two-fifths of the gross domestic product of the world (I have taken for convenience the mid-point of a range of estimates that lie between 32 and 46 per cent).

Treating Infrastructure as a Holy Cow

THERE is an impression shared by even progressive intellectuals that the entity that goes by the name of “physical infrastructure” is an absolute necessity in each country, and that the actual amount of infrastructure that exists is always less than what is needed. There is in other words no such thing as “too much investment” being made in infrastructure.Because of this no objections are usually raised to the magnitude of resources that are devoted towards building such infrastructure.

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Peoples Democracy

ECONOMIC NOTES