The Phenomenon of Negative Interest Rates

ONE is witnessing the emergence of a strange and unprecedented phenomenon in the advanced capitalist world, namely the charging of negative interest rates. The European Central Bank reduced its deposit rate to -0.1 percent in June 2014, and since then it has reduced this rate further, to-0.2 percent in September 2014, -0.3 percent in December 2015, and to -0.4 percent in March 2016. And apart from the ECB, four other national central banks, those of Switzerland, Japan, Denmark, and Sweden, have also reduced interest rates on certain parts of their deposits to negative levels.

The State of the Economy

THERE was a time when India had one of the finest statistical systems in the developing world. No matter how one interpreted the statistics that came out of that system, one could take the figures themselves as reasonably correct. This alas is no longer true. We now have GDP estimates which the Economic Survey of the union government itself considers unreliable. And some of the figures given in the latest Economic Survey are quite bizarre.

Why Do We Have Unemployment?

UNEMPLOYMENT has become so persistent a phenomenon in contemporary times that there is a common feeling that it is a “natural” state of affairs, that nothing can ever be done about it, and that the only way to have greater employment opportunities coming your way is either to oppose the system of job “reservations” for the deprived segments of the population altogether, or to demand that your own “caste” or “community” be included in the category of those eligible for such “reservations”.

Budget 2016-17: Hype Is All

THE union budget for the year 2016-17 presented to parliament by Finance Minister Arun Jaitley on February 29, has been termed “pro-poor” and “pro-farmer” by the media. Nothing else could be further from the truth. The total expenditure of the government in 2016-17 is supposed to increase by 10.6 percent over the revised estimates for 2015-16, compared to a GDP growth-rate of 11 percent, which means that the budget if anything is deflationary in overall terms even in the midst of a world economic crisis that was alluded to by Jaitley himself.

A Government at the End of Its Tether

THREE main factors explain why the effect of the world capitalist crisis that erupted in 2007-08 and is still continuing was not felt by the Indian economy for a long time. Each of these three countervailing factors, however, has now run its course, leaving the government with no means of coping with the ongoing crisis. On the contrary, whatever it can do now will only compound the crisis.

Commodities and Democracy

CAPITALISM is a “spontaneous” system, in the sense that it is a self-driven entity propelled by its own immanent tendencies. There is no human agency shaping its dynamics, and even the human beings who are at its helm, viz, the capitalists, do not act on their own volition but are coerced into acting in specific ways by the logic of the system itself, so much so that Marx had called the capitalist “capital personified”.

The Challenge before the Latin American Left

THE Left upsurge in Latin America appears to be abating. In October 2015 Jimmy Morales, the conservative candidate in Guatemala,  defeated the Left-leaning Sandra Torres in the presidential elections. On November 22, Mauricio Macri, the conservative presidential candidate in Argentina, defeated Daniel Scioli, his Peronist rival, by a narrow margin, to bring to an end a long period of Left ascendancy under Presidents Nestor Kirchner and his wife Cristina Fernandez de Kirchner.

For a Financial Transactions Tax

SENATOR Bernie Sanders who is a “socialist” by his own admission and is campaigning with some success for nomination as the Democratic Party’s presidential candidate in the coming elections in the United States, has come out with a proposal for a Financial Transactions Tax, whose proceeds are to be used for making college education free for all students in public institutions. Since the campaign this time within the Democratic Party is focusing on control over Wall Street, Sanders’ proposal which directly affects Wall Street acquires great significance.

The Abolition of the NDC

THE Narendra Modi government is winding up the National Development Council, an apex body consisting of the prime minister, the concerned central cabinet ministers, and all state chief ministers together with their concerned cabinet colleagues, which supervised the planning process in the country, gave final approval to the various five-year plans, and met periodically to take stock of issues and policy measures relating to economic development.