ECONOMIC NOTES

Why Didn’t Socialism Have Over-Production Crises?

SOCIALISM has collapsed over large tracts of the globe. Where it still exists, the economic regimes have undergone considerable reforms. Not surprisingly therefore the old socialist regimes are objects of much vilification these days. While capitalism, understandably, has a vested interest in promoting such vilification, the Left opponents of capitalism continue to remain too shell-shocked to counter it.

George Soros on the Current Conjuncture

BILLIONAIRE financier George Soros has set financial markets aflutter by suggesting that a new world financial crisis is in the offing. In a speech he gave recently to a think-tank, he underscored the outflow of finance capital from the third world which is likely to catch these economies in a cycle of exchange rate depreciations and austerity. And he talked specifically of the European Union facing an “existential crisis” on account of three factors: its territorial disintegration as exemplified by Brexit, austerity, and the refugee crisis.

Trump versus the Rest

DONALD Trump’s leaving the G-7 summit without budging an iota on protectionism is indicative of the disunity among the leading capitalist countries on the strategy to overcome the capitalist crisis. Trump has decided that the US would go its own way, by enlarging the fiscal deficit, not just for giving tax concessions to the corporates, which would have little demand-stimulating effect anyway, but also for increasing government expenditure which would have this effect, and at the same time by protecting the domestic market.

The Push for Privatising Banks

FROM the very beginning, there has always been a demand for undoing bank nationalisation in India. This demand naturally gathered momentum with the adoption of neo-liberal policies. It was completely unacceptable to international finance capital that the bulk of the banking sector in a country like India should remain under public ownership.

The Prospect of Food Shortage

ORTHODOX economics has for long been haunted by the prospect that the growth in foodgrains output in the world economy would not be sufficiently high to sustain the growing population of the world. Malthus was an early exponent of this fear. Keynes too subscribed to the view that unless the poor countries somehow ensured that their population growth was controlled, there would be a food shortage in the world economy, of which growing poverty would be a symptom.

Commoditisation and the Public Sphere

CENTRAL to liberalism is a distinction between two spheres, the sphere of the market (or more generally of the economy) where individuals and firms interact to exchange their wares; and the sphere of public discourse where individuals interact as citizens of a polity to debate and determine the actions of the State. The importance that liberals attach to this second sphere was underscored by Walter Bagehot, the nineteenth century British essayist of liberal persuasion, who had lauded democracy as “government by discussion”.

Trump’s Protectionism

ON March 8, Donald Trump made an announcement which according to many has the potential of starting a global trade war. He announced that the US would be raising tariffs on imported steel by 25 per cent and tariffs on imported aluminium by 10 per cent.

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