https://vimeo.com/445885577 Prabhat Patnaik, professor emeritus at Jawaharlal Nehru University, New Delhi, reflects on the COVID-19 shock that has worsened the crisis triggered by globalized finance. Only two possibilities emerge: restructure capitalism by controlling finance, or let the tendencies towards very coercive forms of fascism grow. Lynn Fries / GPEnewsdocs.com TRANSCRIPT LYNN FRIES: Hello and welcome. I’m Lynn Fries, producer of Global Political Economy or GPEnewsdocs. This is a report on a conversation with Prabhat Patnaik on why capitalism is going to be finding it very difficult to come to terms with a post COVID-19 world. Prabhat Patnaik is professor emeritus of economics at Jawaharlal Nehru University in New Delhi. An eminent and prolific economist, Patnaik’s published work includes books like The Value of Money and Accumulation and Stability Under Capitalism. In a forthcoming book titled, Capital and Imperialism, to be released in February, co-authors Prabhat Patnaik & Utsa Patnaik will publish their comprehensive survey of capitalism’s colonialist roots and uncertain future. We go now to our conversation with Professor Prabhat Patnaik. Prabhat, What I want to get at in this conversation is why the working population is being pushed into acute distress, unemployment and insecurity. You’ve long argued that capitalism throughout the era of globalization under neoliberalism has been characterized by a conflict between the interests of finance and working people. And with COVID-19 this is intensifying. So we’re going to talk about that and let’s start with one of the main pillars of neoliberal policy – the withdrawal of the state from demand management. PRABHAT PATNAIK: Yes, I mean, I think the main aspect of the current neoliberal policy is the globalization of finance. Under the Bretton Woods System countries imposed capital controls. In fact, European countries had very strict capital controls. Capital could not come in and go out as it wished. And therefore this capital control included also financial controls. Now, one thing which has happened which I think is the crux of the current neoliberal globalization is the removal of capital controls and therefore the freedom of finance to move around globally. Now, if finance moves around globally but we have Nation States; in that case, the Nation States lose their autonomy. They have to do what finance wants them to do because otherwise finance would in fact flow out of the country causing a bankruptcy of that particular country. Therefore they have to be very careful that they do nothing to offend finance. Now, for any state intervention in raising demand, it is important that state expenditure be financed either through a fiscal deficit or by taxing the rich or taxing capital. Either of these are disliked by finance. And therefore, in a world in which finance has the upper hand the state simply lacks the instruments through which it can actually intervene in raising the level of aggregate demand. And that is exactly what has happened. Namely that fiscal policy for raising aggregate demand is out. The only thing the state is allowed to use is monetary policy but monetary policy is an extremely blunt instrument that predictably has not been very effective. Which is why the capitalist countries have been caught in a protracted crisis starting from 2008 itself. FRIES: You basically say that to view the neoliberal State as withdrawing in favor of the market is misleading. That the State is acting in accordance with the demands of international finance capital and the domestic corporate finan...
No transcript available.
POWERED BY BLUBRRY
