Economist and social scientist Prabhat Patnaik has called for workers’ initiatives to protect mankind from the clutches of globalised finance by overthrowing neo-liberal capitalism and to move towards a socialist society.
He was speaking on ‘Age of Finance Capital’ at the annual EMS Smriti programme here on Tuesday organised with the theme ‘UN Declaration of New International Economic Order-1974, a revisit’.
“The finance capital today is globalised. It is not confined to any economic territory of nations. It is spread all over the world in search of investment and speculation opportunities,” said Mr. Patnaik.
The states have no other option than accepting globalised finance. If they pursue a set of policies different from the interest of the finance, it will go somewhere else. So countries are forced to implement policies according to their interest, he said.
In India, whether it is the UPA or the NDA government, the policies are almost similar. The state becomes subservient to the global finance. For example, in the country, there was support for petty production in the pre-neo-liberal times. Now, the insulation for the cash crops has been dropped. The Narendra Modi government attempted to withdraw the support for the production of foodgrains. Though it backtracked due to resistance of the farmers, the agenda remains, he said.
All the decisions by the Centre made in recent times, including demonetisation, GST and withdrawal of insulation of peasant agriculture from world price fluctuations were in tune with the interests of global finance capital, said Mr. Patnaik.
This created crisis for peasants. Profitability reduced as there has been no protection from fluctuations in the world market. There are large number of suicides now compared to the pre-neo-liberal period. There has been exodus to the cities from rural areas in search of jobs. There has been a sharp decline in the number of cultivators, he pointed out.
“The age of global finance saw relatively unrestricted flow of finance, commodities and goods across the borders. If you have an unrestricted movement of goods and services, you have to introduce labour productivity-increasing technologies to compete with other countries. However, the growth of labour productivity adversely impacted employment,” he said.
This weakened the bargaining power of unions. Privatisation of the public sector added to the issue. While 33% of the workforce in the public sector is unionised, only 7% of the private sector has unions. Under the globalised finance, the workers’ wages saw a decline and stagnation even when productivity increased, he said.
The modern age of finance capital is not only associated with the subservience of the states into finance capital, which has a serious impact on democracy, but also substituted the sovereignty of people, added Mr. Patnaik.
CPI(M) Polit Bureau member M.A. Baby, who inaugurated the session, said EMS Namboodirpad’s teachings are valid at a time when the State governments are being squeezed of power and funding by the Centre.
Former Finance Minister T.M. Thomas Isaac spoke about the challenges faced by dollar supremacy
