 Today I have with me Professor Prabhat Patnaik and those of you who are new to this channel would have read about him, heard about him. If you haven't done that, I would say that you've been uneducated. I'll tell you why because we are all used to listening to only mainstream neoliberal economists who tell us privatization is great, the public sector is terrible, subsidies are very bad, deficits are terrible. They must be kept under control, inflation is horrible, some of these are probably true, but the reason why neoliberal mainstream economists tell you that is very different and I want to explore that with Professor Patnaik and you'll have to excuse us because we have got this hot coffee here which we will be sipping every now and then. But Professor Patnaik let me start by asking you, one of the things that I think all of us when we study textbooks, economics textbooks, whether it's in school or whether in college or out of our hobby and actually because of the way in which the media tells us what the economy should be like, we think that actually everyone in our country can achieve riches if they want to. Everyone can become rich if they work hard and if we have all that the West has. But most of us somehow know that's not true. I want to ask you this question, what is India like? Who rules India? Who decides what the economic policies are going to be like and by who? I mean, what are the groups of people? Well, you know, I suppose at the present moment India is ruled by an alliance between the Hindutva forces led by Narendra Modi and the corporate elements led by Adani and Nambani. I mean, I would call it a sort of corporate Hindutva alliance which is as it were personified in a Modi-Adani alliance that actually rules India. But you see, obviously, when I say it rules India, it must have sufficient social support. I think the social support comes partly, of course, from ordinary people, many of whom either because of this false economics that is fed to them or because of being motivated communally because communalism is also fed to them, go along with it. But I think a segment which is very articulate and goes along with it is the middle class, particularly the well-to-do middle class. I think the well-to-do middle class has done quite well out of neoliberalism and its opportunities have expanded because of which it is really a votary of neoliberalism and the corporate Hindutva alliance is in fact an alliance which promotes neoliberalism. Therefore, it has substantial support from a segment of the middle class. Basically, the upper segment of the middle class. And when we say middle class, often we tend to believe that this is those who are not very rich but not our poor. But in Indian conditions, the middle class is more a concept. It's more a theoretical concept. Could you explain that a little? Yes. I mean, when I say middle class, I don't have in mind, let's say university professors or people in clerical jobs in the government and so on, the salariat. I mean, basically by middle class, we generally refer to the salariat. And I think the majority of the salariat would really belong to the lower middle class. They are not the people who are great votaries of this alliance I'm talking about. But the upper middle class, including if I may say so, people in the media. Yeah, absolutely. I agree. I think they are the ones. You know, executives in business houses and company executives and so on, people in the media, they are the people who actually are more or less supporting this alliance. Do you see that in some senses that there is almost a fear that the upper middle class or the rich, if I had to say in Indian context, have of anything that speaks of socialism, anything that speaks of equality. It's almost a fear. It's almost a sense that no, no, no, that's all been disproved. It's all wrong. Why are you bringing this up? Yes, absolutely. Absolutely. This middle class is really obsessed with the fear of socialism, any turn to the left in policymaking and so on. But there is also a reason for it. You see, this middle class has done well out of neoliberalism. Now, if you do well out of neoliberalism and the question most people have not done well, in fact, a large number of people are really worse off according to me. Certainly, if you look at nutritional data, they are worse off today than they were at the end of the 1980s. So if some people are better off, then naturally, question would be raised, why are they better off? So their self-perception is that they are better off because they are more talented. They're not going to say that they're better off because they come from better endowed families or anything of that kind. They're better off than the Dalits. They're better off than the laborer's child. They're better off than the kind of worker's child or peasant child because they are more talented. And therefore, there is a self-perception that goes along with it, which says that in capitalism, everybody has the opportunity to do well. Those who don't is because they're not sufficiently talented. So I would bring a slight, not disagreement, but I would say a little bit of an additional thing here. I think that the middle class that we are talking about, the executives, the professional classes, not owners of capital directly, these people have actually not done well in the last 10 years. I'll tell you why. Since the global financial crisis of 2008-09, if you look at salaries, they've not gone up if you compare it to inflation. It's more or less stuck there and very few, except for banks, people in banks and stuff like that. If you look at IT, if you look at media, for instance, these are absolutely stagnated. So I look around me, people my age, I'm now going to be 51, and I see that many people around my age, 10 years ago, who were really affluent and who thought that, okay, we are only going to get richer and richer, have seen a decline and that's the professional class, I'm saying. Despite that, despite that, their conviction about free market policies doesn't change. You know, I believe that there is, you're absolutely right about this stagnation or even decline, but that I think is because of crisis of neoliberalism. I think neoliberalism, which was doing very well, started getting into a crisis starting from the financial crisis that occurred. After the financial crisis, in large numbers of countries, certainly in Europe and even in India, over the last 10 years, things have been pretty bad, okay, for the economy as a whole, and I think the middle class is not insulated from it. If you look at the period before neoliberalism began and compare it to now, they are distinctly much better off. But it is absolutely true that in the last decade or so, particularly after 2012, 2013, they have actually experienced a stagnation decline in their living standards. Now, at some point, one hopes that that is what would induce segments of them to change their views, because after all, you know, I mean, it does happen that people from the dominant classes, particularly the youth and, you know, I mean, more intellectually inclined elements from those classes, then take on an oppositional role. And when that happens, that is the time for social change. Like when you were young. Yes, like when I was young. But the interesting thing is that, you know, that if you look at the anti-colonial struggle, a very large number of people involved in the anti-colonial struggle, I'm talking about the articulate leadership positions, you know, those who occupied such positions, they actually were landlord's children. Yes. And, you know, they actually joined political forces that were attacking landlordism. And so at some point, I think many of these are going to change. But when you were young, you were fighting the Congress, right? Yes, absolutely. For us, Congress was the enemy, betraying the promise of the anti-colonial struggle. My father was a communist, so I'm not very surprised. In fact, things like BJP, I come from Orissa, things like BJP never entered the picture. We used to hear of them something called Jansang in North India, of a Rajasthan and such like places. But they were a marginal phenomenon. Now, RSS was not, but the political element called Jansang. I think in the first parliament election, they probably got four seats or something like that. And I think for till the 1980s, Jansang had about six, seven percent at its peak. And that's what the BJP ended up with in the 1980 elections. The struggle we saw was between the Congress and the left. Congress and the left. But the reason I asked you this question is because I'm sure you had friends in college or in university who did not come from communist backgrounds. They came from... But they were turning left. Yes, yes. Oh, absolutely. But that kind of dissolved at one particular time in the 80s, probably has to do with the collapse of the Soviet Union also. How important in this context is public culture. And I'm asking you as an economist, how important is media in creating a consensus at that time? Was the media was public culture? Were public intellectuals in your time? More, I would say, with the people than it is today. Oh, absolutely. In fact, I think for a very long time, the middle class, including those who were executives and so on, they were part of this narrative of public sector, of some kind of a mixed economy standing up to the United States in foreign policy and so on. I think that was really... I mean, I think the economist Mikhail Kalitsky has this interesting idea of an intermediate regime in which he believes that really it was a regime dominated by the middle class. The Nehruvian regime was a regime that was dominated by the middle class, and the two main features of that regime were non-alignment and what he called state capitalism, which was basically... What you call diriges. Yeah, that's right, emphasis on the public sector. But you see, that was not just the culture in India, that was actually the culture all over the world. There was a Soviet Union on one side, but if you look at Europe, for instance, there was social democracy, pursuing Keynesian policies. And I think the Labour Party till the coming of Blair had the clause 5 or something, which said nationalisation is the... That's right, exactly. So nationalisation was of course an objective, but what is more, the idea of full employment, or as close to full employment as you can get, the idea of a welfare state, these were commonly accepted ideas, and if you did not believe in them, people would look at you as if you had dropped from another planet. I think it began to change. I believe the collapse of the Soviet Union was, if you like, the last straw. But it began in the late 70s, exactly. I think it began with the crisis of Keynesianism, the crisis of dirigism, which was there, let us say, in the late 70s. I know we're jumping around, but this is an atta. That's how it happened. So how important the collapse of Keynesianism, and if you could, before I go, I'm asking this question, but if you could spend two minutes just for our viewers to explain what Keynesianism is, and then take it up, the collapse of Keynesianism, how accidental was it? And I'm asking this, how important was the wars in the Middle East, the oil shock, and these, how important were they, and how inherent was this collapse likely to be, how that this was bound to happen at some point? Yes, I believe it was bound to happen. It was not just the oil shocks and so on. You see, fundamentally, Keynesianism believed that you could stabilize capitalism, and Keynes was anti-communist. Okay, he really wanted capitalism to continue, but on the other hand, precisely because he was anti-communist, his idea was that unless the flaws of capitalism are overcome, Communists, I want to take over. Therefore, it's very important that the flaws be overcome. And this, he thought, could be done through state intervention. This, and the biggest flaw was unemployment, so because he was writing during the Great Depression and so on. So he thought that state intervention could push capitalism towards full employment. And if that was the case, with the biggest flaw of capitalism overcome, there was no reason for anyone to turn to socialism. But the problem was that I believe that it was bound to fail because I think a capitalist system operating close to full employment is really an impossibility in the long run. You can have it for a certain period of time, but not eventually because typically it gets then to a situation of inflation. Inflation, that's right. Which is what happened. Which is exactly what happened. It ultimately also leads to a drop in profits, for the capitalist. If one looks at the share of profit, then till the 70s, one sees that actually the top 1% actually are at their bottom in the US or UK or even India. Yes. And then they start rising from 1980s. Absolutely. Because if you are moving towards a more egalitarian order, then of course the top 1% or 10% would be worse off than they were to start with. And to some extent they try to overcome it by jacking up prices because even inflation is because of that. But not fully because after all, you can jack up prices only to a certain extent, but not otherwise. And therefore you have a combination of a decline in profit margins and inflation. And on top of that came the all shocks. Yes. You see, what happened was that in the early 1970s, there was a whole lot of interrelated things. In the late 1960s, there was a worldwide wage explosion. Okay. When the worldwide wage explosion obviously then gave rise to a situation where there was a worldwide primary commodity price explosion in the early 1970s. Now, when that happens, the, you know. And was the world less globalized at that time? Post decolonization were primary commodities. I mean today, if there's a wage explosion, then you go to Africa. Was that an issue? No, it was not that they went to Africa, but the wage explosion is something which occurred because even though you had the, I mean, you know, the Vietnam War basically meant a lot of printing of dollars to finance it. That created some excess demand pressures because of some increase in prices. Not really an inflationary crisis, but an onset of an inflation because of the working class lost out a bit. So they tried to make up for it by demanding higher wages. You had a worldwide wage explosion in the late 1960s. Let's say, 68 or thereabouts. Then that got converted into a worldwide primary commodity price explosion, which lasted for some time and that got aggravated because the dollar had by that time, the Bretton Wood system collapsed. The dollar ceased to be the kind of, you know, as good as gold currency that was recognized by everybody to be so. So there was some uncertainty and a lot of speculators moved to primary commodities as a means of holding their wealth. Therefore, they had a primary commodity price explosion. When that collapsed, I mean obviously that explosion couldn't last for a very long time. When that collapsed and, you know, fears got settled as it was. Oil prices did not collapse because the oil producers had organized themselves into an opaque and they did not allow the price to collapse. On the contrary, they jacked it up. So the oil price hike came on the back of a primary commodity price explosion. I'm going to now jump again a little bit forward because I won't just get a sense as to. Now, if one looks at India, we have the 70s, we have emergency. Indira Gandhi gets defeated after that. There are certain social coalitions which coalesce. So if one looks at it, Indira Gandhi actually did extremely well in 1977 in the South. And more or less swept almost everything. The North is where she gets defeated. Then comes back in 1980. And there's a bit of a crisis. So she goes to take a loan. And from then on, from 1982 onwards, the first beginnings of these so-called reform staff. You've been through that place, it's from being a teacher, looking at, analyzing. What did you sense at that time? What is changing around you? And over the entire 80s, I would say, because you probably had a sense that things are changing. Yes, yes. Well, I mean, two things were happening. The first, of course, at an intellectual level, Thatcherism emerged. You know, Thatcher and Reagan and so on, which for the first time, very clearly articulated the position different from, not only of the Labour Party. I mean, after all, even in the Conservative Party, Edward Heath, for instance. I mean, Edward Heath was completely opposed to the creation of unemployment as a way of beating down inflation. But Thatcher pushed that line. So the whole idea that, you know, beat the trade unions, create unemployment, therefore resolve inflation at the expense of the working class. This political position was intellectually adopted by the right. And the right became powerful because there was an inflation. The left solution to that inflation was to have an incomes policy. That basically okay. You know, I mean, fundamentally, inflation is because different classes are competing to maintain their shares. So let's have an agreement and therefore have a prices and incomes policy. We've tried for a while, but it didn't succeed. And mind you, which would have meant a tremendous intervention in the functioning of capitalism, because capitalism doesn't function that way. So, but the right-wing solution was to generate unemployment and beat the workers, which is what actually got. If you could just explain to our viewers how that works. Just a very simple example. You see, the capitalist solution to inflation, which is being tried out even now, is that if you have an inflation, what is inflation? Inflation is, let us say, prices are rising by 10%. When prices rise by 10%, then the workers demand that they be compensated for the price rise. Money wages rise by 10%. It to maintain the same real wages before. When money wages rise by 10%, costs have increased. And therefore, prices get further increased by 10% and so on. So, that's called a wage-price spiral. So, you have a wage-price spiral, which arises because of the fact that the workers are being compensated for the price rise. So, if you can create unemployment. If you can, and beat... Then the workers will be forced to accept less wages. Because the trade unions then become weak. Because, you see, I mean, they can't go on a strike if they're a huge amount of unemployment. So, the point is that, you know, the typical capitalist solution, in a capitalist society, the typical solution to unemployment, to inflation, is to create unemployment through a recession. And reduce the demand of the working class. That's right. You know, their share. Yeah, their share of the... That's right. And that's exactly what has been tried out now. When you say that we are going to get, you know, curb inflation by raising interest rates. Now, what's the connection between interest rates and inflation? Essentially, if you raise interest rates, then demand comes down, aggregate demand. Therefore, unemployment is generated. And therefore, you actually have a solution in quotes to inflation. It reminds me of an interesting thing, because I remember speaking... interviewing someone from the RBI many years ago, asking them that food prices are going up and that is causing inflation. How does increasing interest rate reduce that inflation? Are people borrowing to eat? Because you've already banned for our futures trading in food. So they say, no, no, no. It is inflation expectation. The thing that you're talking about, that people might end up asking for more money if inflation goes up. And that is what we have to curb. Now, one of the things that comes to mind from here is that that change that happened. Yes. So one was this sort of intellectual change that occurred. But the intellectual change was a result of the fact that the religious regimes, both in the West as well as in India, had got into a sort of contradiction. I mean, had got into a dead end. In the West, it was inflation. Here again, I suppose the middle class had grown. They were not enough job opportunities being created. Mind you, rate of growth of employment in that regime was higher than it is today. But nonetheless, the feeling that time was that if we open up the economy and so on, then we would have greater opportunities, which is true for the prosperous middle class, for the professionals and so on, because capital comes in and so on. But on the other hand, not for the bulk of the population. But this impression was created because I think that regime had run into a kind of dead end. And after that, if one goes back and watches these documentaries, suddenly Friedman, Hayek, these people became heroes. And actually, if you look at their work, they're not of the quality of, with due respects to economists. As a non-economic student, as a student of history, when I look at their writing, it seems quite banal sometimes to me. I'm probably being unfair here, but they became these big heroes. And there was no space left. And if I look at the 90s in India or the 2000s, there was no space left for a counter-voice at all. How organized was this according to you? Well, I mean, the two names you mentioned, Hayek and Friedman, what is common between the two and in fact, to the entire right-wing economic thinking is that they believe that in a capitalist system, there's no involuntary unemployment, that the capitalist system functions at full employment. But full employment... Provided you could give 1 rupee wage. Because 1 rupee sum on my work. Full employment is what they call a natural rate of unemployment. In other words, there's a certain amount of frictional unemployment. There's job waiting. I don't know. It takes me some time to get to that job. That's basically it. Or I don't want to work. I don't. That's voluntary unemployment. Yes, frictional unemployment. There is a lack of information. Yeah. So their solution to unemployment is not increasing aggregate demand, but in fact, improving information flows. Now, the point is that that kind of thing, Keynesian economics had destroyed. Obliterated, you know. But on the other hand, that made it come back. You know, the point you mentioned about inflationary expectations, I just want to slightly go back to that. You see, that those who say inflationary expectations are going to be beaten, their thinking is that it is all in the psychological level. That we raise the interest rate. People think that inflationary want to come down and it comes down. But I think there is an additional factor. Namely, it actually weakens the bargaining strength of the workers. It actually weakens their capacity to raise money wages. So while inflationary expectations do play a role in exacerbating inflation and so on, but fundamentally, it means a shift in the class balance. In some ways, when they say that if you raise interest rates, inflation will go down and people expect inflation to go down, they assume they know this thing. You ask an average person, they have no idea. But the reason I was asking you about how organized was this, because if one goes back and looks at it, and I'm not saying any conspiracy theory or anything like that, because there seems to be an organized entry of the certain sections of the global capitalist class taking over public discourse gradually and weeding out anything which is against it. Yes, that's absolutely true. But you see, right from the beginning, when Keynes did his general theory, there was a lot of opposition to it from the city of London, which is the center of British finance capital. Now, therefore, finance capital was always opposed to Keynesian policies. Keynes himself thought that this opposition is because of lack of knowledge. He thought that over a period of time when they get to understand my theory, because after all, his theory was to save capitalism, they would overcome their objections to it. But in fact, there is a specific opposition of finance to all these policies that actually raise, I mean reduce unemployment and so on. This was there throughout. In the post-war period when social democracy was on the ascendancy, finance was on the back foot, because in the post-war period, the working class was not going to take it lying down. They had come out of the war, made immense sacrifices, they don't want to go back to the interwar period capitalism. In fact, if you remember, in the immediate post-war elections, Winston Churchill lost the election. Because he opposed the NHS and things like that. That's right, I mean his views were very right-wing, except that during the war, they had him as prime minister, but the working class hated Churchill. So he lost the election. So the point is that this was a period in which finance was on the back foot. Two things happen, of course, over a period of time finance recouped its position, and secondly it got globalized. You see, this globalization began because huge amounts of dollars poured into the European banks, and they were looking for places to go to. And therefore, there was a lot of loan pushing to the Third World. Institutions like the IMF and the World Bank and so on were actually mobilized to take over the intellectual discourse. In many Third World countries, World Bank officials or IMF officials were put into critical positions within the IMF, I mean, sorry, within the finance ministries of Third World countries, first in Africa, I mean Africa. The finance ministry itself was given an importance greater than any other ministry inside these countries. So it was really an assertion of finance, exactly, through institutions like the IMF and the World Bank and so on, but even otherwise through media. One has to say that it was done very successfully and at times very subtly, because I remember reading a piece that in the 80s when Indira Gandhi took the loan and she came back and changed certain education policies, and some of them were under the instructions of the international institutions, which is focus on quantitative studies as opposed to qualitative studies. Now these are very interesting and subtle changes, but coming back to now, one of the arguments that I made is that India was ruled by a bureaucratic managerial class at one point which in some ways is what would be called the middle class, which had a nationalist position, which was in power, which had a kind of, I would say, collaborative relationship with the corporate world or the capitalist class, but kind of ruled them in a sense. How did that change and how important is the emergence of finance capital in that? You know, there was a policy in India for a very long time that employees of the World Bank and the IMF would not be employed by the government of India. Absolutely, in other words, if you are a World Bank employee, it's another thing you kind of resigned and suppose, I mean, I don't know in such a case maybe it was possible, but you cannot simply move from the World Bank and the IMF to the Finance Ministry in India and you know, that changed roughly in the 70s. Oh, okay, it started in the 70s. It started in the 70s. I think, no, was it the 70s? Manmohan Singh was the Finance Minister. So Manmohan Singh Finance Minister would be 91, but before that he was the RBI Governor for a while. That would be also I think 80. Yeah, maybe late 1970s or something. I think he was the economic advisor, chief economic advisor. I think roughly around that period there was a change and this was a complete shift from the old Nehruvian period. You know, I mean, you simply could not shift from these institutions to the government of India. Okay, but that changed and so the point is that, you know, this kind of a change was beginning to take place even before. You said 82 was the kind of, I think you are absolutely right because if you look at, it's quite interesting. You look at the growth of income inequality. It's just jumps from 82. Exactly, you see because Piketty's figures show that in 1982 the top 1% of the population in India had only 6% of the national income. Today they have to only 2% or more, you know, so enormous. So 82 was in some sense or early 80s. I also said 82 because of Operation Forward, which Indira Gandhi, the first under Pranam Mukherjee, the change is the change. I want to come back to that Piketty question because it's an interesting thing because, but when you look at the change that finance takes over and in a sense that the government basically disenfranchises itself, the bureaucracy actually. I mean, I would imagine the bureaucrats want to rule and they want to control it, but from the 90s you see that they let go increasingly and hand over assets to the corporate sector. And we've taken up a lot of your time. I want you to kind of draw a kind of connection between that change and the rise of right-wing politics in India. You know, there's just one point which we have missed in this discussion. In societies like ours, I think an additional point has to be kept in mind, namely this non-resident expatriate Indians, because that was very important. I mean, you see when Lenin wrote, even when Keynes wrote, there was this general feeling that capitalism is on its last legs. Now the fact that in the post-war period, precisely because of Keynesian policies and so on, there was a big boom in capitalism because of which there was a certain amount of migration from third world countries like India and so on. From Punjab, for instance, quite a bit. To the U.S. and to Britain and so on, from India to those countries, from Turkey to Germany, from Algeria to France and so on, I think that created a kind of constituency for these kinds of reforms, because after all, I mean, it became at a certain point the desire of every middle-class family to send their children abroad, not just for higher education to come back, but to settle down abroad. I think that plays a very important role in the shift to the right and even in the strengthening of the BJP and political right, because many of them are really politically quite right-wing. How did the change in the class configuration? How important was the role of this bureaucratic managerial, let's say class, the rule there, in keeping the idea of dirigism going and in a sense associated with that, the notion of secularism? That's right, yes, yes. No, I think the real change came about within Congress. In other words, the BJP was not nowhere in the picture. The real change came about within Congress, Narsimha Rao's government and so on, that that was the shift. True India was, I mean, okay, that particular crisis you can look at in many ways, which was around the first Iraq war. Apparently, lots of Indians wanted to shift their funds to India when the Iraq war happened. But the Indian banks would not accept them, which was very silly because when we had a balance of payments crisis, we actually went to the IMF. When we went to the IMF, they imposed conditionalities. Now, even then, we need not have completely changed the entire set of policies because that crisis... But there was a constituency in India which wanted that. That's right, exactly. And that constituency was inside the Congress. When that happened, then, of course, you moved to a neoliberal regime and then all these things that we were talking about, namely, that it creates. I mean, okay, they're coming into being of a relatively more prosperous upper middle class and so on. I mean, there is a kind of process, there's a dialectic that then gets going, which then leads you to the BJP. So I just want to come back to the Piketty, Chancel, the calculations they do. And one of the things that I actually made a video on was on the bottom 30% of Indians. And if you look at the rate of growth of their per capita income from 1951 to 1982 and then 1982 to 2021, which is the data that they had at that time, their rate of growth of income is exactly the same. There's no difference. Whereas for the top 1%, it was actually flat, slightly negative, till 1982. And then it grows at 6.7% per year in real-term. That's a massive return in real-term. I mean, you add inflation to that, then it's huge. So you can see that huge difference. So how important is inequality? And this is inequality in enabling the absolute rich to completely capture all institutions. I mean, how dangerous is inequality for democracy in that sense? Yes. In fact, the argument that people like Piketty put forward is that this enormous increase in inequality is fundamentally inimical to democracy, which is absolutely true, obviously. And I think we can see the way that inequality, I mean, obviously, if I'm earning a very fat salary and I am a media executive, then I'm not going to go and propagate for any egalitarian society. I would rather take the position that we were discussing earlier, that look, I mean, this inequality is really the price to pay for talent and so on, which is the... Now, so I think the... I mean, I think as we were discussing, the change begins earlier, but there's a dialectics of it because of which the growth in inequality further consolidates the change. It consolidates the change in views, the change in ideas, the debunking of the earlier regime, the debunking of all kinds of, let's say, reservations. I mean, the Dalits are being tampered because of the fact that they really don't deserve all this, but they are being tampered and so on. That entire mindset, which I would really call a counter-revolution, if you think in terms of the freedom struggle and the colonial struggle as a social revolution, which in many ways it was. I mean, obviously, it's not a social revolution carried as far as the left would have liked, but one person, one vote is an enormous change in a society like us. And whatever limited land reforms, etc. were important. Absolutely, yes. And the counter-revolution gets strengthened because of this growth. I'm sure you're not familiar with Hindi cinema, the world of Hindi cinema, but there is a movie called Kuli with Amitabh Bachchan, in which he got injured. And the poster of Kuli is Amitabh Bachchan with a hammer and sickle. Literally, he's wearing a red Kuli and he's got a hammer and sickle. So this is 1983 and probably shot in 1982. Of course, in the background of, I think, the Bombay strike. So therefore, there is that sense. And you come 20 years later and there is Amitabh Bachchan with a look and saying that tradition is everything. So that change, one can actually capture in public culture. The ruling elites change in being pro-people to being... There's a huge difference. I mean, when I went to school in the 80s, you couldn't really say that the poor are poor because they're untalented. Absolutely, exactly. And today it's par for course. Yeah, yeah, yeah. One of the things that I want to ask you is that is there any solution to this crisis? There are two parts to it. One is that today, as I was... I had just written in Tribune about how infrastructure spending actually doesn't help at all. It doesn't create jobs. It doesn't create anything. Then I actually quickly... I saw that you had written recently about how infrastructure is essentially for the rich. That's right, yes. I saw it. I wish I'd read it before writing. But this focus on infrastructure, one thing, that is that virtually doesn't create anything other than not even actually profits for infrastructure companies because they're all loss-making. Cement companies do well, but infrastructure companies don't. The other part I want to understand from you, and we have to wrap up, I guess I've taken a lot of your time, is why is there such low labour participation in India? Two different questions, but in some way I think connected. Okay, the first thing I'd like to say is that the crisis of neoliberalism cannot be overcome within neoliberalism. And it cannot be overcome even by the Hindutva elements who are in power, which I call neo-fascism. I mean, you really cannot have new... You see, there is a fundamental difference between the 1930s and now. In the 1930s, you had right-wing government, fascist governments coming in Germany, Japan and so on, but they did get rid of the Great Depression because they had public spending based on borrowing. Now, and that is because finance was national. The nation-state was national. While today what you have is the nation-state is national, but finance is globalized. As a result, if you have government borrowing finance pending, then finance is going to leave. In fact, if I'm not wrong, when Hitler came to power, he basically stopped banks from repaying the American loans. Yes, that's right. Yes, yes. So the thing is... And the entire Japanese thing was financed by fiscal deficit. So fiscal deficit was something which was used by the government. Whether or not domestic finance liked it was immaterial because anyway, domestic finance was more or less persuaded by the domestic government. But today that's not the case. That being the case, you find that the current crop of governments, extreme right-wing governments, are incapable of overcoming the crisis of neoliberalism. So our unemployment instead of being overcome would actually become worse and worse. People's living conditions would become worse and worse. And even the prosperous segments in the middle class that you were talking about earlier who are now experiencing relative stagnation, even decline in their living standards. So that I think the system is going to... Or is coming to again a kind of dead end. Now, when that happens, then I think you'll have to go beyond neoliberalism. How you go beyond neoliberalism... And this is quite obvious. I mean, you know, even Joe Biden, it seems that the West is going faster. That's right. The West recognizes it because I think intellectually they are more independent than our intelligence here is. Just as Keynes was in his time. So, while the Western intelligentsia segments of it are recognizing that even the Financial Times writes out editorials talking about the need for a new Roosevelt Keynes moment, they are still thinking in terms of going back to Keynesianism. They see the need for change, but they see the change is going back to Keynesianism, which I don't think in the work. But I think the change is imminent. It has to happen. And in India, you see... So, would you put India, especially the Modi regime, would you treat it slightly differently? Because in a sense, this government keeps a certain, let's say, group of big conglomerates on its side. But at the same time, it tends to spend on things which would get it votes. So, and in India, it seems to me people are so poor that you don't need much to appear to be doing something for the poor. So, is that slightly different from... But, you know, if unemployment increases, in other words, you have a given number of jobs and more and more people among whom these jobs are actually distributed. If that is the case, then I think... I mean, there is no doubt that people's conditions have actually become much worse. The fact that in 2017-18, the National Sample Survey on Consumer Expenditures, those data were not even released by the government. You know, it's quite interesting, because what was leaked in the newspaper suggested that the per capita real consumption expenditure in the entire rural area was 9% lower than in 2000. But there was something to be seen there, because if you look at it, it said that the bottom 10% had actually got more, the top 10% had gone down by 30% in rural... Yes, it's perfectly... But on the other hand, there's a huge segment in between. Which is affected by it. Yeah, which is affected. Affected by it. So, the point is that even though you may be able to ameliorate the conditions of the very, very poor to some extent, like this free food range and so on, but on the other hand, the mass of people... There's a huge overhang. Absolutely. The mass of people would continue to suffer. What stops people from even looking for work? And that's what puzzles me. There is one thing to say, there's unemployment. Right? But people don't look for work. Why is it that in India, even male labour force participation rate is so low? You see... Probably lowest in the world. Yeah, but I mean, there is a discouraged worker effect that, you know, if it is the case that actually jobs are not available, in that case, people stop looking for jobs. When you say stop looking for jobs, what you mean is that they stop looking for jobs, which are as it were captured in the various surveys and so on. I mean, yeah, what they may be getting some informally jobs and so on. But for instance, CMI collects two kinds of data. One is when they look at those who are actively seeking work, which is technically what they would do for the labour force. Exactly. But they also do something that if you were offered a job, will you work? Which they call the greater labour force. Only 43% say that if we were offered a job, we would work. So that's the gap between the greater labour force. So I'm saying that there is one thing which is to say that there is no work and therefore I'm not looking for it. But there's another which says I will not work even if I were offered that. Is that because wages are so low that the work that they can get is so poor that it's not worth going to work? No, it is conceivable that some of these people who say no would be people who are getting some work. Some work. But you see, unemployment figures in India mean very little. Because I mean, I'm talking on the official unemployment figures. Because whether you had an hour's work in the last one week, I mean, if you had three hours work earlier and now you have one hour's work, you're still employed. You're still employed. So the point is that- And if you've lost a construction job and gone home and you're going to the field and sitting there, then you're a farmer. Exactly. So I think what actually happens is that a given amount of work then gets distributed among more and more people. That's basically- And the hour's job. Yeah, that's right, exactly. That's basically the form that unemployment takes in societies like ours. So it is, I mean, obviously it's nobody who's fully unemployed. You have some job. But on the other hand, it is conceivable that if you're offered a job, you may say no, not because you're completely unemployed. I mean, if you're completely unemployed, you'd say yes, but you've got some kind of a job you may not wish to- But is it possible that anything that you're offered is simply not worth it because you- It's quite possible. It may involve moving out. It may involve all kinds of things. And as I said, nobody is fully unemployed. So to end the discussion, to quote the much-maligned marks, we say that it can lead to the common ruin of all contending classes. So are we in a situation where it's a common ruin of all contending classes or- No, I mean- I mean, I'm taking the pessimists. I don't know. I actually take a lot of encouragement from the fact that the farmer agitation was so successful. Now the workers, for instance, you had a convention recently, they are now going to be engaging in massive strike action. All over Europe, there are massive strike actions taking place. In other words, after a very long time, in fact, almost from the days of the Margaret Thatcher period, you have a revival of working class militancy everywhere, including here. Including here. Here it has taken longer. But on the other hand, I think there is some revival. The farmers are on the warpaths. And I think the coming into being of some kind of an alliance between the farmers and the workers is certainly on the agenda. So I would expect that actually these days are going to end. I mean, by which I don't mean tomorrow or day after. But I think we are moving to a conjuncture in which this change is on the horizon. Okay. On that optimistic note, thank you so much. Thank you, Professor Pratnayak, for giving us your time. Thank you. Thanks a lot. And if you liked this video, please press the like button because that's going to ensure that YouTube pushes it out to more people. 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