Why Capitalism Needs Imperialism To Drain Wealth From the Global South, w/ Economist Utsa Patnaik

hello everyone i'm rania khalik and this is dispatches imperialism is a stage of capitalism that's wrecking the world especially the global south but why does capitalism need imperialism how did neoliberal capitalism adapt after world war ii to maintain its dominance and how is it fueling neo-fascist movements today to answer this and more i'm joined by renowned marxist economist utsa patnayak she's the author of many books including a theory of imperialism and the more recent capital and imperialism theory history and the present co-authored with prabhat patnayak welcome thank you thank you so much for for joining me to have this i think very important discussion i'm such a huge admirer of your work i've learned so much from it and i guess a good place to start would be you know what is the importance do you think of marxism today in understanding how the countries of the global south continue to suffer from their wealth being drained by imperialism in past centuries well marxism is absolutely essential for understanding the phenomena you've just mentioned because it is only in marcus's theory that we have the concept of economic surplus as a very central concept the concepts of accumulation of capital and also the concept of the primitive accumulation of capital all of which are absolutely essential for understanding the phenomena of colonialism and imperialism and it is not simply a question of the impact of colonialism and imperialism on the global south but also its impact on the global north in making the global north what it is industrialized because this is a process of what has been often called the great divergence which really started only from somewhere around the middle of the 18th century before that there was not that much of a difference between the economic as it were uh levels of living of today's global south and today's global north and you know when we talk about like especially right now and we're talking about we're at this climate change summit and you know global south countries are talking about this big debt owed to them i don't think people really understand the amount of wealth that has been stolen and stripped away from the global south by colonial powers over the centuries and you've done a lot of work on this so can you give our listeners and my in viewers an idea of just you know how much wealth has been stolen by the colonial powers from the global south and it would be great here if you could maybe use india as an example well i think uh much more research needs to be done on quantifying uh the flow of transfers that is what economists call it of one directional flow of transfers from the global south to the north uh before it became the north and um there's an enormous area which needs to be explored which has not been explored uh about uh the magnitude of these transfers in fact even though uh in india we have had a literature which extends back to a century even for india specific long-term time series of transfer is something you do not find until very recently um the work that i have done that you have just mentioned because the relationship of colonial subjugation and domination the institution of slavery in the caribbean in latin america and for quite a long time in north america as well the mode of extraction of economic surplus which differed as far as different countries of the global south are concerned for example slave rent from the caribbean plantations owned by the europeans the slave trade itself and the accumulation through the profits of the slave trade and the rather different mechanism which was employed not only in india but also by the netherlands in java by france in indochina all these mechanisms and processes are fairly complex as an economist i realize how complex they are particularly because the economic theory that we are taught which is taken from the universities of the global north and from textbooks which are produced in these universities do not even recognize the existence of this type of colonial transfers at all so scholars in this area have to really apply their minds to first of all finding out what the appropriate theory is and how the received theory can be modified for example in the case of india we can nowadays quite easily apply keynesian macroeconomic theory which is the basis of national income accounting to build up a series but of course that is only a necessary condition that you have to be familiar with this macroeconomic theory because in the existing literature the theory relates only to trade between sovereign equal nations there is no recognition of the special character of colonial trade and exploitation at all so even the standard macroeconomic relations have to be modified in the light of one's conceptual understanding of what these transfers involved so it is by no means an easy task and as i mentioned to you systematic time series is something which we do not have even for india until very recently where i have tried to build it up you have time series presented also by professor amir bhakti in his path-breaking work uh perilous passage a mankind and the global ascendancy of capital he has also given a time series but that there again this book was only published uh you know less than 20 years ago so and as far as southeast asia is concerned uh which was exploited by the french as far as java is concerned exploited by the dutch as far as korea is concerned exploited by japan as far as britain's other qualities are concerned no systematic estimates is exist at all so the answer to your question is that there is a lot of work to be which has to be done by the scholars of these regions and in particular while work has been done by some scholars on a super exploitation of colonized labor that is not exactly what we are looking at when we are looking at colonial transfers we are looking at essentially how the budgetary revenues were used the revenues which were raised by putting very heavy taxes both the direct taxes and indirect taxes on the colonially subjugated producers were used in a very abnormal manner they were not used in the way that they are used in the metropolis at all a large portion of the budget was used simply to pay the producers in local currency for the goods that were taken away from them but since these very same producers had been obliged to contribute the taxes to the budget uh you have a situation where they appeared to be paid because there was a market exchange you know they were receiving money and they were partying with the goods which were exported by the colonizing power so they appeared to be paid but they were not actually paid because the money was coming out of their own money that money that they were paid out paid as payment for their exports was out of their own tax contribution so all that was happening in the case of india for example is that the form of the tax payment that they were made that they had already made in cash only changed into kind that is into goods but it still remained tax they were being taxed out of their goods they were not actually paid for them but it was a very clever system which has confused people including people who are well trained in macroeconomic theory because the market is a very good uh you know sometimes market transactions can obscure real relationships and you have to get behind the market transaction to understand what the real relationship was so this is what is really flummoxed you know analyzes for so long and what are the lingering effects of this i mean you've talked about this in your research about the british colonial drain from india but a lot of times you know and this comes from kind of what you're talking about is colonialism is just kind of like glossed over in textbooks and it's it's thought of as something in the past but it still has an impact on the way structures exist today so what are the lingering effects of the british colonial drain on india today well you know um if you if you don't mind my saying so the very formulation of the question is something that i would not conceptually really uh be very happy with because the question has to be formulated in the way what was the lingering impact or the what was the impact then of these colonial transfers on the global north not just the impact on the global south because it was a two-way thing you see what they took from the global south is something which without which the global north would not be what it is today there would not be no there would not be an industrial global north at all in my opinion so i would like to come back to the question you've just posed later on perhaps about the lingering effect okay and i'd like to really say a few words about the effects at that time not the effects now the effects at that time okay so um you know uh before that let me just mention very quickly that uh the one of the problems why we don't understand the mechanisms of colonial transfer at all all the impact it had on the global north is because we do not have the conceptual apparatus for understanding it and we do not in the global south have the conceptual apparatus because we are taught not to think we are taught to simply absorb the textbooks which emanate from the northern universities and uh you know just to absorb uh what is being produced there without uh and in fact the pioneers of economic theory are held up to us as models you know as great men which no doubt uh in some respects they were but in other respects uh they developed theories which were entirely incorrect and fallacious that is only after a lifetime of thinking about these problems i realized that adam smith's invisible hand never existed it was a ghost in the machine you know and what has been ignored there was the very visible hand of the colonizing state if you take britain as the first colonizing nation which built up the largest empire in modern times in the world then how did it reach that position it reached that position through systematic state intervention through a systematic uh wars that were fought between the handful of maritime european nations you know the nations which had navies which had sea cos and of course these nations to recapitulate were portugal spain france netherlands britain and later on much later on they were joined by germany belgium italy and japan which were the late industrializers but in the beginning it was just this small handful of maritime european nations which went out uh in a process of violent expansionism uh ostensibly to find trade rules but one thing we must remember is that they fought britain amongst each other for controlling trade routes to today's global south why did they do so what was the imperative behind this and what we have tried to uh explain in our book both uh in our jointly author's book both in a theory of imperialism and capital and imperialism is that uh the reason one of the most important reasons to live in something nobody talks about at all and they don't talk about it to this day there is not a single textbook of economics i've come across not a single book on economic history of the colonial period emanating from northern universities i have seen which talk about the fact that the cold temperate countries located in today's global north and located of course at that time also in northern europe and north america were extremely poorly endowed when it comes to the primary sector and the primary sector includes not only all agricultural production but also the production of other primary materials like energy you see and what was the main source of energy in the past before the 1830s to the 1850s fossil fuels were not in widespread use at all the main source of energy for uh for transportation of produce and for human beings and energy for cultivation for drawing the plow and so on that also came from agriculture in the form of feed grains for animals so the primary sector the agricultural sector was a vital importance for any country's development because this is the sector that gives us our food food grains other foods are raw materials for processing into manufactured goods it gives us the energy source it gives us the material for building gives us the fibers for clothing in fact everything that underpins a nation's standard of living comes from the primary sector and the endowment of resources from the primary sector in the cold temperate countries was in the past and remains today extremely poor now this is not something this is a material reality which is not mentioned in any book at all because the books that you get yeah not a single book and i'm going to pay [Music] and histories are the subjects i'm talking about i'm not talking about the books on environment and the books when the scientists write because they are aware of this but the most ideological subjects in a sense are economics and history because they serve interests you know there's certain class interests both in the global north in the south they serve national interests so these are the places where you find the theories which completely ignore material reality so what we have tried to foreground there is this fact and later on i think uh you also intended to ask me about for example oil and the middle east and so on or east asia well oil is also a primary product and as a matter of fact to this day uh of the total known global supplies of fossil fuels only 11 is known to be located within the territorial boundaries of today's global north only 11 hour wow almost 90 lies outside their territorial boundaries they don't have even access to fossil fuels and of course because of the when i talk about the poor primary sector endowment a lot of it flows from the climate which they can't do anything about they could not do anything about it in the past and they can't do anything about it today because no amount of technological change under capitalism has so far changed the target in the cold temperate countries in which most of today's global north lies you have only one crop producible in the whole year in contrast to the warm countries of the global south where we can produce two crops a year minimum and in favorable locations up to three crops a year so already your productivity of land is two and a half to three times higher it was higher in the past it remains higher today and in our book i have given you uh a table from in the book uh a theory of imperialism i have reproduced modern data from the food and agriculture organization to show that despite all the technological advance that you have in the most advanced capitalist country the united states if you take the output per unit of area in the united states then china produces three times that output per unit of area that is output for hectare taking output in physical units just the tonnage of all the food crops that china the similar food crops that the us produce and china by the way has a smaller total cultivated area even india where the productivity is much lower because we don't have that degree of intensive cultivation as in china in modern times we produce 50 more of physical output per unit of area compared to the us so do not think of the global south as poor the global south is rich in resources and had it not been rich in resources there would have been no reason for these maritime countries of the global north to undertake a very long and difficult journey halfway around the world and remember before before the swiss canal was excavated and became operational in 1869 the west europeans had to come all the way around the cape of good hope 14 000 nautical miles minimum to reach the coast of eastern africa and to reach the coast of western india and even further to reach to southeast asia to the spice islands of java and to china so it was a very long journey it was a very difficult journey and you do not undertake external expansionism of that kind and put in so much effort so much investment so much manpower and face the rigors not only of the journey but of also the tropical climate and tropical diseases unless you have a very high stake right and these stakes were extremely high for them and this is not understood you know it's not understood to this day i'll tell you an anecdote uh some years ago in fact many years ago now more than 20 years ago i was walking along the seashore in durban with a comrade from the african national congress and he was telling me that look i think you know these white men from europe they were just crazy they came all the way here just for a handful of spices and i mean he had been taught that you know the europeans set out to find spices so talk about all you know that's it uh but we are not taught that more than spices you know it was much more than spices it was this enormous tropical biodiversity which they wanted access to and britain could not even produce grape wine which at least france could the latin european countries the countries of the mediterranean region where you yourself are making this recording from that is from lebanon of course uh than northern europe and north america because at least you have you have always had the gift of the grape vine and the olive northern europeans have not had and also citrus fruit which they did not have access to so we have to remember that the global south is not more was not poor and it's not poor in terms of resources and that is what invited the uh you know the greed of the european powers which came out to some and why subjugation what why was normal trade not enough why could they not exchange their goods for the goods of the global south the answer lies in the fact that the populations of the global south simply had no demand for northern goods it was true i love that yeah everything they required themselves uh they could produce all the you know the food that they require they could produce the manufactured plug the clothing in fact india was arguably not only the largest producer of cotton textiles but also the largest exporter in the world right up until the early 19th century and similarly for china the chinese emperor when he was writing a letter to george iii who had sent her an envoy uh to argue for to demand or rather ask for trade concessions for the british to trade in china said uh that you know our kingdom has everything it needs we do not need to trade but since you cannot do without our pottery our tea and ourselves uh the european populations have a demand for our products uh we allow you to set up you know a trading force in canton so it was really a one-sided demand and what in economic terms it meant was that there was a continuous flow of silver from europe to today's global south to settle the trade deficit they had because they imported much more than they could manage to export of their own products so you know a trade deficit always has to be settled through outflow of international money and the international money was gold and silver that was accepted all over the world so the european nations found that they had a continuous drain of silver to the global south so that the fact that they introduced trade at gunpoint arises from the fact that they wanted our goods they wanted the goods of the global south free they wanted these goods without paying anything for it uh and this is a fact which of course not a single textbook not a single book emanating from universities in the global north will admit to well yeah because admitting admitting to that would be basically admitting to the fact that they can't survive without without the global south and without taking from they have nothing to give in return i mean that's a really wonderful way to put it uh yeah so uh i think you asked a question about the magnitude of the transfers now i started work on trying to measure the magnitude a long time ago in fact 20 years ago the first article i wrote on this which long article was titled the free lunch transfers from from the tropical uh during the and the subtitle was something to the effect that uh the role that transfers played in the industrial revolution in england because there in fact for the very early period from 17 the 1760s onwards when a clive acquired the diwani of bengal that is when he acquired the right to collect revenue from bengal from the mughal emperor emperor that is when the uh transfers really start because that is when the east india company starts using a part of the revenues they collected from bengal to buy the goods that they needed which is as i've said a very abnormal use of revenue and in fact when tribe first got the right of collecting revenues in 1765 the officials of the east india company really went completely mad with avarice because they were just a trading company they were not rulers for the first time in history a trading company had actually become a ruler of a very populous and rich province of mughal india eastern india present-day bengal which at that time comprised what today is not only west bengal but also orissa bihar and what is today bangladesh so it was a very large province agriculturally very rich so they went completely mad and they used local mercenaries to jack up the rate of revenue collection over five years from 1765 to 1770 they trebled the collection of revenue from the present peasants and artisans in bengal and obviously the previous ruler who was a you know feudatory of the mughal emperor uh had been collecting sufficient already so if you tremble the revenue connect over five years then what will happen they took away the seed com they took away the what the presence required for their own consumption so there was a massive famine and the officials of the east india company uh the senior officials who came from england who toured bengal said that roughly about 10 million people have died of starvation in bengal out of a total estimated population of 30 million so remember when we talk about the bengal famine british rule in india started with a massive famine in bengal which is again not talked about in the literature at all including the literature which emanates from western educated bengalis that is people who were educated in western universities or even in indian universities but reading the uh the textbooks which emanate from the global north and who are born and brought up in bengal you will not find any mention of the magnitude of the bengal famine even in their world so the extent of intellectual colonization is something rania that i would uh wish all of us to be aware of because it is not as though it is only people in northern universities who don't talk about it even our own intellectuals are so completely intellectually hegemonized by the discourse and the fallacious theories which come from the global norm they don't talk about it either so one-third of the population being killed is no job dying of starvation is not a joke you know and that is why it took bengal you know more than 30 years to recover from that when cornwallis came after his defeat in north america you know the north american settlers attained independence from british colonial rule cornwallis what was out there and he was defeated he came sailed all the way to india and he instituted the permanent settlement of bengal where he told the landing landed proprietors in bengal that look at the end of 1791 they uh put a revenue demand on the bengal proprietors which would be fixed forever and he said i'm giving you a very good deal the revenue demand is pretty high it's stiff but it is not going to increase now why did he do that because he wanted the population to recover there had been huge depopulation and fallen output for the population to recover for output to recover so that the british could continue to get a higher level of taxes the permanent settlement was necessary but they did not make a permanent settlement anywhere else in india after that okay and the reason for the permanence judgment again is not discussed anywhere in the literature now as the magnitude of the train you see the actual magnitude which i compute is a gross underestimate because i have only taken the export surplus of commodities that went to britain for the early period i had taken the commodities which went not only from india but also from the slave plantations of the caribbean that britain owned that is from the west indies so the transfer from the west indies from india and the transfers from ireland because ireland was also a colony of britain british landowners took away land from the peasants in ireland and they themselves constituted themselves as the landowners and they extracted rent from the irish presence who were reduced to a terrible state of being really completely popularized because the rent rates were so high and the irish were also taxed so the early estimate i made was from all three regions from the west indies from india which at that time from 1765 to the 1820s primarily was really bengal because the tax system in india was extended only from the early 19th century to other parts of india so and ireland island bengal ireland asia and the west indies and that estimate is the trade deficit that britain had which it did not have to pay for because in the case of the caribbean it was slave rent which was pure economic surplus they took in the form of commodities in the case of bengal again it was paid for by taxes raised from the same population who produced the commodities and in ireland it was taken in the form of land range so that estimates came to about between five and a half to six and a half percent of britain's gdp gross domestic product in britain from 1770 to 1820 that is the british period of the first industrial revolution in britain and without this transfer that industrial revolution would not have either taken place at all or would have taken place if at all over a very much longer period because my estimates show and i'm using the trade data that the british economic historians themselves have put down in the volume edited by michelin d called british historical statistics and the compilation by ralph davies uh in his very important book which again is not referred to enough you know uh the industrial revolution and british overseas trade so there you have the time series data i'm using those data of their histories which their own historians have not used and it comes to between five and a half to six and a half percent of britain's gdp and it practically doubled the rate of capital formation in britain between 1770 and 1820. so this is very important to remember it is not just the effects in the global south industrialization itself the industrial revolution which in britain which acted as a local material which then pulled along other european countries uh you know would itself has not would not have taken place in the form that it did without colonization and the colonial transfers very important so we have to look at it from the point of view both of the global south and the global north it's an interactive process of exploitation which led to industrialization at one pole and which led to popularization and actually de-industrialization at the other pool because i said my estimates were an underestimate because i have not taken account at all of the fact of the discrimination against the manufacturing industries of the global south because we were manufacturers we were not simply primary producers we had a huge manufacturing sector india had an enormous manufacturing sector dominated by textiles but also metallurgic health products manufacturers of all descriptions of course not on a factory basis on an artisanal basis china similarly had a very large manufacturing cell sector of silk of cotton and of other products of daily use and in the case of india there was active discrimination by britain to throttle our manufacturing sector for example the british kept their economy protected against the inflow of indian textiles from the year 1700 until 1774 for three quarters of a century there was a complete ban on the import of indian of textiles from both india and persia by the way because before that there used to be textile imports the east india company imported vast volumes and values of textiles from india and from today's iran not only cotton textiles but also woolen textiles silk textiles from china and of course carpets and so on from persia so there was a complete ban on that uh there was a and the 1700 act was passed in parliament in order to protect the british woolen industry because the woolen manufacturers complained that our custom is going away because of the imported products actually they were they were not losing very much custom but they were afraid of the imports so there was a complete ban and the ban lasted until 1774 that is three quarters of a century and let me again stress that the historians of industrial revolution in britain if you look at david land's book uh which is on technical change in the british cotton textile industry the title is very nice titled the unbound prometheus and a very useful book but no reference to the protection of the british market against indian and persian textiles no reference at all if you look at the marxist historian eric hobson very renowned name then again eric hopson in industry and empire and subsequent books has no reference at all to the discriminatory protectionism exercised against india and persia for three quarters of a century no reference why wow why are people eric helps mom was a marxist you know but the master's discourse itself has been hegemonized to a very large extent by the dominant discourse which was set in motion by adam smith and david ricardo so it is very important in my view when you are asking me your transfers magnitude of transfers to understand that we have to we have to uh get away from this domination and um when i started reading i was completely dominated also i i studied for my doctoral thesis uh in oxford university but then i transferred to cambridge because my spouse got a job in cambridge so i've studied both under supervisors in oxford university uk and in cambridge and a very wonderful marxist economist was my second supervisor that i had in cambridge university morris dawg uh who wrote the book called studies in the development of capitalism which started the famous dobbs we see debate you know on the transition from feudalism to capitalism in europe uh i'm sure you must have heard of the dobbs sweezie debate which was followed later on by the so-called brenner debate on similar themes and so on so even with my supervisor who i really looked up to tremendously and i used to teach his book myself to my own students when i came back to india for decades but when i look at that book now i find that again there is really no awareness at all of the importance of to british industrialization of colonial transfers long-distance trade is mentioned in dobbs book studies in the development of capitalism but only in terms of the higher profit rates that the various companies the east india company and other companies enjoyed and the higher profit rate from the slave trade but the fact that it was not just profit rates the fact that they acquired control over the taxation capacity of a population which was several times the population of britain in asia the fact that they ceased assets huge land assets in north america and central america from indigenous populations it was simply acid grabbing because the indigenous populations were massacred the remnants were driven into reservations so this enormous land uh assets of north america and it's 3 000 miles you know from the atlantic to the pacific coast so this huge assets were seized by the maritime europeans who then migrated there and settled there now those processes of primitive accumulation are not actually mentioned and not actually discussed in any kind of detail nor is the slave trade discussed the fact that you know west africans were physically kidnapped from there and after all why were the profits of the slave trade so high when you think about it they were so enormously high because you know when slaves were when people were enslaved and free people were enslaved and treated as as commodities those who engaged in the slave trade did not pay for those comma those slaves treated as commodities all they paid for was some guns and you know a few manufacturers including clock that they imported free from india uh through the person which they had who kidnapped the west africans now kidnapping and transporting people is not the same as paying for the the cost to the communities even if you think in capitalist terms in very inhuman terms of human beings commodities they did not pay they did not pay the communities or the cost they had incurred for raising them from childhood to adulthood to a position where they could be of use to the slave drivers there again they got human beings free they only paid for the cost of transporting them kidnapping and transporting them across the atlantic that is why the profits of the slave trade were so enormously high and of course they did not care what proportion of the slaves died on the way because they were crammed like worse than cattle in the holes of the ships and so on so this uh you know this disgusting history of the rise of capitalist industrialization is something you do not really find discussed adequately in the literature which emanates from the northern universities and i think it is about time that more people in the global south got down to writing their own history and to writing not contaminated by the fallacious theories which they are forced to learn from but to look at these theories critically now the one theory i have tried to look at critically because immediately when i studied ricardo's theory of comparative advantage i knew there was some there was a problem with it there was a very big problem there was a logical fallacy in it but it is one thing to realize there's a fallacy in the theory but another thing to pinpoint it what where exactly is the fallacy because ricardo was an extremely intelligent person his formal level of formal argumentation was so high so good there is nothing wrong in his formal argument which says that you know he takes a two country two good model the two countries were britain and portugal the two goods were uh woolen cloth in britain and wine in portugal and he says that even if portugal produced both cloth and wine at a lower cost per unit than britain did it would still be beneficial for these two countries to specialize and enter into exchange depending on where the relative cost advantage be that is if uh portugal produced wine relatively more cheaply than it produced clock compared to britain then protocols girls should specialize in wine production britain should put specialize in clock production and if the exchange then actually the output would increase they could each enjoy a higher level of consumption of one good for the same level of consumption of the other good in the post-trade situation compared to the pre-tribs there's nothing formally wrong in the argument at all but what was wrong in the argument is in the assumption the assumption is that all the countries could produce both the goods but england could not produce grape wine because grapes could not be grown on in the field in britain the climate does not permit it particularly not at the time that uh ricardo was writing in the you know uh 18th century because britain is too cold you can grow grapes in river valleys in france or even in germany but not in britain okay i believe the situation now has changed you have genetically modified crops so people are trying to grow some grapes in the thames valley but at the at that time no and ricardo also uses a very strange term he says if britain were able to grow wine you know at a lower cost than portugal then you could have the rivers you could have britain growing wine all the wine and portugal producing all the clocks now what is this grow wine this is a term ricardo uses uh if it has been an indian writing or even a lebanese writing i would say but ricardo's bobbiness had immigrated from spain two generations earlier he was an englishman so it was the use of the term grow wine is a verbal fallacy which is under undermining his material fallacy the material fallacy is the assumption both countries can produce both goats that is not true tropical goods cannot be produced could not be produced then cannot be produced today in cold temperate class let's get that quite clear so ricardo's assumption was wrong and where the assumption is not true the conclusion of the argument is false it's not true it is not true that both countries benefited from the trade one country certainly benefited and the reason the trade was undertaken was not because portugal thought it would benefit from the trade but because britain used a superior naval power and diplomatic finesse to impose a treaty on portugal under which portugal was obliged to allow britain access to its force in exchange for wine and you know portugal avoided de-industrialization because british cloth poured into coated portable that was the condition of this treaty that portugal would buy british cloth and sell a wine in exchange so this cloth came into portugal and what would normally would have happened it would have displaced portuguese producers of cloth would have produced unemployment for them this partly happened it would also have produced a lower grain output in portugal because you know area would have been diverted to wine production and this did happen portugal did suffer a fall in its grain output these are the two important results of free trade deindustrialization and fall in domestic food trade output as your land resources get diverted to export crops okay now i want to impress upon everyone the importance of looking at the economics of it there is a politics of imperialism you know there is a cultural dimension and ideological dimension to imperialism but the economics of it underpins it all and the economies of it is fairly simple it is just that people don't talk about it at all that is the books really don't talk about it at all you know the courses we are taught don't talk about it at all it is just put under the carpet swept under the carpet the material reality and this material reality of de-industrialization and fallen food food grain output is a material reality which was true in the past it is true today okay well that is the connection between the past and the present which i'll expand on a bit later but to come back to your question about the magnitude of the drain since i have not taken account of deindustrialization i've taken the export surplus as the measure what is the export surplus it is exports of our commodities minus what we import from the colonizing country but then what we imported we imported under duress we did not import out of our free will because the colonizing country closed its markets to our export of manufactured goods and then it opened our markets wide to dumping of its manufactured goods on our market so if i take the imports from the metropolitan power and subtracted from our exports i'm actually underestimating the adverse impact okay so by measure is an underestimation i've not taken account i could have taken account of it by saying that you know india was the largest producer of cotton textiles in the world why on earth and it produced the raw cotton didn't have to import the rocker it is incapable of producing raw cotton itself then or now it had to incur all the cost of importing the raw cotton across the atlantic from the southern states of the us and later on during the civil war all the way through the swiss canal from egypt and through the source canal from india so why on earth should india be importing cotton textiles from lancashire the reason was the british market was close to indian textiles but the indian market was kept forcibly open to dumping by off lancashire textiles okay so that import is something which was not the result of the choice of indians at all so i could have made an estimate in which i cut down the imports by that amount and get a much larger export surplus from india as a measure of the date i have not done that i have deliberately kept it an underestimate okay and that export surplus amount expressed uh was obtained as i've mentioned through a very clever financial instrument that is the council bills now you know i don't want to just talk about the estimate without talking about the way one arrives at the estimate because that would be really dumbing down the discourse you know i know that there's been a lot of uh discussion online i i myself am not on any of the online platforms i don't read anything on twitter you are you aren't missing out good for you and i'm very jealous that you're not reading twitter your life must be much better than most of us who spend too much of our day consumed by social media that's true but it's more or less a deliberate choice because there has to be some amount of dumbing down of the discourse you know yes and as an academic i wouldn't like that you know i just don't want people talking about 64 trillion dollars of drain and not really understand what the mechanism was i think the mechanism is far more important than the actual figure because you know the figure will differ depending on uh what kind of interest rate you apply because uh you know what i'm doing is a very a method that keynes also used a method which montgomery uh martin a very acute observer a british observer probably from scotland judging from his name he wrote a book about the drain from india as far back in it as 1838 and he gave evidence to a select committee so uh you know there is a very old discourse but after 1857 uh the mechanism of the drain change before that it was very simple east india company was simply using a part of the revenues it collected to buy export goods directly from the producers but after 1857 when the uh the crown took over when the british government directly took over from the east india company and started ruling india the mechanism became more complex but it's not so complex that a lay person without any economics cannot understand it if it is explained properly so you have this mechanism in which now india's export goods are going all over the world and there's a huge demand for it which is growing in continental europe which is industrializing in north america later on in latin america and also in japan which are all why because particularly the global north which includes continental europe north america and japan need the commodities not only the raw materials but also food which they themselves cannot produce at all because of the monocrop the single cropping which is imposed by that climate and in fact even the goods they can produce in their summer they cannot produce in their winter they have to import it from the global south so the seasonality factor is also there so there was an enormous increasing demand for the goods from the global south and it was earning gold and foreign exchange what happened to all that gold and foreign exchange that we earned that our producers earned and africa was being brought under colonial rule similarly african produce started uh going out to the metropolitan countries latin american produce started going out it was a global system of flows from the global north to the south of commodity but what happened to the exchange what happened to the foreign exchange and gold that was earned in the indian case all of it went into the account of the secretary for state of state for india in council who was a minister of the british government he held one of the two most important portfolios of the british government all of it went into his account why did it go into his account why did it not come back to the indians who had earned it well they used this very clever mechanism where the secretary of state said to foreign importers of indian goods who had to send payment for their goods to the indian exporters they said look you need to send payment give your dollars and your franks and your dutch marks and your sterling and remember most of the period there was a system of fixed exchange rates so you can express all your dollars and france and et cetera in terms of sterling so i'll just talk about gold and sterling so deposit your gold your silver and your sterling payment for your imports from india with me and i will issue you a bill of exchange to an equivalent amount in rupees you send that bill of exchange supposing i'm a american importer of indian goods i bought 1 000 worth of goods at that time the exchange rate of the indian rupee to the dollar was three rupees could buy one us dollar now it is 72 rupees so at that time three rupees bought one us dollar so you have to send three thousand rupees paid three thousand rupees to the indian exporter you give me your thousand your thousand dollars to me i will issue you a bar bill for three thousand rupees you send that bill either by post or by telegraphic sen transfer to the indian exporter he puts that bill in an exchange bank in india and he is paid rupees what is not mentioned in any book including in keynesian's book indian currency in finance is that the rupee payment to the indian exporter came out of taxes in the indian budget so the it came through the exchange banks but it came out of the portion of the indian budgetary revenues which was year marked all through as expenditure in england so roughly about one third on average but it fluctuated between a quarter to sometimes it could go up to even 40 of the total indian budgetary revenues was being paid out to indian exporters now the actual producers of the export goods were precisely the people who had who were the taxed as in the form of direct taxes in the case of the presence they had to pay the land revenue or they paid rent to their landlords who in turn paid land revenue so they were paying the taxes into the their taxes comprise the budgetary revenues or they had to pay indirect taxes in the form of the salt tax which made salt seven to eight times uh more expensive in british india because salt was kept a colonial government monopoly they were paying the taxes and again it was out of their own taxes that they were being paid when the council bill was being encashed the only difference is that now you have a bill of exchange that's all that is the only difference compared to the situation under the east india company but it was such a clever mechanism that it fooled everybody okay and it is really uh the measure i am taking off the drain from india is the value of the council bills which is expressed in the statistical abstracts for british india both in pound sterling as well as in rupees so the secretary of state for india in london had a claim on the revenues that part of the budget revenues in india you do not have this situation anywhere anywhere except in a colonial system so the question i would like to ask the scholars from indonesia the scholars from indochina from malaysia from vietnam and so on is have they looked at how the budgetary revenues were being used by the dutch by the french because i have no doubt at all that the dutch were not importing enormous quantities of goods from java all that sugarcane and all that timber and so on and they were actually paying for it not at all because the javanese had no demand for dutch products similarly the vietnamese and other residents of colonial into china had very little demand for french products what could france export to them they already produced everything themselves so it must be the case that not only the british in india but also the dutch and java the french and indochina were doing the same thing they were actually using taxes collecting collected locally and they were defrauding their local producers by not actually paying them the rupee or the local currency equivalent of their foreign exchange earnings so two things were happening the entire golden foreign exchange went into the british treasury in the indian case okay britain did not have the capacity to earn the extent of gold and foreign exchange which is actually recorded in the british balance of payments through its own domestic exports it could only build up an enormous uh as it were you know store of golden foreign exchange which served to actually settle its trade deficits with continental europe and with north america through all these gold and foreign exchange which it appropriated from the colonies by defrauding the producers by not paying them by so-called paying them out of their own taxes which meant that it taxed these goods out of them so that is the measure of dream and it is a very conservative measure and that is exactly equal to what is recorded in the statistical abstracts for british india as expenditure in england and this is what is percent observers how could rupees in the indian budget become pounds spent by england so this is the mechanism through which it happened they kept all the sterling that indians earned and all the gold and they simply paid the local producers out of their own taxes the same system was continued as before it's not very difficult to understand is it i think even if you're not an economist you can get the point in fact [Music] mainly the economists who are puzzled because they are trained in changing macroeconomics they can't get their heads around this peculiar system of colonial exploitation which is not there in bilateral relations of trade and investment between two sovereign countries it does not exist it only exists in the bilateral relationship of trade and investment between a subjugated colony of conquest and the metropolitan power it's a special system which was set up by them and the metropolitan economists kept quiet about this they didn't want the local people to local intellectuals to get wise to what they were doing so if you read james john maynard keynes's book the first book he ever wrote the first job he ever had was in the india office in london the first book he ever wrote was indian currency and finance in 1913 based on his experience gathered there he gives you the accounts of the secretary of state for india in council the debits and the credits now in the credit part he does not mention what the secretary of state was actually receiving he was actually receiving gold and foreign exchange from the world as its payment for indian expo he doesn't mention that he only mentioned mentions on the credit side the rupees that the secretary of state claimed from the indian job budget so no mention of the gold in sterling at all and this is deliberate i'm sure it is not accidental because none of the people at the very top levels of the british financial and economic and administrative hierarchy uh wanted the actual mechanism to be widely known right they knew how it operated but even the uh hundreds of uh british administrators at the local level who spent their lives in india i doubt if they ever realized how the mechanism actually operated so that is why we call it a drain at all because it was not painful okay and well the estimate i get is uh you know around um you know it was in pound sterling so it comes to around 13 billion pounds sterling but of course if you take it up to uh independence indian independence up to 1947 from 1765 to 1947 then it comes to a little less than half a billion pounds half a half a trillion jesus half a billion pounds uh you know around 500 billion which is half a trillion pound sterling and for um up to 2020 it comes to around 13 and a half trillion pounds journey now many people were not very happy with palm sterling and that reflects the modern situation where the world's reserve currency is no longer the pound sterling the currency which is considered to be uh the currency of the global capitalist leader is not the pound selling any more it is the us dollar yeah they were more comfortable thinking in terms of the dollar even for uh some journal and uh newspaper interviews that i gave they said can't you express it in terms of dollar the pound sterling meant nothing to them it's very interesting so that is how since the exchange rate of the um indian rupee uh sorry of the dollar for the pound sterling and this was a system of fixed exchange rates was around four point eight five dollars to one pound sterling so whatever the estimate i have in terms of pound sterling and that is the basic estimate gets multiplied almost by five okay so that's how you get the 64 trillion dollar estimate that some people are talking about and they say oh it's too high and so on but you must remember you know actually it's not too high the compounding is being done at five percent per annum and the exchange rate at that time and that is the exchange rate to take the historical exchange rate of the uh dollar against the pound sterling what that was that the american citizen had to pay almost five dollars to buy one palm street because britain was the world capitalist leader at that time of course it was the world capitalist leader only because its economy floated on the enormous sums of money that it took from its colonies the enormous commodities that it took and sold all over the world and kept all the gold and foreign exchange for itself the enormous degree of defrauding that it did of the colonized producers okay that was the reason that britain was the world capitalist leader um okay so that i think answers that part of your question we can come to the effects in modern times if you like i wanted to talk to you about how you know post call posts decolonization like how did the neoliberal economies adapt after the second world war uh to maintain their dominance because now we're going from a colonial system to something that's different but maintains a lot of these subjugationist relationships and then i want to touch on how this neoliberalism which is something that you you and um pat nike write about in your newest book how that's leading to this kind of rise of neo-fascist movements so could you start by just briefly talking about that transition after world war ii between what we would call the colonization period to now this this kind of different sort of imperialism that maintains that dominance and how that dominance is maintained through this new system okay let me uh talk a bit about the whole rise of neoliberal policies first you see after decolonization a country like india had a period of almost 40 years you know four decades in which he tried to de-link from the old patterns of colonial trade it built up a system of protecting uh pretty produced presence and artisans who had been so badly exploited all through the colonial period culminating in the great bengal famine of 1843-44 because as you uh perhaps know if you've read my uh our uh chapter in the book and my earlier paper on the bengal famine uh you know three million civilians died in bengal during the second war over a period of 18 months solely because britain paid place the burden of financing the operations of allied troops countering japanese advance in south asia it placed the whole financial burden on the indian budget it was this last act of you know exploitation and appropriation from the indian people of course it promised to pay back uh a certain part of the expenditure that was undertaken but in effect it paid back very little at the end of the day and in the meantime uh there was a huge explosion of expenditure um you know a seven-fold explosion of public expenditure to finance allied troops because they had to be fed they had to be clothed they had to be transported they had to be housed in barracks so there's a huge war boom which was financed primarily through printing money and that most of spending was in eastern india and that led to a hyper sort of inflation so that is how food went out of the reach of the ordinary mass of the people who had to buy food from the market there was no rationing system for them there was only a rationing system for the people directly involved in war production so the price was paid by three million civilians who died of starvation and this included at least one million children aged 14 years or less so in my paper original paper i called it a genocide by economic means the fact that it was a genocide by economic means that the information was deliberate it was a method of raising resources from the indian people is something that was that has not been recognized to this day it has not been recognized to this day and um after this traumatic experience which the you know the patriotic leaders of the indian national congress and of the left movement the communist parties all lived through it was a lived experience for them seeing the bengal famine before their eyes they said never again we have to prioritize food security for our population for this we have to build barriers to the free export of food even if the global price is high doesn't matter until our own population is fed we are not going to export so we have to de-link from the exploitative operation of the global market because that in the past has always meant that the global north has sucked away produce from our lands at the expense of inflicting hunger and starvation on our own people so system of cornering of the economy from global trade was undertaken and most other decolonizing countries did that but they had very little time to do that for example the african countries decolonization only took place in the in the 1960s and already by the late 1970s they were in debt um through the britain woods institutions to the world bank and imf and so on india had a relatively longer period which we call the neheruvian period nehru died in 1964 these policies continued basically protecting the peasants and the artisans from this exploitative pull of the global market which was one-sided and which led to hunger and even starvation so that continued roughly until the late 1980s and the uh most adverse impact of colonial room apart from uh you know huge unemployment inflicted on our people because of the dumping of manufactured goods on an unprotected indian market deliberately kept open a while the metropolitan market was protected so apart from the deindustrialization the most important impact had been in diversion of our land from production of food grains which our own populations needed towards production of exported crops which also included irrigated food rates you see even though argentina was a huge producer of grain the british continued to import wheat from us because they got it free from india they didn't have to pay for it whereas you know from countries like argentina in the 20th century they had to pay for it you know argentina was no longer a colony so they continued continued to import irrigated grain they continued to import commercial crops non-food grain crops and even though our land is much more productive than northern countries land there is a limit you know it's limited in areas so you cannot keep diverting land and resources do we fill up uh to meet the metropolitan needs without something giving and that something which gave was domestic food grain production and availability the people were impoverished the purchasing power went down drastically because surplus budgets had been operated for the best part of two centuries all the things have been talking about the mechanism of the drain was essentially operating surplus budgets much more was being collected in taxes from the people then were being spent domestically only two-thirds was being spent domestically the risk was being spent uh abroad effectively so these were surplus budgets so in kenyan terms when you operate surplus budgets it leads to unemployment you know and a depression of incomes so income generation and employment were very badly affected in addition to the loss of purchasing power you had a physical diversion of land to export crops and a physical uh fall in output of rice and wheat availability for the domestic population so increasing hunger in colonized india until by 1946 we had reached the level of 137 kilograms per capita per annum of uh grain production uh grain availability that is not just production but even taking into account a small amount of import that was actually available to the book now not a single country in the world today not even the least developed countries have such a low level of grain availability as our population had by 1946 the year before the british finally quit india after almost 200 years of unbelievable exploitation which has still not been fully documented so far so that is the adverse impact the moment you open up to global trade which is northern trade trade which is dominated by the demand of the northern countries you find that your food drain production and availability for your domestic population goes down so the neoliberal economic policies which were brought in of course affected advanced country populations also because they involved measures of austerity of the state cutting back you know on expenditure on direct investment on the social sectors on health and education which has impacted also the poor and northern countries but in the southern in the global south the impact has been very much greater because the historical legacy of huge unemployment labor reserves in all of us labor reserves you know which we can no longer absorb the way the british or the french did because we do not have empty lands to migrate to lands which have been made of local populations uh through massacres and the local populations being driven into reservations and thank god those mechanisms are not open to us because they are ethically unacceptable so we do not have the safety valve of out migration on a huge scale and settlement of new lands that today's industrialized countries had in the past and which they employed to the hilt and therefore the you know the impact on the southern population is much more severe of neoliberal policies and we know what those policies are they've been so dis uh widely discussed i don't need to spell it out only the two main pillars one is that the so-called withdrawal of the state is not a withdrawal of the state it is the active intervention of the state to make sure uh and i think somewhere and chomsky has very correctly put it it is a war of the neoliberal state on the on their own poor in every country and that is kind of cutting back on direct investment on public codes of the supply of public goods from health education and so on healthcare education is something which has impacted which impacts the southern populations to a far greater extent but of course there are no so-called safety nets are there there are no unemployment benefits and so on the whole business of unemployment benefits of some safety nets was in fact broken in a country like britain and other european countries in scandinavia only after the experience of the second war so for a brief um less than three decades you had kentian uh you know expansionary policies being followed in these countries you had the long postponed social security uh a system of social security being uh instituted in the advanced countries but the global south had nothing of that you know there's no system of social security at all there's no unemployment system of unemployment benefit there is no system of guaranteeing food security so this was a system which was sought to be established food security through the setting up in india of the food corporation of india which undertook to procure at a minimum support price from the peasant producers grain as well as other crops later on other crops were added and other commodity boards were formed which procured uh you know commodities the cash crops as well like cotton um you know tea coffee spices and so on at the minimum support price which meant that the price market price was not allowed to fall below that okay so this was set up during the nerubian period and all this both the quartering off from the global market is absolute anathema to the advanced capitalist countries and to the international financial institutions so they want the reinstitution of free trade they wanted all trade barriers to be broken down and the agreement on agriculture which was formulated in advanced countries if you look at the provisions of that the provisions are basically to open up the agricultural sector of the global south the primary sectors of the global south completely to free trade and to the penetrated penetration of the northern transnational agribusiness corporations okay because they want access to the alliance of the the more productive lands of the global south as i've said the climate has not changed global warming is a total thing but global warming is not going fast enough for colorado or for germany to be able to produce raw coffee right thank goodness if you proceed further then you know lots of our low-buying islands would be the tropics would be inundated it's good it's going very slowly right so they still need our land to fill the supermarket uh shelves in the global north something like 70 to 80 of all supermarket products have a complete or partial input of commodities sourced from the global south the northern populations are heavily dependent on imports from the global south and they want the freedom to import without any restriction they want their active business corporations to come in and access products directly from our farmer they don't want any minimum support price the united states has been continuously attacking india in fact the entire you know policy of countries in the global south operating food stocking procurement of food grains stocking food grains so they can provide food to their own population this has been under severe attack for more than a decade now and the attack is still going on okay i can give you the specific examples but we don't have time of the kind of honesty which has been employed just three years ago the united states sent a memo to the world trade organization saying that india is giving forbidden market price support to reach to the extent of two thirds of the value of wheat production and for rice to more than 70 percent of the value of its rice production if you look at the basis of their calculation they're taking the price at which india was paying minimum support prices uh way back in the 1980s okay and prices have risen since then more than tenfold and they say in that memo that basically india should be producing uh paying at most the minimum support price they paid in the 1980s more than 30 years ago and then taking the exchange rate of the indian rupee against the dollar which was 12 and a half rupees to the dollar yen to make the calculation whereas the present exchange rate is 72 rupees to the dollar so the dishonesty in the economics of it the sheer dishonesty you know it's just unbelievable and it's all there i have done detailed critique of that but you know you don't get a critique of that which is direct from economists in the global south they are sort of all the time beating around the bush they won't call the spade a state that this is a dishonest calculation and this calculation is no basis as a matter of fact our business today are getting a minimum support price not all of them are getting it it's not being implemented properly they're getting a minimum support price which is actually below the world market price so the support is negative that is where the why they are asking for a system of minimum support prices where the prices are reasonable which allows them to cover their cost of products and this entire system of food security of course once the footprint is procured the government gives a subsidy out of the budget so that people in the far south of the country in food deficit safe states because they produce a lot of cash crops like kerala produces spices and coffee and tea and so on so the food grains they produce is not enough to feed the local population similarly in the northeast the food grain production is not enough but they produce oil which earns foreign exchange for their country so the central government has a duty to actually distribute food and to meet the cost of transport over a thousand miles 2000 miles you know this is a big country that we have here you can't expect people involved to pay huge uh prices for food the transport cost has to be subsidized you know because they are after all producing other things which are earning foreign exchange which goes into the central exchange so we cannot give up our system of food procurement industry that is what the farmers today are fighting for in india and this business of the opening of the indian economy to global trade which had already started from the middle of the 1990s because the neoliberal policies were instituted under pressure from the northern economies as well as pressure from the world bank and imf open up do away with uh you know uh reduce your uh direct your price support drastically do away with clarification completely uh do away with quantitative restrictions sorry completely and then convert them to tariffs and then reduce the tariff rates to three percent or something like that this three percent is a very favorite figure more than a century ago uh the unequal treaties that the western power signed with china said you can put tariffs only to the extent of three percent it's a kind of magic figure it's practically saying that you have to keep your open economy and open economy okay yeah so they love the three percent and they're still doing it essentially more than uh a century and a half later they're still saying at most three percent direct you know so there's a huge continuity if you look at the economic policies okay so this has already led to our farmers being exposed to the volatility ups and downs of global prices because effectively for the cash crops a minimum support price was withdrawn the state withdrew from the mid 1990s from procuring uh commodities like spices and coffee and tears the transnational corporations came in and directly started contracting with the producers and they're small producers these are not huge plantations at all you know yeah though they produce tea and coffee and so on they don't do it on large plantations they're small plots they're present producers and the translational corporations of course always pass on any uh fall in prices in the global market they immediately refuse to lift the crop from the local producers they violate their own contracts with them if there's a rise in global price they take the benefit of the rice so our peasants started committing suicide because they had taken loans in order to grow the cash crops growing cash crops generally means a higher cost than growing food drinks so they had taken loans to shift from food grains to cotton production and monsanto also got into the act with their genetically modified cotton plant most of the cotton plants today are now from monsanto's uh domestic subsidiaries providing genetically modified seeds so they have penetrated indian agriculture greatly i was mentioning that because of exposure to global price prices going up and down uh persons who had taken loans were unable to pay and since 1997 more than 300 000 farmers have committed suicide because of uh indebtedness this is of course a very well known fact but uh now they have lost patience because they waited for so long for the government to take action but it's very clear that the present government in particular even the earlier government was pretty callous because after all they were succumbing to the pressure to opening and opening up their indian primary sector which led to the presence suicides in the first place but the president government has gone one side one step further with the three farm laws because these are specifically designed to uh say that uh you know transactions of presence with buyers need not take place any longer only within the regulated markets now the regulated markets are where the minimum prices are applied so if farmers are approached outside the regulated markets this is and it explicitly says that uh corporations can enter into direct contracts with with the farmers so basically the laws are designed to facilitate the entry of the corporate sector both the indian corporate sector dealing in uh farm produce which is relatively strong or small but even more dangerously the very large transnational aggregation business corporations are now being given direct access to our farmers uh in on a legal basis which was not really the case earlier so this is what the farmers are protesting against and it is really for the survival of the entire system of uh independent relatively autonomous development and of food security in our country which has been undermined to a large extent but which still exists so these laws if implemented would really finish it off completely so this is a very very important agitation that they are undertaken and which has been going on now for a whole year well so you argue in your book that this that there's a direct connection between this failed economic neoliberalism that you just laid out there's a direct connection between that and the rise of these neo-fascist movements so my question for you is what is that why do we see the rise of these neo-fascist movements as a result of this neoliberalism and and how is it different from the kind of fascism that we saw in the 1930s and lastly is it more dangerous this rise of neo-fascist movements is this more dangerous for the global south well that's that's a question which has so many dimensions that i don't really think i would be able to answer it you know in any detail and it's a very fundamental kind of a question but you see the connection between neoliberalism and your fascism is clear when you remember that unemployment and loss of livelihoods um is what uh precipitated the rise of classical fascism in europe that is the great depression you know during the great depression who are losing jobs the this provides a very fertile ground uh for the rise of uh far right movements because uh it is very easy at that time for these improvements to mislead people in the wrong direction the actual analysis of why capitalism the capitalist system is must necessarily give rise to crisis periodic crisis is very difficult it's a very difficult one to convey to even to trained academics level into the lay on lay population okay the fact that it is a spontaneous system it's an unplanned system and therefore it is prone to crisis you see uh it is much easier for a new fascist leader to come in and to rise to power by misleading the ordinary massive people who are suffering the rigors of the unplanned nature of the capitalist system and capitalist exploitation to say no no your jobs have gone because you have allowed the immigrant population in there to blame or there's a minority in your country get rid of that minority and you'd be okay so targeting of immigrants targeting of a minority and the use of um you know um a kind of great power chauvinism the use of even more intensive aggression against other countries to solve your own unemployment problem through militarization increasing militarization because obviously militarization will in the short run give rise to jobs but in the long run as we know from the experience of militarization and of war it's an absolute disaster in terms of the toll in human lives and human suffering that it takes but that was the reason the same reason arises uh in the case of present-day neo-fascism that is the entire neoliberal in one of finance capital trying to keep the growth rates high basically by suppressing a mass consumption and finance as we know is always goes for the worst alternative finance is always uh extremely afraid of inflation because you know the whole basis of the capitalist system is that it operates on the basis of money the use of money in a generalized sense not only for transactions but also as a mode of holding wealth so that is why in a book that my spouse prabhupadak wrote more than 10 years ago the value of money he had already explained in there what is the connection between uh you know the value of money in a capitalist society and external drive uh to control uh resources because there has to be a commodity basis a commodity backing to maintain the value of money in advanced capitalist societies you know money has to be able to buy commodities if suddenly all prices treble including the price of coffee and all the things that you consume and you consume on the basis of imports from the global south then of course the dollar would no longer be considered a hard currency which is as good as gold it would not have that status anymore the us would no longer be financially the leading power so it is absolutely imperative for them to ensure that the value of money is maintained and a modern day imperialist expansion the desire to control oil resources is what was discussed in that book the value of money so your question later question about oil has already been taken care of as it were in that book you asked me you're talking about primary products but what about countries in west asia like syria and lebanon and iraq and so on which don't export much to the west but these the west asia is the region of oil yeah you know the bulk of the world's known oil supplies are located in west asia and there's been such an enormous discussion already on the topic of oil politics you already have um you know very uh you know scholars who move far more than i do uh ali khadri is there who's writing on west asia there's ajar so on so you know oil is has also been discussed as i've said in this book the value of money at great length well not at great length but it's connection to maintaining the value of money maintaining the stages of the dollar yeah the oil dollar exchange standard was already discussed in that book but what we focused on therefore uh was this whole question of the rest of the primary sector which had not been explained earlier in any other book to our knowledge so we shifted our focus away from one particular primary product is very important which is oil which affects west asia the most to the other primary products now you see uh neoliberalism has run into an apas okay with the various bubbles which sustained it the bubble and so on have now all collapsed so uh it is in order to maintain the value of money or to maintain the dominance of the dollar of its position as the reserve currency which underpins the position of the united states as the world capitalist leader to maintain the capitalist system as a whole vis-a-vis the global south it undertakes income deflation and income deflation is something we have discussed at great length of course it practices it within the advanced world itself against its own workers but most importantly it practices it against the global south okay so uh this gives rise to unemployment because when the state actually cuts back on expenditures when it reduces its fiscal deficit and just reduction even to zero is not enough the international financial institutions if you have a zero fiscal deficit then say you have to go to a negative fiscal deficit that you have to collect more in taxes than you actually spend you have to build up enormous stocks of um uh you know reserves because the global financial situation is volatile so your economy could collapse so you have to guard against that so countries like india absolutely unnecessarily has global capital flowing in we don't need that capital our current account deficit is very small we have not needed it in the last 20 years but this is what the advanced capitalist countries want they want to penetrate your economies so they want their capital to come into your economy so what we are essentially doing is something very irrational we have been doing and other countries have been doing china has been doing as well we are taking money from advanced countries not so for china more india at a high interest rate and then we are parking it as uh united states uh you know treasury uh bonds and so on uh treasury paper at a very low interest rate so if you do it as an individual you'd be mad you don't borrow money at a you know six to eight percent interest rate and then park it somewhere where you get two percent interest rate that is what developing companies have been forced to do over what they've been doing this is a new form of drain as well which i don't have time to enter into here so these policies of exposure of small producers to this kind of cutting back by the state of development expenditure under the neoliberal dispensation exposure to global price volatility has reduced their incomes have produced enormous rise in unemployment which was already high to begin with now this provides a very fertile ground in developing countries for these fascist leaders to come in and they are saying uh exactly the same things as hitler did in germany as mussolini did in italy they are pointing to their domestic minorities they are pointing to religious minorities to cultural minorities and saying and they're pointing to immigrants as targets and they're saying these are the people who are responsible for yours and of course the advanced capitalist countries are perfectly happy with that as long as the new cautious elites as long as the neo-fascist elites allow the transnational corporations to come in as they're doing in india as our present government in india is trying to do through the farm laws that it is run through parliament without consultation with the people who are most affected who are going to be most affected by them as they have done in other countries where you have the rise of new fascist movements they are all playing ball with the international financial institutions and with the advanced countries so the advanced countries are perfectly happy uh to go along with that you know and yes it is a very very dangerous situation for us in the global south in particular but the tide is also turning because it's a question of it's not a it's a question of struggle basically between two alternative visions and two alternative trajectories one is the very narrow vision the narrow extreme right wing and very dangerous vision uh which new neo-fascism uh embodies and the other is the vision which marxism and the left movement of internationalism envisages so it is always a struggle between the two there is no absolute victory at the moment of one side over the other and therefore the struggle really has to go on well utsa patnayakt world-renowned marxist economist i mean there's so much more to say and to hear from you about i hope we can bring you back on at some point in the near future and continue this discussion thank you so much for joining me for a very long time to explain all these things thank you thank you

Channel: BreakThrough News

Views: 122,011

Keywords:

Id: 6RF5vx1W_kk

Length: 100min 48sec (6048 seconds)

Published: Mon Nov 15 2021