State Planning Board Vice-Chairman Prabhat Patnaik has said that poor redistribution of food and other surpluses is leading to increasing inequality across the globe.
Inaugurating the two-day conference being organised by the Economics Department of the Central University of Kerala here on Friday, he said that though there was an increase in the worldwide productivity, its benefits were not flowing to actual workers. This was leading to increasing inequality in the world which was also resulting in lower aggregate demand.
Observing that there was an increased de-segmentation of countries in the North and South during the past two decades, Prof. Patnaik said the de-segmentation was associated with integration of the North and South countries in terms of capital movement. There were still restrictions on the free flow of labour, he said. Earlier the capital was coming only to sectors such as plantation and mining, he said, adding that the capital was now freely flowing.
Increased inequalities in countries such as China were leading to increased production and export of commodities, Prof. Patnaik said. It was also leading to a current account surplus in China and a worsening of current account in the United States, he said. The U.S. was the largest current account debt-driven economy in the world according to him.
Before the Great Depression in the 1930s Britain was the capitalist leader and the U.S. had taken over the top position after the World War II, he said. The U.S. economy was under severe crisis, he added.
There was no alternative country to take over the commanding position now, Prof. Patnaik said. A hypothetical solution to this was a ‘world state’ which could redistribute food and other surplus. He also said that worldwide there was a decline in the food consumption especially in cereals. Terms of trade were against the food products, he pointed out.
CUK Vice-Chancellor Jancy James presided over the inaugural function.
Presenting a paper on ‘Agriculture and food security’, R. Ramakumar, Associate Professor, Tata Institute of Social Sciences, Mumbai, said that in the new era, new technologies in agriculture that had emerged in the last two decades, such as Bt. Cotton, had actually enriched specific social groups in villages in the Vidharbha region of Maharashtra. The agrarian crisis in Vidharbha itself had been highly uneven across regions and across classes, he said.
