Year: 1992
Type: article
Abstract: Policies such as privatisation of State-owned production units, reduction of State expenditure especially on subsidies and transfer payments, and removal of State controls in various spheres, which have been so much in vogue in recent years all over the world, are commonly perceived as constituting a 'retreat of the State', a movement towards laissez-faire from State inter-1 ventionism.This perception, shared alike by both the protagonists as well as the critics of such a shift, is however an erroneous one.The U.S. State, for instance, notwithstanding all the Reaganite rhetoric, has (apart from running huge fiscal deficits), continuously shored up the American financial system, made increasingly vulnerable by debt-exposition. 1 And the exc}lange rate at which Tory Britain plans to join the European Monetary System has nothing to do with a 'free market equilibrium'; it is a choice on the part of the State dictated by the interests of the City.Even in the fiscal sphere, where tax-cuts have accompanied welfare expenditure cuts everywhere, there is obviously a specific redistributive design at work, a specific kind of intervention embedded with the so-called 'retreat' by the State.In short, the blanket term 'retreat' by the State, is a gross misnomer.What we are witnessing is a transition from one paradigm of State intervention to another.This transition is not merely a shift from one technique of State intervention to another; still less is it a shift in abstracto towards laissez-faire.It has an e~ceedingly important class-content This shift, in general, is designed to bring about three important consequences: first, a weakening of the working class vis-a-vis the capitalists (so much so that many AJ:nerican economists see R:eaganomics essentially as a strategy for raising the rate of surplus value 2 ), secondly, a considerable centralisation of capital, i.e., driving out or absorption of small capitals by the large, and thirdly, a strengthening of financial interests relative to manufacturing interests within the capitalists themselves.I use the term 'in general' while mentioning these consequences because the progress of different economies along this path of transition has been uneven; and even for particular economies, the progress has been marked by complexities, so that the need arises for transcending the empirical level; besides, as we shall see later, the consequences of this transition for developed and
Source: Social Scientist
DOI: 10.2307/3517779
Author: Prabhat Patnaik
Language: English
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W2795519230