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Caution against return to Keynesianism

KOCHI: The answer to global recession is to be sought not in Keynesian economic prescriptions, but in the practical application of the principles of Leninism and Maoism, said a symposium on “Imperialism’s crisis and Maoist alternative” here on Sunday.

The symposium, organised by the Maoist groups Struggle India and Porattam, said that socialistic centralised planning and creative use of grassroots-level enterprise could fight back not just the current global recession but also the business cycles built into the capitalist system.

In his keynote speech, Sukhendu Sarkar, economics professor and a functionary of Struggle India, said business cycles (boom, recession, depression and revival) were an integral part of capitalism. The current recession, caused by the extreme ‘financialisation’ of capital and promoted by speculation, had been fanned across the world by globalisation.

But while neo-Keynesians were clamouring for heavy doses of State intervention through public investment on the lines of the ones proposed by the economist John Maynard Keynes to lift the U.S. economy from the crisis of the Great Depression, these would not work now, Mr. Sarkar said.

This was because globalisation had severely restricted the abilities of independent nations to intervene.

“As capital is now far more globalised, the ability of a nation to formulate and implement its own independent tariff policy, tax policy, subsidy policy and supply-and-demand control policies are all limited,” he said. Because of the World Trade Organisation’s regulations, an individual nation cannot think of imposing import duties for a specific recession-ridden product or sell its home-made goods at low subsidised prices in a foreign market.

Mr. Sarkar felt that Keynes had romanticised the role of the State to the neglect of its class character. “Return to Keynesianism is neither possible not desirable,” he said.

He said socialistic centralised planning, with a strong focus on utilising the enterprising energy of the masses at the local level, was the right answer to misguided capitalistic economic development. Mao Tse-tung had taught that production relations must be continuously revolutionised. He had tried to correct the mistake of one-sidedly stressing technology and management.

Planning in socialist China gave due place to local initiative along with centralisation. Mao advocated “taking industry as the leading factor and agriculture as the base” and promoted all-round development that linked heavy and light industries to agriculture.

K. Shivsunder, M.N. Ravunni, K.P. Sethunath and Mohammed Irshad were among those who presented their views of a Maoist alternative to the U.S.-led economic imperialism whose offspring included the current global crisis.

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