Academic journal article World Review of Political Economy

Nation State , Marketisation of Social Services and Uncertainty of Livelihood in India

Academic journal article World Review of Political Economy

Nation State , Marketisation of Social Services and Uncertainty of Livelihood in India

Article excerpt

1. capitalism and changing role of state in Global north

This article addresses the new institutional framework of world capitalist system named neoliberalism and its impact on various segments of Indian economy. capitalism has been a global phenomenon since its origin. India being a part of the global capitalist system cannot be separately examined without taking the changes of world capitalist system into consideration. In the present phase of capitalism, dominated by the international finance capital, globalisation has become an inevitable part of economic growth in India. In order to examine the domestic and present situation of India, certain issues require global and historical understanding. therefore, the changing role of nation State and its impact on socio-economic aspects in India require global understanding of the same issues.

Starting from the nation State, the history shows that the State in any socio-economic formation cannot be neutral. It always protects the interest of one class at the cost of other classes. regarding State, lenin (1964, 5) argued that

It is an organ of class rule, an organ for the oppression of one class by another. In a capitalist society, in the first place, the State comes into action in the economic sphere in order to solve problems which are posed by the development of capitalism. In the second place, where the interest of capitalist class is concerned, there is strong predisposition to use the State power freely. And finally, the State may be used to maintain the stability and functioning of the system as a whole.

The above explanation has a deep meaning if we really want to understand what nation State is.

The classical liberal economic thought that has been adapted by the orthodox economists from the writings of Adam Smith and his followers was dominant in the world scene prior to the Great depression. the philosophers including Hobbes, lock, Hume, Kant and Adam Smith have more or less the same idea that the role of the State should be facilitator for the achievement of private ends. their ideas of liberalism associated with the belief that State ought to be minimal, which means that practically everything except army, police and law enforcement ought to be left to free dealing of citizens. they favour laissez-faire economic policies, because it is thought that these policies lead to more freedom and democracy. this idea of liberalism was actualised in the USA and Europe prior to the Great depression. Prior to World War I, the accumulation process under world capitalist system was driven by the progressive forces of free competition and uncontrolled finance capital. Under the rule of liberal State, the 50 years of progress (before 1929 crisis of capitalist economic structure) in the USA and Europe produced the extremes of wealth on one pole and extremes of poverty production on the other. the rapid industrialisation and urbanisation process has transformed the rural and agricultural people into urban proletariats (Wolf 2012). the free competition resulted in contradictions within the nation State in the form of conflicting interest of industrial and finance capital. It had put some hurdles on the profitability and accumulation process of capitalism. this process of uncontrolled growth of industrial and finance capital led to the crisis of capitalist economic system in the 1930s. the primary cause behind the 1929 to 1933 depression in world capitalist system was the growth of large-scale financial sectors along with professionally managed corporations and cartels. the working class, which was the main driving force for the circulation of capital, has experienced stagnation in real wages resulting in the decline in demand for capitalistic production. While the highly speculative financial sector that tried their efforts to sustain the compound growth of capital through loans and credit creation had led to Great depression in 1929. during this period, franklin d. …

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