Bampanth The Left

Neoliberal Capitalism has Reached a Dead End

Prabhat Patnaik is a world renowned Marxist intellectual from India. He obtained PhD degree in econimics from Oxford University and he is Professor emeritus at the Center for Economic Studies and Planning at Jawaharlal Nehru University. He has coauthor with Utsa Patnaik, A Theory of Imperialism (Columbia University Press, 2017).

Indeed the hall-mark of the contemporary global situation is that the neo-liberal phase of capitalism has reached a dead end and there is no clear way forward for the system. It is this situation of crisis that makes neo-liberalism enter into an alliance with neo-fascism, a phenomenon observable all over the world. In India this alliance expresses itself as a corporate-Hindutva alliance, which has acquired power at present. Unlike the fascism of the 1930s however, today’s neo-fascism cannot provide any way out of the current capitalist crisis.

  1. Patnaik, you’re a renowned Marxist thinker from the global south, your thoughts carry the voice of people who are struggling against the double onslaught of global capitalism and local reactionary forces. How do you view the global situation and contemporary significance of Marxism, particularly in South Asia?

Patnaik: Marxism is not just a point of view, or a mere ethical position that seeks an end to exploitation. It has a scientific content: the minimal scientific content of Marxism in my view is its recognition that capitalism is a “spontaneous” system, one that is driven by its own inner tendencies. Individual participants in the system lack “agency”, in the sense that their actions are dictated by their position within the system, which they would lose if they acted otherwise, rather than their own volition.

In that sense everybody under capitalism is alienated, including even the capitalists, though of course the alienations the different classes are not identical: Marx called the capitalists “capital personified”, that is, through their actions the inner tendencies of capital work themselves out. For instance the capitalists accumulate not necessarily because they like it, but because, if they did not, they would fall by the wayside; the tendency towards the self-expansion of capital expresses itself through the non-volitional actions of the capitalists. In capitalism in other words there is a Darwinian struggle in which every individual economic participant is caught.

Now, Marx did not cover many areas in his analysis, such as for instance imperialism; but his theory is absolutely indispensable for all because of his recognition of the “spontaneity” of the capitalist system, which is both true and fundamental: human history cannot end with a “spontaneous” system, unlike what all bourgeois thought believes. In that sense, being a Marxist is not an optional issue: one has to be a Marxist if one wishes to understand the current human condition and to overcome it. Even the current global situation can be understood only in these terms. You will remember the celebrations that had greeted the collapse of the Soviet Union, which was supposed to have confirmed that there was no going beyond capitalism; but that very capitalism is now caught in a protracted systemic crisis.

Indeed the hall-mark of the contemporary global situation is that the neo-liberal phase of capitalism has reached a dead-end and there is no clear way forward for the system. It is this situation of crisis that makes neo-liberalism enter into an alliance with neo-fascism, a phenomenon observable all over the world. In India this alliance expresses itself as a corporate-Hindutva alliance, which has acquired power at present.

Unlike the fascism of the 1930s however, today’s neo-fascism cannot provide any way out of the current capitalist crisis. This is because any overcoming of this crisis would require state intervention through fiscal means and that too only through larger state expenditure financed either by a fiscal deficit or by taxes on the rich, for only then can the state expand aggregate demand. The other possibility, namely taxing the working people, who spend the bulk of their income anyway, to finance larger state expenditure, only changes the composition of demand, but does not expand it. But both these ways of garnering larger resources for state spending that could expand aggregate demand, are ruled out under neo-liberalism, since finance capital dislikes both; and in a world, where the state is a nation-State and finance is globalized, the writ of finance must run, for otherwise there will be massive capital flight.

It follows that the neo-liberal-neo-fascist alliance will not overcome the crisis of capitalism today, unlike the earlier fascism that had overcome the Great Depression of the 1930s, through larger armament spending by the state financed by borrowing (fiscal deficit).

This global crisis is having an impact on South Asia as well. Sri Lanka, Pakistan. Bangladesh are all facing balance of payments difficulties, as finance is not coming into the economies to cover their current account deficits, and their currencies are facing depreciation: this would only aggravate inflationary recession in these economies. All over the world, and especially in South Asia therefore, what is needed is a new agenda that would combine the re-invigoration of democracy with economic relief for the people. Only the Left can provide such an agenda, around which it can unite all democratic elements.

  1. Since the time of Marx, the concept of democracy and dictatorship has been a contentious issue from the standpoint of class outlook.   Marx envisioned the “dictatorship of the proletariat” as a whole period of transition from capitalism to communism. This phrase has been much used and abused by the bourgeois press since then, creating a narrative of the bourgeoisie as “democrats” and communists as “dictators”. What are your thoughts on this issue in contemporary discourse?

Patnaik: We must distinguish here between the nature of the state and the form of government. The bourgeoisie is forever obliterating this distinction in order to paint the communists as dictators. The bourgeois state for instance represents a class dictatorship of the bourgeoisie, but the form of government within such a class dictatorship can be anything from a Constitutional monarchy, to a military dictatorship, to a parliamentary democracy. Likewise the nature of the state in the transition to socialism has to be a class dictatorship of the proletariat, but the form of government was visualized to be Soviet democracy, which initially it was. But, as you know, the specific historical circumstances after the Bolshevik Revolution were such that Soviet democracy had to give way to a one-party dictatorship.

It is a mistake however to think of the one-party dictatorship as the sole or the appropriate form of government in the transition to socialism. We know from historical experience that the one-party dictatorship becomes a substitute for the dictatorship of the proletariat, with the party substituting for the class. This eventually depoliticizes the working class and threatens the very existence of socialism.

I am not talking here of a one-party system versus a multi-party system, though I believe that a multi-party system, with each party committed to a transition to socialism, would have to be instituted; I am talking about the need for institutions so that the proletariat can express itself freely and can exercise its political rule.

Of course in societies like ours it is not a dictatorship of the proletariat alone, but rather a dictatorship of workers and peasants that is on the proximate historical agenda. This makes the need for institutions where the workers and peasants can express themselves freely even more urgent, as also the existence of multiple parties in the transition.

  1. Marxists also have an uneasy relationship with “Parliamentary Democracy”. India has been presented as one of the most successful examples of this form of democracy. The Left have their tryst with parliamentary democracy in West Bengal and Kerala. How do you view these experiences and their relevance?

Patnaik: There is indeed much confusion on this issue. Any attempt at making a transition to socialism will naturally be resisted by the bourgeoisie. This resistance will take several forms: the most elementary form of this resistance would be by making the transitional system dysfunctional through economic means, including by imposing crippling sanctions against it. If economic measures fail, or even alongside economic measures, there will be attempts at destabilization by imperialism and the domestic bourgeoisie through military means.

Against such destabilization attempts, and in anticipation of such attempts, there has to be the broadest mobilization of the revolutionary classes. As long as opportunities for democratic mobilization exist, these must be fully utilized; in fact the Left must struggle to establish such opportunities, and hence for a deepening of parliamentary democracy. Instead of boycotting parliamentary democracy, the Left must fight therefore for a deepening of parliamentary democracy, being fully aware of the fact that a “peaceful transition to socialism” is a mirage because of the bourgeoisie.

But owing to this fact of the bourgeoisie’s resistance, there is  often a belief in Left circles that all existing democratic institutions must be boycotted and only armed struggle must be resorted to. Except where there are no democratic institutions whatsoever, and no scope for open mobilization of the people, this amounts to a kind of “liquidationism”. Even in these cases the whole objective of the revolutionary struggle must be to bring into existence democratic institutions. The point of a revolution after all is to empower the people, not just to do good to them.

4. Left political parties in general and the Communist Party of India (Marxist) in particular seem to have lost much of its electoral appeal in the Pan Indian scene. As an observer and participant in India’s left movement, what is your assessment of the situation ?

a. How appropriate is it for left parties to continue to put their primary faith in a systemically rigged election process ?

b. What might be the lessons that Nepal’s left parties should perhaps learn from the Indian experience ?

Patnaik: The loss of support by the Left in India is not because of rigged elections, though this is not to say that elections in India are all fair. If, despite the scope that exists for organizing the people, the Left remains weak, then to believe that turning one’s back on this scope and engage in armed struggle will strengthen the Left, is simply irrational.

The reason why the Left has got weakened in India today, and indeed all over the world, has nothing to do with participation in parliamentary politics. It is because of the Left’s theoretical incapacity to cope with the challenges posed by neo-liberal capitalism.

There are two main areas where this incapacity manifests itself. First, neo-liberal capitalism represents the hegemony of international finance capital; under this hegemony a certain internationally-mobile middle class gets formed, and since the Left does not wish to alienate this middle class it develops an ambivalent attitude towards neo-liberalism. Sections within the Left even support neo-liberalism for its apparent “internationalism” and look upon any retreat from neo-liberalism, through delinking from the phenomenon of globalization, as a reactionary “nationalism”. Such an attitude also contributes to the Left’s ambivalence towards neo-liberalism.

Secondly, under neo-liberalism there has been a certain diffusion of manufacturing and service sector activities from the metropolis to the third world which has generated high growth in some “newly emerging” countries. Hence, wherever the Left has come to power, whether at the national or at the local level, it has been tempted to follow the path of inviting foreign investment and also investment by the domestic big bourgeoisie for developing the economy, even when such investment has been at the expense of the working people including the peasantry whose land has been taken over for this purpose.

This is the reason for the CPI(M)’s loss of base in West Bengal: its “industrialization” drive which was in essence no different from what other political parties are attempting in other states, alienated the peasantry that had been its pillar of support for decades. Attributing the CPI(M)’s loss of support to its pursuit of parliamentary politics is to miss the point, and to ignore the basic issue of the Left’s ambivalence towards neo-liberalism.

But of course neo-liberalism itself has now reached a dead-end, which provides the Left everywhere with a fresh opportunity to revive itself by adopting a correct agenda for the benefit of the people in this new conjuncture

5. Nepal’s experience shows that the left political parties have appropriated the names but not the programmes of what would be expected from the ideological left.

a. As a Marxist intellectual how do you read the evolution of this state of affairs in Nepal?

b. What would you consider the key hall-marks of a left agenda in countries like Nepal?

c. Does Kerala  offer any solution for the path of socialism oriented  development in Nepal?

Patnaik: I am not really in a position to say anything specific about Nepal. But I can make some general points. I think the people should have a set of Constitutionally-guaranteed fundamental economic rights, apart from, and on a par with, their fundamental political rights. I know that this suggestion of mine goes beyond what Marxism has traditionally talked about; but I think it is essential. At least a few rights, such as the right to food, the right to free universal education, the right to free universal healthcare through a National Health Service, the right to employment (failing which the state must pay compensation to the person who remains unemployed), and the right to a living old-age pension and disability benefit, must be instituted by a Left government. And the country’s economic strategy must be oriented not so much towards achieving a high GDP growth, as towards the realization of these fundamental economic rights.

Kerala provides a model of what can be done even when there are fiscal constraints on the government. But above all there is also the example of Cuba. The idea of waiting till the economy has “developed” to a sufficient extent before measures to improve the conditions of the people can be undertaken, is in my view a serious mistake. This improvement has to be immediate, which is what Cuba teaches us, and also Kerala despite its being a part of a bourgeois India. 

  1. In Nepal there seems to be considerable confusion among left parties and intellectuals about the role of comprador bourgeoisie (as agents of transnational capital) in the national economy. Could you highlight the essential features of comprador bourgeoisie and conditions under which they could transform into national capitalists or vice versa ? What has been the Indian experience in this regard ?

Patnaik: My own view is that this distinction has lost its relevance in the present context. It had meaning under colonialism and also in the immediate post-colonial period. Within the specific pattern of international division of labour, with the metropolis producing manufactured goods and the third world country producing primary commodities, the comprador bourgeoisie, mainly engaged in trade, had a vested interest in maintaining that old division of labour, while the national bourgeoisie, located in manufacturing, had an interest in altering that division of labour against the dictates of foreign capital.

But the days when a segment of the domestic bourgeoisie was interested in opposing metropolitan capital for this reason and imposing protection against imports of manufactured goods, are over. Neo-liberalism has opened up the economy to relatively free flows of goods and services across country-borders; so, there is no specific agenda of protection or industrialization that the national bourgeoisie can demand or support.

In a neo-liberal regime the term “national” bourgeoisie has little meaning. To say this is not to suggest that all bourgeoisie has become comprador; it is rather to claim that this distinction, relevant for an earlier era, has lost its significance. No section of the bourgeoisie is either interested in standing up, or has the capacity to stand up, to metropolitan capital; on the contrary the big bourgeoisie has got integrated with it.

  1. Capitalism has turned out to be a massive environment destroying machine. The so-called socialist countries  also have not done better. In this context the concept and movement of eco-socialism appears to be gaining momentum. What is your perspective on eco-socialism?

Patnaik: I am not a person who likes these catchy phrases. To talk of eco-socialism is to suggest that there is some other kind of “socialism” that is unconcerned with ecology. But in my view, any socialism must be concerned with ecology; and if it was not so earlier, then that was a wrong strategy for building socialism. I am a socialist and therefore concerned with ecology; I do not see why I should call myself an eco-socialist for that reason.

The reason why socialism earlier was not so concerned with ecology is because of a certain tendency within Marxism; this foregrounds production, or the development of the productive forces, rather than human freedom, including the freedom to lead a healthy life. According to this tendency, the superiority of socialism over capitalism lies in the fact that socialism carries forward the development of productive forces which had got arrested in the later stage of capitalism. I do not sympathise with this view; I believe that socialism’s superiority lies in the fact that human freedom can be achieved only under it. While the immanent tendency of capital is to spoliate nature, socialism has no such immanent tendency; its unconcern for ecological issues is therefore because of a wrong attitude, which I call “productionism” and which socialism must get rid of.

  1. What role do you see of intellectuals in the movement fuelled by class struggle  whose primary driving force are workers and peasants?

Patnaik: There is a class struggle in the realm of ideas which is not separate from the class struggle of the workers and peasants though it is conducted according to different rules. This struggle is not just about defending certain views and positions, but also about analysing the unfolding reality, linking it to the immanent tendencies of capital, and suggesting how to transcend the given conjuncture. Intellectuals are engaged in this class struggle and the importance of their role arises from the fact that without such intellection the struggle of the workers and peasants will be greatly handicapped.

This is not to say that if a separate group called intellectuals did not exist, the workers and peasants will not produce their own intellection for carrying forward their struggle; but it will be like reinventing the wheel all over again. Of course, I see socialism as a society of “great discussion”; in that society a separate group of persons called intellectuals will not exist; everyone will be an intellectual.


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Bampanth_The Left is a quarterly academic magazine published from Kathmandu. It is registered under the Sambad Publication following the provision mentioned in The Press and Publication Act 1991. The magazine aspires to serve as a bridge between scholars and activists to deepen our understanding of the socialism oriented socio-political transformation of Nepali society.

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