V.27: No.11-12 November December 1999 #318-319

Editorial Note, p. 1

"The Cost Free Trade: The WTO Regime and the Indian Economy," Utsa Patnaik, p. 3

"Multinational and Development: Revisiting the Debate," G.K. Lieten, p. 27

"Ethnic Problems and Movements for Autonomy in Darjeeling," Atis Dasgupta, p. 47

"Thoughts on the Communist Manifesto: Ideology, Parakis and Revolution," Prasenjit Bose, p. 69

Against Spurious History: T. K. V. Subramanian's review of Ram Sharan Sharma, Advent of the Aryans in India, pp. 130, price Rs. 195, 1999, Manohar Publishers and Distributors, New Delhi
**p. 95 Khalsa Tercentenary Celebrative Volume: I. G. Khan's review of J. S. Grewal and Indu Banga: History and Ideology: The Khalsa over 300 Years, Indian History Congress/Tulika, New Delhi, 1999. With Introduction and Bibliography. Paperback. Rs. 200.

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Editorial Note

The proposition that free trade is beneficial for all countries is central to mainstream bourgeois economics. It is invoked in support of both the structural adjustment programmes prescribed by the Bretton Woods institutions for the Third World, and the new world trading order being ushered in through the VITO. The theoretical justification for this proposition was provided originally by David Ricardo through a celebrated example. He considered trade between England and Portugal and showed that even if one of the countries could produce both cloth and wine cheaply, i.e. had an absolute advantage in the production of both goods, nonetheless, if their relative advantage in the production of the two goods differed, then each would be better off by specialising in the production of the good for which it was better suited and exchanging it for the other good.

Ricardo never once explained why countries differed in their relative advantages. Subsequent attempts to re-establish the Ricardian proposition have invoked the concept of factor endowments to explain why countries' relative capacities might differ; but this is an absurd proposition since the relative factor endowments, which include the magnitude of capital stock, are not fixed but change through economic policy, including trade policy, so that a policy of free trade has no independent anchorage. Utsa Patnaik in her E.M.S. Namboodiripad Memorial Lecture, which we publish as the lead article in the current number of Social Scientist, provides a powerful critique of Ricardo's proposition along altogether novel lines, namely that Ricardo's example itself was fraudulent: England was incapable of producing wine while Portugal was capable of producing both wine and cloth. His theory built upon a false premise serves as an apologetic for the colonial pattern of international division of labour which once again is being sought to be imposed on the Third World today. So pathetic however is the state of our intellectual life, so steeped in a comprador ethos, that these imperialist theoretical constructs are uncritically accepted by us and figure freely in our own discussions.


The paper by Kristoffel Lieten deals with yet another theoretical justification which is advanced in favour of structural adjustment, namely that it would bring large inflows of direct foreign investment into the Third World under the aegis of the multinational corporations and thereby enable them to break out of their backwardness. Lieten marshals a host of evidence to show that the MNCs have not been, and can not be expected to be, the "battering rams" for breaking down the barriers of backwardness. Indeed wherever significant development has taken place within the Third World, it has occurred mainly on the basis of internal resources and through the strategic intervention by the Third World state.

Atis Dasgupta's paper traces the historical background to the emergence of ethnic tensions in the Darjeeling hills and the demand for a separate state of Gorkhaland. While the formation of an autonomous Darjeeling Gorkha Hill Council was an innovative step taken by the Left Front government of West Bengal, the unsatisfactory performance of the Council under the GNLF has once again fanned the flames of ethnic exclusiveness and revived the demand for a separate state. Dasgupta underscores the destructive potential of any such agitation for the economy of the region and argues forcefully that only a combination of class struggle and further democratic devolution of power to the people can succeed in meeting the genuine grievances of the people of the hill region.

Finally we publish a rejoinder by Prasenjit Bose to the review article of Javeed Alam on the Leftword Books publication A World to Win which had appeared in our special number on the Communist Manifesto. We would welcome further discussion on the several issues raised by Alam in his review article.

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