The fact that an economy, even when it experiences a higher growth rate in the capitalist segment, is saddled with an increasing unemployment rate, goes against the grain of conventional growth theory as indeed of the basic presumption underlying policymaking. In India, for instance, faced with growing misery in the midst of accelerating growth, the standard response has been that such “exclusion” will disappear if the growth rate can be further accelerated.

Against the

The inflation in food prices of the early 1970s that arose out of excess demand for cereals disappeared in later years not because of any significant supply augmentation, but because it was substituted by an income deflation on the working people, including the peasantry, over large tracts of the world. This income deflation, brought about by the imposition of neoliberal policies, compressed demand and kept food and other commodity prices in check. But over the longer term, income deflation has undermined the very viability of peasant agriculture, adversely affecting supply.