The political economy: A varied landscape Interventions in political economy

Author - Muzaffar assadi

Publisher - Kalpaz publications

Price:  Rs 850

This collection of academic essays takes a dive into micro-economics and discusses unique problems of major world economies with regard to factors like population growth, average age, industrial growth, writes GAUTAM MUKHERJEE

This is a slim, variegated, and academic volume, of 13 macro-economic essays, broadly classified under the moniker of the political economy. It has been written by an assembly of distinguished professors from Mysore University, in the main, with others from abroad, and an industry voice or two to join the chorus.

The editor, Prof Muzaffar Assadi, PhD from JNU and post-doctorate from the University of Chicago, briefly sets the tone by recounting the development of theory on the Political Economy, beginning with Adam Smith and John Stuart Mill, through the unavoidable Karl Marx, and on to distinguished 21st century ethnic Indian thinkers like Amartya Sen and PN Bhagwathi. The essays in this book include one from Prof Kishore Kulkarni PhD from the Metropolitan State University of Denver, Colorado which argues that “Policy effectiveness is better explained when interest rate is treated as a reflection of money supply change rather than as an instrument to make the change in money supply”. Kulkarni implies that the recent US macro situation with regard to small hikes in interest rates is a post facto acknowledgement of improving money supply, rather than an agent provocateur to make it happen.

However, it will be remembered that under President George W Bush, post 2008, and much of both terms of Barack Obama, US interest rates were kept at near zero, and combined with huge stimulus packages to keep the US economy from collapsing into a 1930s-style Great Depression. Another, on export decision making by the small scale industry, comes from Dr Younos Alroaia, Islamic Azad Industry, Semnan, Iran. He picks on the small scale industry in Iran because it has become a major source of employment and is a growth driver of exports. This may well have parallels in India. Reflective of this, in the Indian stock market, it is small and midcap stocks that are much in demand. Dr Younos quotes 2004-2005 figures to cite 23 per cent of the total exports emanating from the small-scale sector, along with 20 per cent of total manufacturing output, 35 per cent of indirect investment, 18.4 per cent of value-addition, and 4 per cent creation of fresh employment.

In Iran, largely dependent on its oil exports, small-scale industry accounts for over 80 per cent of its entire industrial sector. Dr Alroaia demonstrates a strong preference for “the Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) developed by Hwang & Yoon in 1981 for solving Multiple -Attribute Decision Making (MADM) problems with a finite number of solutions”. And to improve matters, there are, inevitably, multiple variables to consider. Prof. Assadi also writes on the Political Economy of Climate Change. He calls it “the child of science”, implying that it is both the problem and the solution, with large implications for politics. “Societies,” says Assadi, “will not survive unless and until capitalism is not disciplined, commoditisation of environment is not contained, and consumption is not restricted”.

Infosys Ltd Lead Data Scientist Dr Vinay M R has written on Innovative Business Solutions using Big Data Analytics. It is used to analyse Retail Customer Behaviour. He analyses a Switzerland-based multinational (14 countries), client’s experience. The company is in e-commerce via an online retail platform, publishing of  newspapers/magazines, digital newspapers, web property, online ticketing, mobile platforms and Apps, TV and radio stations and so on. The Infosys worked mining of data threw up, amongst other things, significant customer profiling, identified 14 opportunity areas for potential increase in sales/revenue/profitability, and new monetisation possibilities across business lines. This last, using both available and potential data that Infosys could take on another contract for.

Is there a direct connection between financial liberalisation and industrial growth in India? Dr Niranjan R of Vijayanagara Sri Krishnadevaraya University, Ballari, Karnataka, says yes. Dr Niranjan’s exploration suggests that “controlling for other variables, the integration of financial systems promotes growth of all industries regardless of their characteristics”. Does a financial analysis of public, private and foreign banks in India reveal a particular advantage for any one category? Seyed Mehdi Pourkiaei and Prof S Mahendra Kumar of the Department of Economics & Cooperation, University of Mysore, say yes and no. Each has its advantages and there is room for improvement all around. But yes, the comparative performance of Foreign Banks is better than that of both Private and Public Sector Unit (PSU) Banks.

When we are headed towards becoming the most populous country in the world by 2030, the question of “International Labour Migration” is of particular interest. Professor HR Uma of the University of Mysore and Madhu S, Research Scholar, explore this matter. Some countries with the opposite problem are beginning to invest in skilling Indian labour already.

There is a mismatch between countries with nil or declining population growth and ageing populations, and India with its much vaunted demographic dividend. Some 65 per cent of its people are already under 35, and will be 30 going forward. The world, on its part, is realising that ‘sustainable development’ must recognise the positive contribution of migrants, and move towards international cooperation in this regard. This thought provoking volume has essays on a number of other issues such as the viability of rainfed sericulture, the renaissance and revival of languishing industry in the States of the Indian Union with special reference to Karnataka, Voluntary Retirement Schemes (VRS), and the gaps/lacunae in official Statistics Systems. It is dedicated, touchingly, in a Goodbye Mr Chips way, to recently retired Mysore University Professor Hosamane, who was also a distinguished banker and is clearly a mentor to many of the contributors in this book.

The reviewer is an entrepreneur and former corporate executive