edmund wilson, to the finland station

(6): for Michelet, Vico as the originator of "historical principle" -- pattern in dev. of societies

(7): in Vico, the "organic character" of human society, the principle of "humanity creating itself"

(9): Vico had no conception of progress--a serieis of repetitive cycles. But Michelet, of course, had the Revolution.

(10): 1830 was a setback for Michelet, as the liberal bourgeoisie sold out to the Orleanists

(12) : Michelet presents his history in relation to a social and economic context

(13): approach was entirely 'rational' -- that is, anti-clerical and democratic

(19): important--Michelet alive to the "internal antithesis" of the revolution, between class solidarity and patriotic duty

(20): the principal actor, for Michelet, as the people

(28): construction of a 'usable history'

(30): important--of course, utopian to the point of being petty-bourgeois: in response to the vivid antagonisms of class society, Michelet's is that "we must have love."

(31): man seen as an 'accessory' to his position

(33): 1870-1871, France has ten million industrial workers and twenty-six million peasants

(34): Michelet's special version of nationalism in which the nation is identified with the Fr. revolutionary tradition

(37): key--with Renan, 'revolution' was coming to connote working-class interference from below in bourgeois society. this is the beginning of the decline, in that sense.

(41): Fr. bourgeois intellectual in 1870 belonged to a victorious class and a defeated nation

(45): Renan focuses on ideas -- human history is background

(58): Taine is taking us toward naturalism, away from revolutionary enthusiasm

(54-55): again--because of the socialist specter, anxieties about his understanding of the Fr. Rev.

(62): Anatole Fr. represents the revolutionary tradition in full disintegration

(64): Michelet gets a sense of solidarity from the Rev; for Frnace, abysses of doubt and despair loom large

(72-73): Babeuf had rallied around the radical elements of the Rev, after Thermidor. founded The Society of Equals.

(75): int--the people had had enough of the Jacobins--the poor were no longer ready to fight (a realism and sobriety suggestive of later phases of socialism) .

(75): Babeuf's defense as a summing-up of the unrealized ideas of the Enlightenment

(77): Rousseau--'men so odious has to dare to have more than enough while other men are dying of hunger'

(80): important--Babeuf as Fr. Revolution's last hurrah. the utopian socialists of the next century belong to a very different world.

(80): Saint Simon -- 'monseiur le comte! Remember you have great things to do!'

(82): key--Saint-Simon as offering a critique of the liberal Enlightenment, which had bestowed complete freedom on the individual, not understanding that it apprehended him only in the abstract (i.e., outside of the laws of society, of social development)

(83): Saint-Simon's vision was to have three classes (governing was to be done by those who could work for the State without pay)

(84): four great division of the world--rest would be protectorates

(84): whole message, in short, is "his peculiar version of the principle of noblesse oblige"

(90): key--both Fourier and Owen based themselves on a doctrine of Rousseau's that was in the air of the time--the idea that mankind is naturally good, and only institutions have perverted it.

(92): Owen as Henry Ford

(95): Owen, 1817 -- discovering the 'class interests' of the elite

(97): Owen had very little sympathy with the Chartists and the Corn Law agitation

(99): Enfantin becomes Christ!

(101): key -- none of these idealists understood the real mechanisms of social change, nor could they forsee the development/dynamics of the system they hated. This is what socialism meant, when it began to be current in France and England circa 1835.

(103): Comte as disciple of Saint-Simon

(120): int--the 'self-determination' of Kant as the intellectual reflection of the Fr. Rev on the German bourgeoisie -- the 'will' in Kant as a purely ideological determination and moral postulate, no influence on actual society

(121): key, Hegel -- there was a revolutionary principle in Hegel, who had himself been swept up by the Fr. Revolution until he became a Prussian professor. Young Hegelians saw no reason that these processes should be suddenly arrested?

(124): Marx pens wood-gathering essay, at 24 -- already demonstrating a concern for material context, Wilson suggests

(126-127): the critique of Feuerbach, who produces a substitute religion (love) and thinks in terms of an abstract humanity. Marx's task is to dispense of religion altogether, and place man in society. problems which had given rise to religion could only be solved by concrete man in society.

(137): the whole tradition Wilson is discussing, he wants to say, is reacitng to a kind of 'anti-social egoism'

(141): from Hegel they have taken a principle of historical change, but discarded the role of Heroes (even though, even for Hegel, these Heroes are only the expression of larger historical forces)

(143): from Saint-Simon they understand modern politics as science of regulated production; from Fourier the arraignment of the bourgeois as betraying the Englightenment; from Owen the realization that the factory system must be the root of the social revolution.

(144): through Dezamy and List they get a sense of the class struggle--the former had critized Cabet for believing that the bourgeoisie would come to the aid of Labor

(145): already by 1843 (Critique of the Hegelian Philosophy of Law) Marx has postulated the proletariat as playing the new Hegelian role in effecting the emancipation of Germany

(148): Engels' reflections on being a bourgeois and communist at the same time ('if only one doesn't write!') -- spot on!

(154): Proudhon's warning to Marx, as he writes about desire to establish a new system--potential "leaders of a new intolerance"

(154): this is what led Marx to attack Proudhon's book with ferocity--sees "Property is theft" as presupposing real rights in property (Abstract Man, who had concealed the petty bourgeois; Proudhon declared strikes as crimes against the necessities of the established order)

(155): key--1845 as the first discussion with Marx of the theory of historical materialism, the preliminary emergence of a complete and coherent theory

(158): against moralism

(163): hilarious and telling interaction between Heine (intellectual) and Weitling (communist tailor), illustrating the difficulty of getting German intellectuals to make links to the working-class

(164): Proudhon and Weitling were thinkers from the lower classes, unlike Marx and Engels

(166-167): the actual fight, Marx vs. Weitling, at League of the Just -- scientific doctrine vs. utopian socialism, which resulted in the first Marxist party purge

(169): Gottschalk's scathing attack on the doctrinaire character of Marx and Engels -- "The distress of the workers, the hunger of the poor, have only a scientific... interest for them. Why should we, men of the proletariat, spill our blood for this?"

(170): Marx on trial, foreman thanks him for an extremely informative speech!

(172): the Marxist conception of peasant conservatism -- father has won property from the nobility, and can't stomach the thought of another revolution against property (because he is unable to understand as yet that the new bankers are dispossessing him, in their own way) [but what is the claim, here? a capacity (to change society) argument? ok, but requires further thought. a propensity (to band together) argument? demands severe qualification]

(174): Engels runs into his dad while he's trying to arm workers!

(176): Jenny doing recitations for Marx's lectures

(179): good point that materialism does not mean something extremely simple: that men always act from motives of economic interest [we do have to unpack how to reconcile historical materialism from both directions -- ec. interest angle, and man-in-society angle]

(188): on Luther--"He emancipated the body from chains, because he laid chains upon the heart."

(192): Dialectic as a religious myth

(194-195): [these are odd pages -- why read inevitability as anything more than polemic?]

(196): imp, pointing out the philosophical trap of materialism -- trying to give historical materialism intellectual foundation independent of the earthly conditions that have stimulated certain men to build it.

(198-199): 18th Brumaire -- seeing through the 'shadow-play' of politics to the real conflicts at the heart of social life

(201): key--the firest of '48 had ebbed, by 1850 a new period of prosperity had commenced. [there is a link, here, to the fundamental question of whether crises generate revolution, and what exactly the details of this relationship are]

(202): Marx/Engels vs. Wilich, in the Communist League -- question of the place of 'will' in political strategy. Marx transfers the headquarters to Cologne, to win the battle

(202-203): in 1855, Marx proclaims the beginning of the English Revolution, at a protest over Sunday ban on liquor

(209): fox-hunting as 'the real school for cavalry'!

(212): question of whether learning was simply functional for them -- Wilson believes no (he says it was for Lenin; M+E were men of the Enlightenment)

(214): communist vision had renaissance man at its heart

(216-217): death of Marx's children

(224):1850s were terrible, for Marx. exile at its lowest point

(225-226): internationalism vs. nationalism -- backing the 'advanced' over the 'non-advanced'. M+E support for the unification of Germ; an egregious 1851 letter from Engels, re: Poland

(236): German 'liberal reform' had very quickly gone backwards after '48, with universal suffrage very soon becoming graded suffrage according to income

(237): Lasalle had started to talk in Marxist terms, trying to make it practical (Wilson accuses M+E of being excessive and fastidious, here)

(243): Lasalle on the State -- saw it not so much as the instrument of a dominating class, but also as a 'moral whole', a sum of education/power/freedom that was unattainable for a simple combination of individuals. this, Wilson suggests, is behind is relationship with Bismarck in the early 1860s (till 1864, when Bismarck no longer needs Lasalle)

(251): Engels happy at industrial crisis

(256): imp, First International is founded in 1864 -- the workers' movement had been reviving, after the reaction of a decade (the 1850s)

(259): Marx gives his first address, which was a tricky balancing act between English trade unionists, Proudhonists, etc., etc.

(260): offers an immiseration type thesis, even in the 1860s

(260): by the end of the 1860s, has 800,000 members

(261): 1869 congress is 'captured' by Bakunin

(263): imp, Bakunin as a revolutionist of the will/act, upheaval as a historical necessity that didn't need strategy/plan [almost of the Holloway type]

(265): Bakunin in prison for eight years after '48

(267-268): Bakunin had wisened to the flaws of the patriotic insurrections (namely, their failure to tackle the social question)

(269): Marx vs. Bakunin on the 'right of inheritance' , in 1869(Marx opposed to making it an issue, in effect, because it was derivative). Bakunin's motion carries, Marx didn't attend

(271): Nechaev and Bakunin wrote together about the revolutionary--only one idea, the revolution, must be ready to dismiss all other sentiments, etc.

(272): imp, the vision of the vanguard is stripped of all social/political content, until it becomes divorced from the proletariat/people -- the former's job is only to destroy.

(275): Bakunin had been speaking of anarchism, sine 1866

(276): Bakunin expelled, 1872

(276): Paris Commune, though, had had the effect of encouraging their program

(277): imp, the 'readiness' argument -- Bakunin vs. Marx on the need to wait for social conditions to ripen

(277): now headquarters are transferred to NY

(278): Bakunin's telling impatience on his death bed-- disappointed that the masses did not want to become impassioned for their own emancipation

(279): key--Commune as a pivotal event, the "first great justification" of Marx's theory.

(281): more people killed/imprisoned/exiled in one week, in Terror of 1871, than in three years of the revolutionary Terror of Robespierre

(281-282): Commune as vindication of Blanqui and Bakunin?

(282): Engels, in 1891, calls the Commune example of 'Dictatorship of the Proletariat'

(283): why!?--[again, Wilson mistakes mysticism for politics]

(287): bad account of DK -- saying it derives from laws of human selfishness, which is emphatically NOT the case.

(291): Fabians had a different theory of value, dependent on demand

(294): claim of political bias in LTV

(298): on Marxism and Human Nature -- mischaracterizing the argument, though

(299, 300): bad--intentionally making the account, re: morality, mystical

(308): on crisis and factory shut-down -- "capital... drags with it into its grave the corpses of its slaves..."

(315): a thoroughly elitist, silly objection: the proletariat are not well-educated, how can we expect them to take over? [this comes up again]

(316): what!?--US as a genuine social democracy!?

(319): Marx was incapable of imagining democracy, certainly democratization to the extent that it's proceeded, today [this is a fair point]

(320): in 1872, Marx mentioned that it may be possible to make a revolution by peaceful means in dem. countries

(324): 1870 war, Lasalleans voted for war credits, Liebknecht and Bebel refrained

(326): socialism --> communism claim made in the Gotha program, 1874

(331): 1889, founding of the Second Internatoinl

(338): Eleanor commits suicide, as do Paul and Laura Lafargue

(343): it's once Alexander II comes to power (revolt of peasantry, agitation of nobility) that Marx and Engels begin to consider possibility of revolution in Russia

(344): the 1881 letter to Zazulich comes only after several drafts

(344): DK was published in 1868 in Russia, to Marx's surprise

(352): Lenin's father dies in 1886, after the period of reaction has settled in (following Alexander II's assassination in 1881)

(353-355): Alexander murdered, heart-breaking story re: Lenin's mother (finds out about it in the newspaper) and liberal friends' betrayals

(357): imp, Russian liberalism, in short, ran into the shoals of the 1880s. Subversive possibilities of peasantry, to which People's Will had been atttached, had gone down with the rise in the price of grain.

(358): Alexander had read Marx, but had thought it would be impossible to agitate amongst the w-class until the Tsarist regime had been done away with. But Lenin was coming of age at a time when the industrial dev. of Russia was beginning, at pace.

(363): Marxism in Russia being spurred along by the success of the SPD in Germany

(367): [Wilson invokes German blood to describe Lenin!]

(373): inkstands of milk and bread, in prison

(376): 1897-1900 was Lenin's Siberian exile

(379): Lenin on Beethoven -- 'I know nothing that is greater than the Apassionata; I'd like to listen to it every day... But I can't listen to music too often. It...makes you want to say stupid nice things and stroke the heads of people who could create such beauty while living in this vile hell. And now you mustn't stroke anyone's head--you might get your hand bitten off. You have to to hit them on the head, without any mercy, although our ideal is not to use force against anyone. Hm, hm, our duty is infernally hard."

(380): imp -- truth as something practical, testable; our knowledge of the world is relative, but always approaching an absolute through our work in the world

(381): Lenin not a theorist, according to Wilson. at the very least, theory subordinated to practical activity

(382): 1895, Lafargue was saying no one understood Marx in W. Europe; Bernstein proves this in 1898, by formulating 'revolution-through-evolution'

(386): Lenin became dictator not b/c of personality (no ambition, etc.) but because of 'social physics' [this term remains black-boxed in Wilson, though]

(390): importance of understanding WITBD as written in the context of a dictatorship, where democracy in party was completely impossible

(403): Trotsky also compelled to move towards Marxism, away from populism, by the force of events -- workers' agitation in 1896 and industrial development in the Ukraine

(406): Trotsky in Siberian exile from Jan 1898 to Aug 1902

(409): why Lenin and Krupskaya decided to have no children -- family could only have hampered them in their line of duty

(412): Trotsky as Engels/Lasalle, Marx as Lenin

(413-414): 1905, Trotsky as revolution's most important public figure

(419): imp--reasons for its failure, in 1905, was the Tsar's ability to control the fighting forces, b/c of predominance of a loyal peasantry in the army/navy

(420): Engels, in 1847 Principles of Communism, had already noted the impossibility of building socialism in one country

(422): Trotsky as an individual that was made by the context around him -- men of first rank who flourish inside a school

(426): isolation as Trotsky's fate, except for short-lived moments of exceptional prominence

(429): History as teleological for Trotsky [but come on, again misunderstanding polemics]

(430-431): imp discussion--Martov's prescient opposition to Bolshevik takeover [conditions are not ripe yet, etc.? but then what do you do--let the bourgeoisie run the country to the dogs?]

(432): Trotsky on morality--a thoroughgoing instrumentalism [which seems basically correct]

(438): nationalist complement to Bernstein's revisionism

(438): remember that Engels had been pro-war, in case of attack by Russia (though he had thought that the revolution would come before the war)

(439): fate of Lenin's brother and family had left Lenin with a lifelong bitterness for the cowardice of liberals

(440): hating on Plekhanov and Kautsky, after they've turned

(442): Lenin on executions (who's asking? those who sent 16 million to their graves?)

(445): Feb 1912, Lena goldfields, marks the uptick in struggle that will lead, eventually, to 1917

(447): official Bolshevik-Menshevik split isn't until 1912, remember

(458): Pravda before April, in Stalin and Kamenev's hands, had been vacillating and conciliatory re: Prov. Government

(490): Wilson's elitism, again -- proletariat can't govern like the bourgeoisie can, b/c of comparative lack of education

The government budgetary borrowings from the central bank – reported to have shot up to just below Rs170 billion at the start of this month – to finance its budget are a major contributor to the surge in inflationary pressures in the economy because these contribute to growth of reserve money, which rose by 4.25 per cent year-on-year until September 3 from three per cent a year earlier.

Banks provide farm loans to about 1.4 million growers or one fifth of an estimated seven million potential borrowers. “Most of small and medium-sized growers have no access to agricultural loans and they borrow from informal sources,” said the head of an agricultural credit of a large local bank. Farmers estimate cumulative annual demand for crop and agricultural development loans at Rs2000 billion whereas banks’ lending remains below Rs300 billion. “Filling in this gap is a long-term policy issue... The federal government has set a target of 25 million tonnes wheat production this year and officials say that plans for free distribution of wheat and gram seeds are on the cards.

Cotton crop takes at lest 60 days to mature after the application of fertiliser. That means the crop would mature in the second week of November – the most propitious time for wheat sowing. Its picking would take another 10 to 15 days, and then soil preparation for wheat another week or so. The sowing might thus be delayed till mid- and even late-December, which, by no means, is desirable: after November 20, each day costs the farmer about 10 kilograms in yield. The factors forcing Punjab to save cotton as much as it can are truly compelling. The loss of every million bales deprives the rural economy of around Rs32 billion, increasing poverty correspondingly. It forces the textile industry to import the same quantity at the cost of very precious foreign exchange. Since 60 per cent of exports depend on cotton, it is wise to save it to the last boll. But, the provincial government also needs to ensure that food safety is not compromised next year. The huge carry-over stocks (about six million tons at present) do provide it huge space for manoeuvering. But it maintained the stocks at a massive cost – around Rs2.5 billion in per month interest payments to banks on a loan of over Rs200 billion. The ambitious package would cost the provincial government around Rs10 billion – an amount that it neither has nor can generate from its own sources.The province was able to grow around 18 million tons of wheat only when the Punjab government launched one billion rupees wheat maximisation programme, and literally focused all its financial, human and infrastructural resources on it. For the last two years, it has not only abolished the plan, but also was “relatively ignoring” the crop because of huge stocks that it could not clear from the 2007-08 yield. It reduced production last year by at least two million tons.

Most of the inundated farmlands are much below the level of Indus bank and the floodwater is facing difficulty in receding into the river. It will take months for the agriculture lands to become ready for cultivation. According to reports, on an average 4-5 feet water is still standing in the farmlands, spread over a large area. No effort is being made by the irrigation department for draining out the floodwater from farm fields. Lack of machinery, manpower, and finances have been underlined as major causes for it. Agriculture lands in Shikarpur, Jacobabad, Kashmore, Larkana, Shahdadkot, Thatta and parts of Dadu districts have been hit by the deluge. I don’t see any chance of the Rabi crops being planted this year, at least in these districts,” Secretary Agriculture Sindh Agha Jan Akhtar said.

The KP uses about 1.9 million acres for wheat cultivation. The provincial seeds industry provides 10 per cent of the total wheat seeds requirement of 80,000 metric tons to farmers.
This year the demand for wheat seed has increased. In the past, 70 per cent of the KP farmers used their own stock while the rest bought seeds. Now as floods have destroyed wheat stocks in Charasadda, Nowshera and the DIK and Lakki Marwat, the government will have to provide seeds to more farmers.

The yards had handled 86 ships with 778,598 light tonnage displacement (LDT) during the 2008-09 fiscal and the number rose to 107 ships having 852,022 LDT during 2009-10, giving something to cheer for the ship-breakers who had been under severe strain in preceding years.

Last year, wheat was cultivated on 2.7 million acres because of an attractive support price of Rs950 per 40kg. Growers in Jacobabad, Kashmore, Qambar-Shahdadkot, Larkana districts, who used to produce gram, got interested in growing wheat. Even katcha area has been producing wheat, sugarcane, cotton and paddy. Sindh Chamber of Agriculture president Dr Nadeem Qamar is hopeful about wheat cultivation on the left bank, provided irrigation department officials work effectively to provide water on time. He, however, sees no chances of Rabi crop on Indus right bank area. “The area is completely devastated by floods. I see no future for Rabi crop for our right bank counterparts,” he said.

The International Labour Organisation estimates that 5.3 million jobs may have been lost or affected by devastations caused by the floods. It emphasises that labour-intensive job creation programmes are urgently needed to lift millions of people out of poverty. The ILO has also offered to assist families and communities in rehabilitation and rebuilding.

The FBR’s high-ups want complete monopoly over tax collection—sharing it with provinces will deprive them of unlimited powers and speed money. They insist on uniform reformed GST implementation with one collecting authority at federal level “to avoid complications”. They want it not for avoiding any complications but for self-aggrandisement.

The impact of the downturn, however, has not been even. While Lahore and Karachi have seen vacancy rates hover between 40 and 50 per cent during the year 2010, Islamabad has seen vacancies reach only 10 per cent, largely due to a higher incidence of recession-proof government clients. Property values have fallen across Islamabad and Karachi but not Lahore. Most observers, including those at BMI have been unable to explain the phenomenon.

The government’s domestic net financing needs will increase after the floods and about Rs2 trillion ($23.28 billion) in treasury bills will need to be rolled over this fiscal year, the IMF said, while private demand will soften and undermine the already weak recovery in private sector growth. “The SBP (State Bank of Pakistan) is facing a difficult balancing act,” the IMF said.

Fauji Cement’s profit plummeted 75 per cent to Rs250 million for fiscal year 2010 compared with last year’s Rs1 billion. “The company’s fall in net profit was mainly due to a three per cent decline in cement dispatches and 26 per cent lower selling prices year-on-year,” said senior research analyst Sana Abdullah at IGI Securities.The complete sector has felt the heat as giants Lucky Cement and DG Khan Cement reported a fall in profits by 31 and 55 per cent, respectively, during the same period.

The country has been supported by the overseas Pakistanis who sent record amount of $8.9 billion last year and remitted record amount during July-August of the current year. The country received $933 million in August and $1.724 billion during July-August which was 13 per cent higher than last year.

When asked why was the government not asking international lending institutions to write off their loans, Ms Khar claimed it was not an easy decision because of its long-term repercussions. She said the move would make the country a pariah state.

National Assembly was informed Thursday that PSDP may be cut by 30% to 50% in view of recent floods to divert resources for rehabilitation and reconstruction of affected areas.

A few years ago a man committed suicide in Karachi after being hounded by a recovery team for defaulting on a Rs250,000 loan. The ensuing outrage caused the SBP to caution banks from employing hostile tactics when recovering loans. It is a sad reflection on society when defaulters of small loans are hunted down, while the multi-million rupee loans of the well-connected are written off.

Consumers have yet to see any respite in prices of essential items after Eid as rates of some items, especially vegetables have climbed to an all time high. The government, which is now more engaged in post-flood situation, besides striving hard to save the current setup, has not taken any serious measures to contain food inflation. For instance, the wholesale rate of sugar, after reaching the peak of Rs78 per kg ahead of Eid, has now come down to Rs76.50 per kg...

A report in this newspaper yesterday suggests the defence budget has been quietly hiked by an astonishing 25 per cent, from the budgeted figure of Rs442bn to over Rs550bn. As usual, neither the government nor the military has seen fit to divulge any details, making it difficult to comment on the need for such an extraordinary increase. A few comparisons may put the figure of Rs110bn in the proper perspective. Rs110bn is close to half the amount public-sector enterprises rack up in losses each year — a key area of reform and restructuring that the international financial institutions have been emphasising. Rs110bn exceeds the entire gains that the reformed General Sales Tax is expected to make. The sum is also roughly equal to the amount which would be raised by the controversial ‘flood tax’ that has been mooted. One single head of expenditure, then, is already set to absorb all the revenue gains that are expected to be made this year — even before those gains are realised. Surely, the public is owed an explanation.

The share of tax revenues distributed to provinces rose significantly in 2010-11 under NFC and since spending responsibilities have not yet been transferred, the federal budget expected provinces to save most of the additional funds and run surpluses this fiscal year.
Nevertheless, subsidy needs for the electricity sector are to be determined and will likely to exceed the Rs30 billion or 0.2 per cent of GDP, provided in the budget. The report also showed concern that new ‘circular debt’ in the energy sector continues to accumulate. . Initial estimates from the State Bank put loan losses related to floods at about Rs54 billion, of which Rs34 billion are loans to agriculture.Although significant, this is unlikely to materially affect the banking system as total private sector loans amount to close Rs3 trillion.

Services sector posted a deficit of $567 million in July-August of current fiscal year as compared to $481 million in corresponding period of last fiscal year, depicting an increase of 17.87 percent or $86 million. Export of Services trade mounted by 5 percent or $27 million to $589 million in first two months of current fiscal year relative to $562 million in same period of last fiscal year. Similarly, imports under services sector registered an increase of 11 percent due to high payments on account of transportation, travel services, insurance, technical fee, royalties and government sector. Services sector imports stood at $1.156 billion in July-August of fiscal year 2010-11 as compared to $1.043 billion in corresponding period of fiscal year 2009-10, depicting an increase of $113 million.

The foreign investors have repatriated over 100 million dollars abroad on account of profit and dividend, despite slackness in the Pakistan's economy and global economic recession. However, repatriated amount during the first two months of the current fiscal year is some 3.4 percent lower than the repatriation in the same period of the last fiscal year 2010.The central bank on Friday revealed that country has attracted 171.4 million dollars foreign direct investment (FDI) in July-August of current fiscal year related to 344.5 million dollars in the same period of fiscal year 2010. Foreign investors have repatriated 85.7 million dollars on account of return on FDI in the first two months of the current fiscal year over the 90.8 million dollars in the same period of the last fiscal year, depicting a decline of 14 percent. While, during the period return on foreign private investment has posted an increase of 12 percent or 1.6 million dollars to 15.2 million dollars from 13.2 million dollars. Only 8 sectors out of some 36 sectors, showed increase in the repatriation of profit, while remaining all sectors depicting downward trend. Beverages, Textile, Fertiliser and personal services are leading sector, where from not a penny has sent abroad by the foreign investors. The major repatriation has registered from the power sector, where from foreign investors has repatriated 47 million dollars in July-August of fiscal year 2010-2011 over the repatriation of 34 million dollars in corresponding period of the last fiscal year, depicting an increase of 38 percent. It may be mentioned here that the government of Pakistan has allowed a 100 percent repatriation of profit to the foreign investors. Therefore, foreign investors are fully enjoying the government's policy by transferring their profit back since 2004.

Mohsin said the country could take a full advantage of the present energy limitations in Bangladesh and serious wage hike in China, as few international buyers have started turning faces to Pakistan, now. "Pakistan should reap the full benefit of this situation and increase exports to improve trade deficit," he urged the government. With a firm belief, he said advantage of VAT imposition was almost negligible as compared to huge export loss. He urged the government to revisit its decision on VAT imposition to save the export industry from a possible collapse.

Despite a short fall of about 1.5 million tons in rice production due to devastating floods, Pakistan will be able to export rice worth $2 billion during FY 2010-2011. Former Chairman Rice Exporters Association of Pakistan (Reap) and a prominent rice exporter, Azhar Akhtar, told Business Recorder on Saturday that Pakistan has about 0.8 million tons of milled rice worth $800 millions as a carryover of the previous crop. He said the demand of Pakistan's superior quality basmati rice is picking up in the international market at a rate of $1050 to $1100 per ton. Akhtar said though the unprecedented floods have damaged rice over 7,08,000 hectares area out of the total of 2.64 million hectors, especially in Sindh, yet Pakistan is likely to produce about 5 millions tons of basmati and other rice varieties this season against the target of 6 million tons of rice. The country consumes about 2.2 million tons annually and exports the surplus quantity of rice.

The Inter-national Monetary Fund (IMF) has observed that the government of Pakistan is spending $2 billion a year on subsidising power, and urged it to reform the power sector so that support is directed at the poor and the needy, and not in an untargeted fashion.

The 10 percent income tax surcharge is estimated to generate additional revenue of around Rs 55 billion. According to sources, it is expected that the government may issue ordinance for imposition of 1.5 percent flood disaster duty on non-essential imports. The duty is estimated to generate additional revenue of Rs 11 billion for the flood affected population of the country.

steinmetz, epistemological unconscious

(111-118): "methodological positivism"

1. ontological assumptions about nature of social reality--empiricism, which is claim that there is no difference between essence and phenomenon. cause and effect at the level of events.
   
2. epistemological precepts concerning way in which facts can be known--positivism, presupposing the invariance of empirical relationships;
   
3. scientistic-naturalist belief in unity of natural and social sciences--militating against recognition of concept-, time-, and space-dependence of social structures and practices (embodied by idea that you consider social facts as 'things')
   
4. assumptions concerning social science methodology-quantitative methods,e tc.

(117, 136, 152): danger of collapsing into particularism, in his call for concept-, time-, and space-dependence ('Hindu categories') and the call to bring back 'meaning' into science/analysis. on p. 136, he speaks of a rejection of multiple causal mechanisms...

(118): absurdity of ASR example

(120, 140): American sociology as epistemically unsettled until 1945 (question of how you measure this--it can be entirely self-confirming, unless you ask this). on p.140 he is being very definite with his periodization--surely this degree of correspondence is ambitious, at the very least.

(124): need to make epochal distinctions within capitalist modernity -- fine, but why 'discrete', epochal distinctions of the sort posited by regulation theory?

(127): why positivism after WWII? association of anti-science irrationalism with Nazism and totalitarianism

(128-131): important--but really, it was because:

1. the sense that economic crises were over--the economy was stable [but this is not the same thing as a sense of economic stasis; or at least, it need not be--this said, to me it is the most plausible of his points]
2. homogenization of consumer-citizens (so no need to think about the specificity of individual consumers, everyone was 'the same')
3. synchronization of scale of activities within the nation-state [this is more difficult--how is the argument about equality across the nation-space borne out? and what is the alleged mechanism: active State intervention in pursuit of this goal? ]

(132): collapse triggered by disappearance of "social regularities" (this is not direct--'methodological positivism' is not displaced, but its hegemony becomes progressively more uncertain). here he lists different challenges, though this is hardly very interesting.

(137): 'domestication' as too simple a notion

(140): anti-systemic movements, Vietnam war, etc., all had effects. the collapse of "patterned regularities" [but here you're starting to assert that you were no longer working with capitalism, for a time, almost. anyway, worth unpacking. too cryptic with his claims. substantiate, for me, the argument that development was more uneven, etc. here's relying on a 'common sense' to make a commonsense-style conclusion]

(145): critique of path-dependence, via a critique of normal/deviant paths. [but this is going too far]

(156): why did post-Fordism do the opposite to economics? surely there's something else to be unpacked.

- - - - - -

1. Major issue with regulation periodization. Why discrete? Isn't the 'rise and fall' of regulated epochs just a proxy of class struggle; otherwise the claims seem exceedingly mystical. In other words, the transition/turn is , rather then explained

anwar shaikh, adam smith (lecture 02 – 09/07)

different questions of equilibrium ('turbulent regulation'), looking at industrial production index

1. growth is the normal state

2. growth is exponential (linear on a log scale)

3. growth is turbulent, too. the line is fluctuating

neoclassical economics does real violence to this graph and the trends it depicts.

then looking at US real investment index, which appears only more turbulent. “investment is more volatile than output” (based on looking further ahead, making a guess re: further prospects for profit—not simply prospects re: demand, as Keynesians would argue)

then looking at US real GNP per capita—the system has grown roughly ten fold in these terms. which is a feature, clearly, of productivity growth.

all this is built into the classical vision of political economy.

(for neoclassicals, growth occurs on a 'balanced growth model' – the premise is a static framework, in which growth enters as an 'addition' to the story)

fluctuations around an anticipated trend are called the 'business cycle'

looking at a business cycle graph—the first major depression was in the 1840s, setting the context for the revolutions of 1848; you also have a boom with the mexican war, and (dampened) boom with the civil war, WWI.

using the graph to draw the distinction between 'recurrence' and 'steady cycle' – booms give way to busts, and busts give way to booms. there is an already-discussed phenomenon of overshooting equilibrium, and then falling behind it, etc., etc.

(for neoclassicals, the mismatch between producer expectations and consumer preferences is assumed away, via perfect knowledge. the most sophisticated math cannot show stability—it can only make the assumption that equilibrium exists, and even then this entails its own assumptions. a lousy answer to a lousy question.)

- - - - - - - - -

how did the classical economists try to understand capitalism, given that they did not suffer from these sanitizing assumptions? they saw fluctuations and growth—this was Smith's premises.

not sanitizing, but analyzing.

Smith begins by arguing that “wealth of nations comes from labor which they apply to production.” (Chp 1, p. 1). annual labor is the fund which provides the nation with necessities and conveniences.

(for neoclassicals, its capital and labor—but, for classicals, capital is 'past labor'. labor is the active element. this is the sense in which Smith makes this claim).

Smith then goes on to say that not all labor is 'production labor' (“productive labor” is the term Smith uses—we will use 'production' vs. 'non-production' to remove the connotations of 'productive' vs. 'non-productive'). Smith mentions lords/king/army all as 'non-production' activities, not because they're worthless/'bad' but because it's defined on the basis of its 'effects.' in short, not defined on the basis of worth or even social necessity, but on the basis of its producing effects.

implication of this, of course, relates to social reproduction. production labor produces a certain amount—part of this goes to its own reproduction, and the remainder is a surplus product. this surplus product not only has to support re-investment, but has to support the king, the judiciary, the educational system, the army, the police, etc. the spending on non-productive activities can inhibit the growth of the economy (the means of violence, etc.--on this point of view, military activities may pump up demand, but they're also parasitic in this sense)

(for modern economics, anything supported by the market qualifies as productive. a Japanese minister made a claim about 'unproductive labor' and security in the USA)

given that production labor is the fund for new wealth, it's obvious that if you could increase the productivity of labor, you'd get more with the same labor. for Smith, the central factor in increasing productivity is the division of labor ('greatest source of increase in productivity')

comes, of course, from the natural propensity to 'truck, barter, etc.' this is 'mythic anthropology', and neo-classical economics will pick up on this part of Smith, in particular. (remember--one of the most elaborate form of the division of labor is a caste system; not driven by a caste system, but by social hierarchy. or gender, which also is not a choice; socially imposed. the idea that the division of labor may make you more productive is fine, but it should not excuse the mythic anthropology here).

in short: the social division of labor as voluntary choices made by free and equal human beings.

the division of labor leads to divisions in abilities—not due to inheritance, but due to training. Smith is clear that these are not natural traits, but socially given. (this is an important counter-point to conservative mythologies re: Smith)

also, the division of labor is limited by the extent of the market. how much can you increase the division of labor? well, if there's a limit to how many pins you can sell, so there's no point to try and make production more efficient. Smith is not very clear whether this is the pin market, or the aggregate market.

money, for Smith, arises from the division of labor—to facilitate the exchanges to which it gives rise. that special commodity which gets picked in the course of the development of exchange to facilitate the transactions (different times/places pick different commodities—furs were quite common, salt, tobacco, etc.).

value—Smith says that we want to distinguish between two different definitions. one is 'value-in-use'--the utility of some particular object. the other is 'value-in-exchange'--the quantity of other goods you can get for your particular object.

the former is about its usefulness, the latter concerns its exchange ratio

the world 'utility' for Smith does not mean what it means for 'neo-classicals.' today it means 'subjective satisfaction.' no way to compare across people—a psychological reaction to a commodity, or a thing. for Smith it simply means 'usefulness'--Smith says that air, for example, has great utility. doesn't want to confuse it with 'desirability.'

'value-in-exchange' is mediated by money, of course. if exchange rates are mediated by money, then you have 'price.' Smith's concern is to explain the laws of money price.

on the surface, the market price seems to be the issue. but classical economists thought that was trivial—we're looking for a central regulating mechanism. underneath the demand and supply is there a regular center of gravity to which price is attracted.

for Smith, that regulative principle is the amount of labor expended in the production of that commodity. next time we will pick this argument up.

isaac ilych rubin, a history of economic thought (1929)

part III: adam smith

(153): birth of classical school circa 1750 as science of industrial capitalism (this was their watchword and 'cause')

(155): seeing subordination of crafstman, rise of the putter-out and buyer-up. in short, the birth of the manufactory (1600s/1700s)

(156): important--but, at the end of the 1700s, the domestic system still competes with the manufactories (because they had not yet systematically begun to implement mechanization), and the former still had the advantage of no fixed-capital costs, and workers could have subsidiary income. more co-existence, than 'elimination'

(157-158): the manufactory did, however, signify the appearence of industrial capitalism and formaiton of an industrial proletariat, though it retained continuities with handicrafts in terms of technology

1. division of society into capitalists and laborers
2. comination of production based on division of labor

(160-161): protectionism/guilds were unable to stand in its way

(164): scotland was relatively advanced, economically, in the mid-18th century

(166): smith wasn't at all absent from the great practical debates of his day (rubin emphasizes this--mercantilists had been practitioners of economics, not theoreticians), even as he could be considered the forerunner of economics as a theoretical discipline. [he inveighed against protectionism, for example]

(167): importance of natural right to his doctrine (his moral doctrine, but also his economics)

(167-169): imp, natural right re: economics--economic progress will assert itself due to capitalist man being written in to the nature of things. Quesnay had a different conception, for which institutions were very important. but Smith was infused with optimism of his liberalism, in this sense. (this is the bedrock of Brenner's critique of neo-smithian marxists, remember)

(170): for Smith, economic intercourse is intercourse between commodity-owners. exchange, in short.

(171): an obvious tautology--Smith attributes to abstract man motives and aspirations that are in fact the result of institutions and history; he uses the motives and aspirations to 'prove' the necessity of these same institutions.

(173): Smith's optimism, for all his reservations, makes him the father of economic liberalism (ie, no state interference in ec. policy, free trade). but Rubin is arguing that this could only be unproblematic in the period of the 'revolutionary bourgeoisie'--his aim was not to defend the interests of capitalists.

(178): smith's assertion that division of labour is main source of productivity puts him squarely in the manufactory period.

(179-181): important--smith misses the distinction between the social division of labour (between occupations) and the technical divison of labour (within a firm). this represents a failure to distinguish between an economy of simple commodity exchange, and a capitalist economy.

(179): Rubin here speaks about two features of the classical school

1. not understanding the social forms of division of labour, because you are concerned with its material-technical aspects.
2. individuals enjoy a harmony of interests--spinner and weaver complement each other.
   

(181-182): apprehending the social division of labour did allow Smith to see our mutual interdependence, which was a 'great service'

(183): against mercantilists, Smith understood that money was merely a facilitator--it did not represent value, itself

(186-196): in short, Smith arrives at two conceptions of value. Rubin has a very lengthy argument re: why, having to do with Smith's 'methodological dualism'. but the main point is simple--this confusion is masked Smith is looking at a simple commodity economy; but when he looks at capitalism, he is unable to understand the 'exchange' of non-equivalents between capitalist and worker.

1. quantity of labour expended on production
2. quantity of labour which a given commodity can acquire or purchasee.
   

(198-201): important, Smith made a serious advance over the Physiocrats re: the concept of social classes, replacing a concpetion rooted in a conceptual division based on 'branches of industry' with a conceptual division based on revenue (profit, wages, and land rent). this meant he took a major step towards formulating the problem of surplus value, viz-a-viz the mercantilists (for whom it was commercial profit), and the physiocrats (for whom it was rooted in the nat. properties of the land)

(202): Smith 's picture of primitive accumulation is very benign; opposite of Marx's. root of capital is relative 'parsimony'

(202-204): important, Smith recognizes labour as the source of value of the product, which would mean wages is deduction. BUT he can't carry this through to its conclusion--he confuses 'theory of distribution' with 'theory of value', and begins to deduce value from profit/wages/rent. in other words, he starts with an understanding that profits and wages are exclusive, but then arrives at a position that sees higher profits mean more value.

(203-204): Smith's theory of general accumulation--doesn't accept the 'iron law of wages'/instead a confused position on the 'wage fund', Rubin is arguing. marked by an optimism about rising workers' wages, in contrast to Ricardo.

(206): unions not useful--for Rubin, this is because he predates the union movement

(209): theory of capital, 'private economy' (a private house rented out is capital) + 'national economy' (total productive stock in economy). BUT, according to Rubin, Smith is unable to reconcile these two definitions because of baseline confusions in his theory of surplus value.

(210-212): leaves out 'circulating capital' in his discussion of total reproduction (as does Ricardo, as does Say, as does Mill)

(214-215): Smith also misunderstands the distinction between unproductive and productive labour--for Rubin (Marx), it is about the relation of the labour to the production/expansion of surplus-value; for Smith, it is about the creation of a material object.

anwar shaikh, why classical political economy (lecture 01 - 08/30)

classical economists asked this question: how can we have patterns of recurrence? how can g. depressions recur?

the surprising answer, though, is that capitalism does not work through individuals' intentions. it runs 'behind their backs.'

the market possesses powerful internal structural patterns that emerge from the centrality of the 'profit motive'

what happened in the 1930's?

the system broke because the profit motive led it to that outcome.

the key point is that the classical tradition sees the system in these terms, in terms of a pattern (boom + bust)

classical economists do not mean the same thing as the modern orthodox economists by 'equilibrium'. they see boombs past it, and busts below it--whereas the orthodoxy is content to understand the economy at equilibrium.

neo-classical position--the idea is that equilibrium is a state of rest ("attained and held state"). a gravitational attractor. you're entitled to view equilibrium as a pretty good approximator of reality (analogy to a pendulum)

classical position--the equilibrium point is itself not fixed, and the system can itself move around it. we want to talk about equilibrium points, then, but as 'turbulent regulation.' order in and through disorder. the pattern occurs through overshooting and undershooting.

- - - - - -

what is it specifically about classical economists that distinguishes them from neo-classicals?

neo-classicals

1. self-interest as the primary human motive--rational economic man makes all decisions.
   
2. utility maximization--not just as a principle for understanding firm-level decisions, but also as a principle of behavior
3. firms are price-takers, they all take a common price. competition forces firms to produce at a common price (a competitive economy)
4. profits, wages, and technology is all equal between firms. everything is studied at equilibrium.
   
5. full employment is a stable and regular outcome. if there's unemployment, wages will be bid down, and workers will be hired (unemployment is a feature of government intervention, distortions, etc.) [remember, neo-classicals aren't worried about demand]

keynes and post-keynes

arose in a post-depression context. central argument is that economy can get stuck in a state of persistent unemployment, if there's a lack of demand. unemployment, in other words, is a feasible equilibrium state.

in this context you need the state. the state becomes an important complement to the market. to 'push' it up to a full employment state of existence, which can be a 'higher-level' equilibrium

classical

the inventors of modern economics, and in search of a deeper answer to these questions. unemployment, for example, can be sustained easily, if there aren't profits to be made.

you can't re-open factories if private profit is the dominant law, even if it's socially desirable.

a better understanding of the world we live in is offered by the classicals.

key features of classical political economy

1. economic acts are embedded in a social context. not abstract agents/firms, but embedded (this opens up possibility of thinking about race, gender, etc.)
2. focus is on industrial capitalism (not merchang capitalism, etc.)
3. emphasis is on the 'laws of motion'--patterns produced by capitalism. system is always 'changing and moving'
4. emphasis is also on competition, which has its own hierarchies and forms (amongst workers, between nations. the dominant form is between firms)
5. order in and through disorder
6. expansion and growth are inherent. the system is always moving.
   
7. incentive to mechanize is inherent in the system
8. conflict between private aims/incentives and social goals.
   
9. the state now appears in a very different light, as compared to both the neo-classical and keynesian models. classical economists are more likely to see the State as a State of the 'system.' a conflict between the profit motive and State intervention.
   

the main point--the purpose of the course is not to study dead economists, but about an alternative vision of the system we (today) inhabit.

sugata bose, peasant labor and colonial capital

(2): concern with change/continuity of forms of labor extraction, together with obvious change at the level of the larger economy

(4-5): shift emphasis away from bhadralok to labour

(5): "from about 1820 rural India became subject to the influence... of a wider capitalist economy..."

chapter 1--demography

(9): population as independent or dependent variable?

(12): W. Bengal delta moribund, E. Bengal delta fertile

(12): jute from the 1870s

(13): areas with highest density of roads/railways showed highest incidence of malaria

(14): three demographic cycles (rough):

1. 1770-1860: shared in all-India trend of population increase
2. 1860-1920: W. Bengal stagnant, E. Bengal secular rise in population, area cultivated
3. 1920-1990: population rose, but relatively stagnant productivity
   

(16): neo-Malthusian position would have tough time making sense of these demographic cycles

(16): discussion of roughly Marxist approach to deficit/surplus population in rural areas--useful (absolute deficit population, relative deficit population, absolute surplus population)

(17-18): famine of 1770 not a Malthusian event--there was a relative deficit of labour. entry of Company's government as a buyer of grain contributed to inflationary pressures. revenue collection went up.

(20): review of cross-India population trends

(21): post-1770, population increase did not match output b/c:

1. high revenue demand
2. general malaise in the grain market

(22): discussion of increasing land-population ratio in the 1800s. this may have encouraged some turn to intensive, cash-crop cultivation. but noting that this was also forced (in the case of indigo)

(23): dominant relations of surplus appropriation were revenue (to the State) and rent (to the zamindar) [until now the discussion has remained 'outside' of social relations of production]

(24-25): 1860-1920, recurring pattern of malaria epidemics in W. Bengal kept population levels depressed (declining population per square mile ratios, in parts). mortality highest amongst the poor.

(27): 1860-1920, E. Bengal saved from population crunch by switch to intensive cultivation and by out-migration to Assam

(29): 1920-1970, defined by declining output in the context of an absolute surplus population

(32): 1943 famine--record harvest, "entitlement failures" rather than a problem of food availability.

(32): in this period, demographic pressures did not work to spur increases in technological productivity

(34): close analysis of population-production linkage undermines Malthusian naysayers (since population pressures can induce innovation, though they didn't do this consistently)

(34, 36-37): 'high fertility regime' in the context of absolute surplus population is best understood as a poor peasant survival strategy

(35): in short, cautioning against a Malhthusian techno-determinism or demographic determinism--only saw correlation between population and production in 1770-1860, and even that doesn't tell us about causation. (1) especially after 1820s, agrarian reality was shaped by the market (not by population, production autonomously); (2) evidence also indicates that innovation was blocked by social and political institutions, even as it might have been encouraged by demographic pressures

chapter 2--commercialization and colonialism

(39): against Alavi's treatment of this as a separate mode of production--want to consider 'articulations,' instead

(41-42): imp, no easy typology of what happens to agrarian relations under capitalism; both progression and retrogression. (1) commercialization associated with increased accumulation--plantation agriculture, etc. (tea plantations in Darjeeling and Jalpaiguri); (2) subsistence commercialization, poor peasants seeking out cash crops (jute in E. Bengal); (3) dependent commercialization, foreign merchant capital which brings agricultural production under its sway but "stops short of capitalist accumulation and consolidation of land" (indigo production in W. Bengal)

(48): bonded labor, indebtedness, and indigo production

(49-51): effect of 1840s depression on India taking a severe toll on the indigo-based economy of Bengal

(52): the rise of the railways had an inflationary effect on prices (wages jumped too, but this didn't help the smallholders). this set the context for a revolt against indigo planting in the 1860s (and the end of 'dependent commercialization', he's suggesting)

(52-55): imp, expansion of jute production in Bengal, from the 1850s to the 1930s (tea was also important in value terms--but for the vast majority, jute was what affected them the most). it was part of a subsistence strategy for poor peasants, which left them very vulnerable to market fluctuations--80% of cultivators grew equivalent of 2 acres!

(57): after 1906, credit entered in a major way, in effort to guarantee procurement stability

(59): even rice was heavily exchanged, even if not imported/exported--44% of the crop, in 1941

(59): growth of agricultural income had been sluggish around the turn of the century (but, those who had opted for jute were 'substantially' better off).

(60): WWI "broke the idyll", but recovery after 1922

Cotton production has declined by 22.95 percent as the arrival recorded at ginneries as on September 1 stood at 9,95,191 bales, showing a decrease of 22.95 percent over the corresponding period of the last year when ginneries received 12,91,550 bales.

At majority of the retail outlets of the city sugar was available at Rs 85 per kg, which is higher compared to its previous rate of Rs 75 per kg. Prices of fruits and vegetable remained all time high. Bananas were available at Rs 120 per dozen against its previous price of Rs 100; mango was available at Rs 90 per kg compared to Rs 70 last week. Similarly apple was available at Rs 120 compared to its previous price Rs 100 per kg and guava at Rs 90 per kg against its previous price of Rs 70. Price of tomato went up from Rs 60 per kg to Rs 80 during last week. Price of onion registered an increase of Rs 10 per kg and sold at Rs 50 per kg in contrast to last week's price of Rs 40 per kg. Similarly price of potato registered an increase of Rs 13 per kg and reached Rs 45 per kg in contrast to last week's total of Rs 32 per kg. People from all walks of life expressed serious concerns over the price hike in the kitchen commodities. They criticised the government for failing to provide relief to the poor masses and to keep check on price hike.

Reliable sources told The Express Tribune that the government has chalked out a two-tier plan to place a cut of up to Rs180 billion on federal and provincial budgets aimed at remaining within the IMF-agreed budget deficit target (a gap between the income and expenditure) of Rs685 billion or 4 per cent of the total size of the economy. According to officials, the federal government would save up to Rs90 billion by cutting the development programme and withdrawing subsidies. The plan is based on the assumption that the Federal Board of Revenue would achieve the Rs1.667 trillion tax collection target. But officials claimed that FBR has informed the government that it may miss the tax target by Rs50 billion. In that scenario, the federal government would have to look for other avenues to slash expenditures of equal amount in the wake of the worst flooding in the country’s history. The federal government has also asked the provinces to cut their annual development programmes in order to create fiscal space, necessary to adhere to the Rs685 billion fiscal deficit target for fiscal 2010-11. Officials said that now the provinces have been asked to create a fiscal space of up to Rs90 billion to remain within the overall fiscal framework.

Official statistics showed that the federal government transferred Rs633.4 billion to the provinces from July 2009 to June 2010 as their share in federal taxes under the Distribution of Revenue and Grant-Aid Amendment Order 2006. Though the transfers remained Rs22 billion short of allocations, these helped the provinces to finance 80 to 96 per cent of their budgets. The remaining financing was either received through provincial taxes, non-tax revenues, federal grants or borrowing from banks. However, the historical seventh National Finance Commission Award has changed the distribution mechanism and now other indicators like resource generation, poverty and disparity are also being considered. This has shrunk the Centre’s share from 55 to 46 per cent and will help provinces to get more resources but may lead to loss of provincial taxes due to the provincial governments’ inability to net the actual potential. Punjab’s total income, including federal share, stood at Rs401.6 billion and it incurred expenditures of Rs435.5 billion, recording a deficit of Rs33.8 billion. Sindh, the second most populated province, got Rs188.4 billion from the Centre, which was Rs5.7 billion less than allocation. Sindh was the worst performer in terms of resource mobilisation as it collected just Rs21.6 billion in taxes, the same as in 2008-09. Provincial taxes could only finance 8.6 per cent of expenditures and were less than 10 per cent of total revenues. It also puts a question mark on Sindh’s claim to collect sales tax on services, a cause of delay in implementation of reformed General Sales Tax.
Sindh’s budget deficit remained at Rs10.5 billion. Its total revenue amounted to Rs241 billion while expenses were Rs251.5 billion. Its 79 per cent budget was financed through receipt of federal taxes. The Khyber-Pakhtunkhwa government could only collect Rs2.4 billion in taxes, just Rs187 million more than fiscal year 2008-09. Its taxes could only finance 1.7 per cent of total expenditures and the government heavily relied on the Centre. The province got Rs80 billion from the federal divisible pool compared to its share of Rs85.4 billion. Its total revenue stood at Rs152.4 billion against spending of Rs142 billion, generating a surplus of Rs10.3 billion. The Balochistan government also could not mobilise provincial resources. It collected Rs1 billion in taxes, Rs167 million more than the year 2008-09. Provincial taxes helped to finance just 1.4 per cent of expenditures. Taking into account all income sources, including non-tax revenue, the provincial government could finance just 4 per cent of expenditures, depending on the federal pool for the remaining 96 per cent.

Sugar production in fiscal year 2009-10 amounted to 3.1 million tons and carryover stocks from 2009 were 500,000 tons. However, this year Pakistan does not have any carryover stocks. Average sugar production in one year has been around 3.7 million tons.

“We need to respond strongly to the crisis at hand, but we need to do it without losing sight of important economic reforms,” said Mr Zoellick while emphasising the need to continue the reforms Pakistan negotiated with the World Bank Group two years ago. Mr Strauss-Kahn went a step ahead and indicated that Pakistan had already pledged to continue those reforms. “Our dialogue with Pakistan on the current Standby Arrangement is progressing and the authorities have expressed their intention to implement measures for the completion of the fifth review of the programme later this year,” he said. "We will stay in close contact as these efforts proceed. Completion of the fifth review will allow the Fund to disburse an additional $1.7 billion, bringing total IMF disbursements (including emergency assistance) to $2.2 billion in the second half of 2010,” Mr Strauss-Kahn said. Pakistan pledged to implement tax and energy sector reforms, reduce inflation, curb budget deficit and give full autonomy to the State Bank.

Surely, the answer should be to begin to plug the loopholes in the tax system that allow people to evade taxes. Why must the already taxed be burdened some more when so many enjoy comfortable lives outside the tax net? If a 10 per cent flood surcharge on income already taxed can yield Rs100bn as estimated, then simply going after those evading the existing income taxes could yield several times that amount.

During the last fiscal year, the government made record borrowing from commercial banks as it was bound to remain within the limit while borrowing from the State Bank under an agreement with the IMF. Official data issued on Aug 31 showed that last year’s fiscal deficit was 6.3 per cent (or Rs929 billion) of Gross Domestic Product (GDP). It was much higher than 5.2 per cent (or Rs680 billion) deficit of the preceding year. One of the major reasons of massive borrowing is poor performance of economy. The government still claims that rate of growth could be around two per cent while many economists, including some government advisors, believe that the rate of economic growth would be zero per cent. Experts said inflation could be as high as 25 per cent due to disaster caused by floods. So far, the government has not borrowed from commercial banks, instead it made net retirement of Rs44.7 billion compared to Rs54.6 billion borrowed last year during the same period.

“We are in a very good position to cater demand from China, Pakistan and Bangladesh. They are in short supply and we have a bumper crop,” said Paresh Valia, an exporter based in Bhavnagar district in western Gujarat state.

“Fortunately India has five million bales of cotton surplus this year. The spinners have already confirmed orders for one million bales at $0.90-94 that have started arriving,” he added. He said there would be shortage of 2 million bales during October-March period and 2 million bales during April-September that would be covered through imports

Pakistan has only eleven helicopters for civilian needs, which is the lowest number in the region and insufficient to meet emergency needs like earthquake or floods, industry official said on Tuesday.

The devastation to roads has compounded infrastructure deficiencies of the country as the government added only 580km roads in two years (2008/10) against 5,052km roads in 2006/07 alone. Transport sector has been adversely impacted by the recent floods in Khyber-Pakhtunkhwa, Punjab and Sindh where most of the low quality roads were completely washed away or damaged. According to statistics, the development of high quality roads has been on decline since 1996/97, when 8,197km of hard-wearing roads and 3,725km of low quality roads were constructed. The new roads built during 1996/97 were 11,922km. In 2006/07 although the construction of sturdy roads was 7,470km, but the low quality types registered a decline of 2,418km as these were converted into developed roads. Due to heavily damaged road infrastructure, it is becoming exceedingly hard to transport relief goods to the flood-stricken people in far flung areas.

So far as the sources of higher profitability were concerned, this was primarily due to robust deposit growth, culminating in an increase in the earning assets, particularly investments in government securities, and wide spreads between lending and deposit rates. A sharp fall in the provisioning requirements also contributed a great deal in raising profits. Such a scenario developed because the government, in order to meet its budgetary requirements, kept borrowing heavily from commercial banks through treasury bills, while the banks found it convenient to hold risk-free earning instruments. It appears that the banks' profitability in the coming months would largely depend on two main factors, working almost in the opposite directions. A substantial increase in NPLs could be expected due to the massive floods, which have caused extensive damages, especially in the agricultural and SME sectors. This could result in higher provisioning and lower profitability. On the other hand, the government may have to increase its borrowings from the commercial banks to meet its growing needs and this could lead to higher profits. In balance, however, the banking sector of the country is expected to maintain a respectable level of profitability in the near future, without facing major hiccups.

Pakistan may miss the cotton production target by about 2.25 million bales due to devastation caused by the floods. At present, production of 11.75 million cotton bales is expected against the set target of 14 million bales for the year 2010/11, officials at Ministry of Food and Agriculture said. Cotton was sown on 3.199 million hectares, out of which cultivated area of 0.588 million hectares has been damaged.

Sources told Business Recorder here on Tuesday that the quarter-wise and monthly breakup of revenue collection target of Rs 1667 billion for 2010-11 has been issued to the Large Taxpayer Units and Regional Tax Offices incorporating amount to be collected from the services sector from second quarter of current fiscal year. The FBR has estimated to collect Rs 674.9 billion sales tax during 2010-11 taking into account the enforcement measures and potential of different sectors.

The three major car assemblers have more than 90 per cent share in local car sales. Pak Suzuki secured the highest profitability growth of 330 per cent, Indus Motor 55 per cent while Honda Atlas Car remained in the red though its losses dropped, according to the data compiled by Topline Research.

The government has deferred plans to export its surplus wheat, the minister for food and agriculture said on Monday, after devastating floods washed away grain stocks and raised concerns about the next crop. Pakistan, Asia’s third-largest wheat producer, said in April it would export 2 million tons of wheat after a bumper crop of 23.86 million tons in 2009-10, and a carryover of 4.2 million tons from the previous crop. But it held back exports because of low prices in the international market until a recent rally.