New “Discoveries” of Don Quixote de la Patna, Ajay Sinha, and the ‘Truthseekers’!
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Kavita Krishnapallavi ===============
————————————————- Our good old Don Quixote de la Patna has made some new revelations! He argues that prices of edible oils in India increase in the following fashion: First, international prices rise and then the government whispers in the ears of monopolies that now you can “jack up” the prices!
Second, the monopolies after getting this information from the government, “jack up” the prices;
Third, then the prices are “jacked up” by domestic monopolies even higher than the international prices;
Fourth, subsequently, the government indulges in the game of appearances by reducing import duties;
Fifth, but when the import duties are reduced, the international monopolies again “jack up” prices so that the reduction in import duties does not make any difference!
Sixth, finally the prices of edible oils and similarly all food items keep increasing continuously!
Such can be the “logic” of a JACK-ASS!
Let us see, how Ajay Sinha has again revealed his utter inability to understand how capitalist economy works. First of all, when the international prices of an item, which is predominantly imported, increase, the monopolies do not need the Modi government to first whisper in their ears that now they can “jack up” prices! The impact of increase in the prices of edible oils in international markets will directly affect the prices of edible oils in India, 70 percent of which is imported. Even a school student of economics understands that.
Secondly, there will be a time-lag in this impact to take place. Again, this is something that every student of political economy understands. All such processes unfold spatially with a time-lag. Marx has explained this time and again in ‘Capital’.
Thirdly, the prices will not increase simply in accordance with the increase in the prices in international market, because the element of speculation will come into play, especially in countries where the commodity in question is largely imported. Speculative manipulations of prices happen in all countries, but they are particularly higher in countries which are major importers of the commodity in question. In my previous post, I presented a quote of Marx, where Marx is precisely explaining this.
That is why, first the prices of the commodity in question will not increase proportionately to the increase in international prices. However, once they start increasing, the speculative manipulations by rich farmers, traders and monopolists will cause the prices to overshoot, especially in countries that are import-dependent.
This is not simply a conspiracy of the government and monopolies. Though monopolies do conspire for a variety of purposes, their conspiracies cannot become a success at their will. They cannot control the motion of capitalist economy at will, rather they are regulated by the laws of capital. There are certain structural laws that determine the relative success or failure of the steps of all individual capitals, including monopolists.
What imbeciles like Ajay Sinha and ‘The Truth’/’Yathaarth’ brigade are preaching, is a kind of ‘CONSPIRACY THEORY OF MONOPOLIES’ straight out of a populist Hollywood movie, where an evil corporation (ADANI!) controls the government and rules over everything and is omnipotent and omnipresent! In this narrative, monopolies and their subservient governments collude to control everything! They are all powerful, and now the laws of motion of capital do not determine their activities, rather the monopolies cause the laws of motion of capital to cease to function! Ajay Sinha and ‘The Truth’/’Yathaarth’ brigade of bumbleheads believe in this non-sense.
However, the actual capitalist economy functions in a way quite different from the apocalyptic imaginations of such idiots about monopolies. Let us see how Ajay Sinha is again slowly changing his positions again, though only to formulate even more idiotic positions!
Earlier, Ajay Sinha argued that reduction of import duties are a fiscal drama which are not at all effective! Now, plagiarizing from our last post, he has changed his argument in a dishonest fashion. Now he is saying that since the monopolies in international market will “jack up” the prices even more if the government of a country reduces import duties, therefore, the reduction in import duties will not be effective in the end! Even this changed argument is ridiculous. Let us see the inanity of such an argument.
First of all, international edible oils market is hardly monopolized, so that one or few monopolies cannot increase prices at their will. If we look at the market shares in international market of edible oils, we find that companies like Nisshin Oilio Group, COFCO Group, California Rice Bran Oil Company, Bunge Ltd., Mazola Oils, Cargill, Adani and Wilmar, etc. have comparable market shares which continuously fluctuates with different topper every year; no single company or trust is in a position to impose any monopoly price or even speculate at will! Even their speculations are regulated by competition in the international market itself as well as the particular relation of supply and demand. In conditions of under-supply of edible oils, all of them engage in speculative manipulations for some time, but not according to their whims and fancies. As we saw in our last post, no speculative manipulation of prices can be a long-term phenomenon, for the reasons that Marx explained in ‘Capital’ as well as ‘Theories of Surplus-Value’, namely, it is precisely the speculative increase in prices of commodities that eliminate this speculative increase for a variety of reasons: decline in effective demand, expansion of production and flow of capital to these sectors and consequently, increase of supply till it matches or surpasses effective demand, which, under certain conditions can even increase effective demand, so on and so forth. However, our idiots of ‘The Truth’/’Yathaarth’ brigade do not even understand something as elementary as this!
Secondly, even if international market of edible oils become monopolized tomorrow, the international monopolies are more interested in what is known as “dumping” markets of countries with cheap commodities. In other words, the main concern of international monopolies is not to hike prices to counter reduction in import-duties, which, anyway, is a stupid argument, but to dump the markets of other countries with cheapest possible commodities and that is why they oppose protective tariffs. It is precisely through this dumping, that the international monopolies try to destroy local capitalist producers and refiners.
Thirdly, international monopolies have no reason to respond to the reduction of import-duties in one country! In fact, they favour this reduction in import-duties in all countries. Why? Every student of even elementary school economics knows the answer: because all monopolies are against the protectionist tariffs; they want all forms of protectionism gone, which are introduced by governments especially in the so-called ‘Third World’ countries or what we can call relatively less-developed capitalist countries, to protect their domestic companies, including domestic monopolies. That is why, the reduction in import-duties is a welcome step for international monopolies. In fact, they have been demanding such reduction for a long time now and this is one of the core elements of neoliberal globalization!
Fourth, not only monopolies involve in speculative increases in prices whenever there is price volatility due to supply and demand disequilibrium, but even rich farmers and kulaks also “jack up” prices, something which our jack-asses, the “Truthseekers”, don’t understand or pretend not to understand, because they have to fulfill their role as the running errand boys and flunkeys of kulaks and rich capitalist farmers! We have seen how oilseed farmers are selling oilseeds at speculative prices in the markets, which are almost double of the declared MSP. WHY DOES NOT THE KULAKPHILE BRIGADE OF ‘TRUTHSEEKERS’ EVER MENTION THESE RICH CAPITALIST FARMERS AND KULAKS AMONG THOSE WHO ARE SPECULATIVELY INCREASING PRICES OF EDIBLE OILS? Read these news reports to know more on how rich farmers and Kulaks have been selling oilseeds at exorbitantly at higher prices-
As you can see, first of all, our Don Quixote de la Patna does not understand the difference between monopoly-prices and speculative prices. The first emanates from the monopoly position of a company in an industry and is not based on temporary under-supply; it is speculative prices that are based on temporary dislocations in supply and demand, which leads to price-volatility, which is increased even more by the speculation that it triggers.
Secondly, Ajay Sinha fails to understand the speculative rise in prices is not a conspiracy of monopolies and government who arbitrarily increase prices at will! It is a market-process in which various capitals engage competitively! The speculative increase in prices happens under certain laws of capitalist production and they are cause of their own elimination too. As Marx pointed out, the speculative increase in prices are precisely the reason why such speculative prices are eliminated, that is, they are the cause of their destruction too. They cannot be introduced or maintained at will by the capitalists, including monopolies, as imbeciles like Ajay Sinha think.
Third, Ajay Sinha, by sleight of hand accepts that speculative prices will remain only till there is an imbalance between supply and demand! Again, our Maatsaab is plagiarizing and presenting this plagiarized argument as his own argument! Earlier, these speculative rise in prices were presented by Ajay Sinha, as a conspiracy “in the darkest hours” done by monopolists who subjectively and at will, “jack up” the prices! Now, he says that these speculative rise are conditioned on the under-supply of the commodity in question! The only thing this idiot with “jacked up” ego does not understand that even in conditions of under-supply, the speculative manipulations in prices are not arbitrary and unregulated or based on the flights of imaginations of the monopolists! They are regulated by competition and changed conditions of supply due to hoarding, and the resultant changes in effective demand.
Another stupid argument of Ajay Sinha is that the import of Indonesian and Malaysian edible oils, through Nepal proves that what we had been told earlier that the price increase is due to increased demand and decreased supply was a farce! HOW INANE THIS GUY CAN GET? No, Mr. Bumblehead! This kind of circumventing the protective tariffs is done by all exporters of all commodities in the entire world! There is nothing new in this! Read this news report from 2 years ago when the domestic edible oil producers were asking for curbs on imports from Nepal! https://www.financialexpress.com/…/curb…/1580535/
Moreover, It happens even in times when there is no speculative frenzy. Nepal has long been a way for not only exporters of edible oils, but exporters of various commodities, to avoid protective tariffs of India. Why the SEAI is opposing this? For the same reason SEAI is opposing reduction of import duties! For the reason that cheap exports will destroy the less cost-effective edible oil industry of India! What cannot Ajay Sinha understand in this simple affair is beyond us! Now, he is trying to misinterpret every news item in order to prove his idiotic arguments! And this is only landing him in even more trouble. One thing is clear: this guy does not learn from past! Import duties still decrease prices. If the international prices increase faster than the reduction in import duties, obviously, ultimate result will be increase in prices. However, these prices would have been even higher, had not the import duties been reduced! Again, a simple mathematical thing that Ajay Sinha does not understand: since taxes are added over and above the price of commodity, any tax/duty will increase the prices! Really! What cannot he understand is beyond us!
Moreover, we can also clearly see that there is no internal cohesiveness and coherence in all the illogical arguments propagated by Ajay Sinha and “Truthseekers” ilk. At least some amount of congruence is warranted in illogical arguments too, isn’t it? First, this dimwit has said that International monopolies “jack up” the prices in international markets then he also goes on to say that these monopolies will come to India and “jack up” the prices further and they will compete with Indian monopolies in this way! What a silly argument is that? Market competition is not about selling at higher prices, but inundating markets with cheaper commodities to crush competition from domestic players. However, by now readers, too, must have understood that expecting this kind of elementary understanding from this bunch of dunderheads is, in fact, too much to ask!
Such are the inanities being thrown at serious readers by the “jacked up” idiots of ‘The Truth’/’Yathaarth’ brigade. We would like to caution every serious reader again: BEWARE OF ‘THE TRUTH’/’YATHAARTH’ BRIGADE OF IMBECILES! THEY ARE A MANUFACTORY OF IGNORANCE!