New Delhi: Professor Arun Kumar delivered a critique of capitalism, finance-led growth and rising inequality at a national seminar organised by the Centre for Study and Research, Delhi. The seminar focused on the theme “Discouraging Debt and Encouraging Equity: Rethinking Development Financing.” Professor Kumar argued the growing dominance of debt and finance flows from the inherent logic of capitalism itself.
Tracing economic evolution, Professor Kumar described feudalism as characterised by usury, high interest rates and bonded labour. Capitalism emerged as a response to these rigidities but developed its own contradictions. In early capitalism, savings led to investment. With monetisation, this relationship reversed, with investment driving savings.
Drawing on John Maynard Keynes, he explained money acts as a bridge between present and future, introducing uncertainty and risk. Without central planning, individual capitalists act on divergent expectations, resulting in business cycles and recurring crises.
Professor Kumar highlighted the conflict between capital and labour. Profits are generated by suppressing wages, he said, and this antagonism persists. Finance has expanded beyond productive activity and acquired autonomy from the real economy. Global financial transactions now far exceed actual economic output, allowing finance capital to dominate production.
He cited the 2007-09 global financial crisis, triggered by subprime lending and shadow banking. Governments rescued financial institutions rather than productive sectors, reinforcing “too big to fail” entities and fuelling public anger.
The global financial architecture, characterised by tax havens and capital flight, strengthens finance capital while weakening states. This erodes labour’s bargaining power through unemployment and fragmentation, intensifying inequality. Capitalism increasingly relies on market-friendly state intervention, resulting in crony capitalism and authoritarian tendencies.
Professor Kumar warned artificial intelligence poses an unprecedented crisis for capitalism. Unlike earlier technologies, AI threatens skilled and mental labour, potentially leading to widespread unemployment. Universal Basic Income undermines work dignity and offers no lasting solution.
He concluded capitalism inherently promotes debt while constraining meaningful state intervention. Rising inequality, weakened democracy and growing individualisation erode collective resistance. Genuine change requires public consciousness, collective action and fundamental rethinking of the economic system.
Dr Mohammad Rizwan, CSR Director, highlighted the organisation’s role and objectives. Scholars presented papers on equity-based financing, household indebtedness, debt analysis in India’s budget and external loans in South Asia. Dr Waqar Anwar presented concluding remarks.
