Conference Background

Everyone from politicians and bureaucrats to academics like using references to “market mechanisms” and “market solutions” as if these concepts were in some way ideologically apolitical. The market is only one of many human institutions that have been formed throughout the course of human history, only afterwards to have to go through a process of continual reinvention in order to adapt to shifting conditions. Markets have been there for a very long time, but as Karl Marx pointed out, capitalism is what normalised them to the point that they are nearly everywhere you look. It is time, however, to deconstruct false ideas as part of the process of identifying new institutions and, eventually, a better system. This will help us get closer to achieving our goals. Because of this, we will be able to get closer to the target that we have established for ourselves. This is due to the fact that the obstacles that capitalism must overcome are only going to get more difficult as time goes on.

In 1942, Joseph Schumpeter published Capitalism, Socialism, and Democracy, a book that may still be read now. It was composed during the Great Depression, fascism and nazism’s early achievements in 1940 and 1941, and in a context of an uncertain future. Schumpeter prophesied that socialism would rise and capitalism fall. He believed democracy under socialism would be as difficult as under capitalism. The book’s 1946 second edition’s last chapter considered the political and economic scenario after the war and Schumpeter argued that we should not associate the future of socialism with that of the Soviet Union, since what we had witnessed in the first three decades of Soviet existence was not a necessary manifestation of socialism.

We believe that the main reason advocated by Schumpeter for the decline of capitalism and the rise of socialism was the growing importance of modern corporations in respect of the individual firms prevailing in the first stages of capitalism. This trend, by involving an increasing bureaucratisation and monopoly power of the big firms, marked a strong deviation from the (only partly true as also at that time public intervention played a significant role) “more competitive” setting of the early capitalism. From these aspects will follow, in Schumpeter’s analysis, an irreversible trend towards socialism. However, as in the second post war period, capitalism seemed not show any evident sign of decline but rather appeared, despite its various contradictions, to be growing without problems. Schumpeter’s book was easily forgotten or, at best, considered as an interesting but unrealistic hypothesis. To this situation, some unclear aspects of his analysis may also have played a role. In particular, it is rather unclear why the rise of modern corporation should lead automatically to socialism and not, as actually took place, to some form of mixed economy. Relatedly, in his analysis of socialism and democracy the adoption of a top-down approach ― in the sense that he considered socialism mainly in its centralised version and democracy mainly as a competition for leadership ― does not allow a fuller appraisal of the role that other forms of socialism and democracy can play in realising the objective of human development and social justice.

In fact, the book is controversial: while some researchers believe that Schumpeter’s analysis gives adequate evidence for a counterargument to the liberal thesis, which expects the universal development of individualism, market economy, and democratic forms of governance, others argue that, rather than being a market-based theory of party rivalry, Shumpeter’s theory of democracy is a theory of strong leadership.

However, despite the limitations, we think that the enduring relevance of Schumpeter’s analysis lies in grasping the evolution of modern economic systems, from the individual capitalism to the managed/concerted economies of our time. These economies are characterised by the rise not only of big corporations but also by a growing importance of public action in trying to manage the contradictions of the system.

In this respect, Schumpeter’s analysis, in casting light on a central aspect of our economies, presents interesting parallels with various contributions that, from different but complementary perspectives, analyse the mixed economies of our time.

Particularly relevant is, among others, John R.Commons’s analysis (1934) of the evolution of capitalism, also developed during the Great Depression, where he identified three stages:

(i) The period of scarcity, in which there was “the minimum of individual liberty and the maximum of communistic, feudalistic or governmental control through physical coercion”, which broadly corresponds to merchant capitalism – broadly from the XVI century up to the industrial revolution.

(ii) The period of abundance, characterised by the “a maximum of individual liberty, the minimum of coercive control through government”, which corresponds to the “unlimited growth” of the industrial revolution.

(iii) A period of stabilisation, characterised by a “diminution of individual liberty, enforced in part by governmental sanctions, but mainly by economic sanctions through concerted action, whether secret, semi-open, open, arbitrational, of associations, corporations, unions, and other collective movements of manufacturers, merchants, labourers, farmers and bankers.”

Other interesting contributions that pinpoint the contradictions of contemporary capitalism can be found in Rudolf Hilferding’s analysis of the concerted capitalism and its relevance for the maintenance of big economic interests, as well as in Karl Polanyi’s “Double Movement”. Moreover, it is worth remembering that the Veblen-Dewey-Ayres’ tradition of pragmatism and institutional economics. In this light, beyond the analysis of the central dichotomy between ceremonial and instrumental value, this tradition highlights that the reality of concerted or managed capitalism of today is not perfect competition but “corporate planning” through which corporations try to orient policies to their advantage (Dugger, 1988), while the other forms of capitalism are considered totalitarian and democratic planning.

In order to cast a better light on the complex reality of our uncertain times, we invite contributions that develop relevant issues addressed by Schumpeter’s “Capitalism, Socialism and Democracy”, also by considering other related insights from institutional economics, theories of socialism and social justice.

With the intention of fostering a pluralist and interdisciplinary range of theoretical perspectives and methodological frameworks, the primary objective of this conference is to facilitate a comprehensive discussion on the contemporary state of capitalism and its potential trajectory in the future. The aim is to call for a reflection about the complex and uncertain trajectories of our economic, political, and social landscapes subsequent to the 2008 financial crisis, the COVID-19 pandemic, and the ongoing armed conflicts.


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