A Fragile Alliance
New Horizons in Institutional and Evolutionary Economics series
Chapter 8: Democracy at bay
In Joseph Schumpeter (1942, p. 61), a fundamental question is asked: ‘Can capitalism survive?’ His answer was: ‘No, I do not think it can’. As we know now, this answer did not prove to be true. Yet, maybe the question should have been formulated differently: can democracy survive? This formulation shifts the problem to a different playing field. The relationship between globalization and democracy is at stake, and no longer only the internal dynamics of the capitalist system, as in the works of Schumpeter. Globalization of markets implies that national governments have less say concerning the organization of their own economies. This development does not necessarily mean that the democratic control of market processes is moved to the background, but the danger is not unreal. For, exercising control at a global scale requires tailor-made political institutions. However the chance that such institutions will emerge and satisfy the requirements as well, does not seem great momentarily.
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