The end of grounded capitalism in European peripheral economies: can it be reground? Alternative economic policies in Europe Pavia University 24th and 25th April 2015 José Reis Faculty of Economics. University of Coimbra

1. Some references to discuss capitalism as a gounded system Alfred Marshall: "progress chiefly depends on the extent to which the strongest and not merely the highest forces of human nature can be utilized for the increase of social good" Albert Hirschman: “a moral basis of capitalist society [that can] be seen as being constantly depleted and replenished at the same time” – with an “excess of depletion over replenishment” leading to crisis, and “specific conditions” to “cohesion and legitimacy” Karl Polanyi: “an industrial society can afford to be free”; the right to “a job” at the top of the list of “new guarantees”

1. Some references to discuss capitalism as a gounded system Kenneth Arrow: economic process did not simply consist of using given resources that would eventually be exhausted in a given activity; "learning by doing”: to extend and improve own resources and increase their availability John K. Galbraith: “anything that interrupted the investment outlays (...) could cause trouble”, since “compensation through an increase in consumer spending could not automatically be expected”

2. The predominance of “financialisation” Financialisation: financial transactions and the valuation of assets decoupled from any material and productive reality A regression: the central position occupied by the productive condition and the process of “learning by doing” disconnected from the institutional, material and relational order which capitalism historically instituted

3. What exactly is capitalism? A “peace formula”, a “stable” mechanism that ensured “the mass loyalty of workers and consumers to post- war capitalism”, a “technocratic system for managing the economy”, an “economic system regulated by policy”? (Streeck) Or, capitalism as more than just a system based on the market, transactions, the private appropriation of the means of production, the wage relationship and advanced forms of technological development? – A complex social order – An institutional framework – The material and relational circumstances of capitalism

4. The conditions of a grounded capitalism a) the formation of the industrial society b) the development of a processes of “learning by doing” in labour market and productive system 3) the generation of material institutions of capitalism.

5. Industrial society In order for markets and transactions to make sense, a very concrete condition must lie at the core of an economic and social system of this type – the institution of a productive, organizational and labour sphere structured through a variety of sectors and activities and a logic that is not limited to accounting for labour costs but also includes capacity building and an income redistribution policy – The condition for an“enlarged replenishment”

6. Learning by doing The transformation of the productive process from something that merely consumes and exhausts resources or capacities in order to create outputs into something which, in addition, creates new capacities How people are incorporated into the organisational system itself – learning by doing

7. The material institutions of capitalism Key institutions of capitalism the coalesced with the development of a material order The less codified aspects which correspond to the main material frameworks for the (differentiated) organisation of industrial society, namely: a) mobility vs. links to concrete territorial contexts; b) links to professions and organisations and professional recognition; c) the relationship between the educational and the professional and social framework

8. To an open discussion on southern and peripheral economies The new and radical fracture in Europe: centers against peripheries; credit and finance vs. economic relations; the main role of a disfunctional European and Monetary Union How to rebuild a productive order, an inclusive and sustainable labour market and how to recovery institutions?