Ever since the 2008 financial crisis, the strategy of governing the macro economy primarily through the management of money and financial markets while ceding most of society’s investment to the private sector has been in retreat. Again and again, governments and central banks have aggressively intervened in the economy to backstop runs on financial institutions, prevent the collapse of various asset markets, bolster purchasing power in the economy through direct payments to citizens, maintain the solvency of intensely pandemic-disadvantaged businesses, and stimulate employment (Tooze 2018). Perhaps even more remarkably, this revival of state and fiscal intervention has not simply been an emergency response to a series of crises. The accumulation of longer term economic, social, and environmental externalities, widely believed to be generated by policies privileging private-sector investment and market freedom, also has given rise to impatience with the use of market mechanisms to achieve social goals or redress imbalances. Political demands from society have already generated moves to use the state to redistribute income, forgive specific forms of debt, restructure industry, engineer “energy transitions,” encourage investment in “green tech” and otherwise redirect investment toward ends that appear to be, or are alleged to be, in line with the will of the demos (Allen 2022, Aronoff 2019).

Dramatic in itself, this re-politicization of investment and consumption comes at a time when our confidence in the institutions of liberal democracy is being challenged. The contemporary demos, wherever it is, often feels alienated, underserved, or excluded from the institutions that are there to represent and serve it. With the pursuit of social, economic, and environmental goals intentionally displaced to the market for half a century, the non-market, deliberative, political mechanisms for the democratic transmission of citizen will into investment and consumption policies have atrophied, or, worse, become instruments of economic and social interests favored by the market (Fishkin & Forbath 2022, Philippon 2019). Core institutions in the incumbent order (parliaments, parties, corporations, markets, unions, nonprofit entities) are being attacked, their authority and effectiveness as governors of economic process delegitimized and their claim to be channelers of democratic will called into question. Many once powerful movements and organizations that traditionally represented broad social interests in macroeconomic policy formation, such as those for workers and farmers, have nearly disappeared altogether (Andrias 2016). Other crucial governance institutions that continue to exist – in particular, central banks and corporations – are being continually recomposed by new social, economic, and environmental dynamics in ways that are dramatically recasting their boundaries and forcing a reconsideration of their social roles and the way in which they formulate and pursue investment goals (Omarova 2021; Herrigel 2018, Baldwin 2016,). Old norms, such as an understanding of economic growth as an unadulterated good capable of creating social harmony and overcoming material division and conflict, are losing their appeal in the face of worsening inequality and climate crises (Daly 2007, Kallis et al 2018). To be sure, there is no shortage of new ideas about alternative social ends – involving different ways of relating to nature, to work and production, or to community life and solidarity – but the existing political economic arrangements for converting those ideas into investment seem often inadequate to the task.

We believe that this confluence of mounting state intervention into key social processes of investment and consumption combined with growing disarray and disillusionment with the incumbent political and economic institutions and organizations of will formation and governance is the defining political economic dilemma of our age. Our proposal to the Neubauer Collegium is to convene a series of workshops that gather different groupings of scholars (from an array of disciplines) to discuss the relationship between the market, the state and democracy in both historical and contemporary contexts.