On 13th March 2025, CESS-DGS hosted a lecture on “Democracy and Capitalism – The Changing Dynamics.” The event was welcomed by Dr. Alivelu Kasturi, Dean, DGS, and the lecture was delivered by Prof. Chandrahas Deshpande, Professor of Economics at Welingkar Institute of Management Development and Research, Mumbai.
Prof. Deshpande emphasized that liberal democracy is one of the most widely accepted political systems today, especially post-World War II. While systems such as monarchy, dictatorship, and authoritarianism still exist in some countries, liberal democracy has become the dominant model in most prosperous nations. However, this does not mean it is free from challenges. The lecture examined the strengths and issues associated with democracy and its relationship with capitalism.
Capitalism, which has evolved over centuries, was significantly challenged by Karl Marx’s critique, leading to the rise of socialism and communism in various parts of the world. However, after the collapse of the Soviet Union and China’s shift towards a market-driven economy despite its non-democratic framework, capitalism has remained the prevailing economic system globally. Even in China, economic operations are increasingly based on private enterprises, with multinational corporations successfully running businesses for decades.
Renowned economists like Nobel laureate Joseph E. Stiglitz have critically examined the current state of capitalism. While it remains the dominant economic model, concerns persist regarding its exclusivity and whether it truly serves all social groups. One major critique is whether capitalism is creating an economic divide by making markets less accessible to a significant portion of the population. This perspective aligns with the argument that there are now multiple forms of capitalism, especially post-1980, when global economic structures underwent major transformations.
A key example discussed was China’s transition from a state-owned economy to one driven by multinational corporations in the 1980s, a shift that contributed to its rapid economic growth. Unlike India, which had long-standing private enterprises like Tata and Birla, China historically lacked a private business tradition but quickly embraced foreign direct investment (FDI) and multinational corporations to boost its economy. Today, nearly 40-45% of global FDI is driven by multinational companies, influencing trade policies, market strategies, and even technological advancements in sectors such as healthcare and media.
The lecture also touched upon the increasing influence of technology giants and their economic power, which in some cases surpasses the GDP of entire nations. The discussions referenced Nobel laureate Daron Acemoglu’s book “Power and Progress,” which argues that technology should serve societal well-being rather than being controlled by a few powerful corporations and governments. Similarly, Martin Wolf’s book “The Crisis of Democratic Capitalism” was cited, highlighting that liberal democracy thrives when combined with market capitalism, yet faces challenges such as protectionism, nationalism, socio-economic exclusion, media influence, and the growing financialization of capitalism.
The lecture concluded with an engaging discussion, followed by a vote of thanks, leaving attendees with thought-provoking insights into the evolving dynamics between democracy and capitalism in the modern world.