This interview was conducted by Fulvia Giachetti.
The democracies born in the last century are facing a deep crisis. Rivalries among factions of transnational capital and between states are reshaping the relationship between economics and politics in chaotic and unpredictable ways. As U.S. hegemony wavers, and Europe seeks greater autonomy, nationalism and authoritarian tendencies are resurfacing. In this unsettled landscape, the Left struggles to find a common voice, while new social and cultural energies are trying to imagine a future in which freedom is no longer a privilege of the market. On these issues, Reset DOC spoke with Michele Salvati, emeritus professor of Political Economy at the University of Milan.
Today, liberal democracy appears to be in an irreversible crisis—precisely where it was born. Unable to contain unrestrained capitalism, what are the roots of this progression?
Capitalism is a revolutionary force. It does not allow itself to be halted by the limits imposed upon it, nor by national borders. During the postwar boom, a reconciliation between capitalism, democracy, and liberalism was possible: capitalism was domesticated and well-managed, both nationally and internationally. This balance made possible economic growth and technical-scientific innovation, driven by private enterprise within competitive markets; an adequate welfare state; individual freedoms and rights guaranteed by a liberal-democratic legal order; and a reduction of economic and social inequalities that were ethically indefensible.
In the 1980s, however, two decisive and interrelated processes transformed this equilibrium: the technological revolution and globalization. With them, capitalism was set free, and the compromise—not only between capital and labor, but also between capitalism and democracy—has come under increasing strain. Today, those processes continue to unfold. The postwar golden age will not return, and the “marriage” between capitalism and democracy is now at risk.
In the 1960s, you spoke of a “strike of capital.” Was that process the initial cause of the crisis in the “marriage” between capitalism and democracy?
At the time, I was referring to the Italian context, whereas today it’s a global issue. To begin with, the union between capitalism and democracy was short-lived. In its most progressive form, it existed only during the three decades following the Second World War — neither before nor after. The so-called “neoliberalism” that has accompanied globalization since the 1980s is comparable to nineteenth-century laissez-faire, despite what its theorists claim.
The crucial difference between nineteenth-century liberalism and today’s neoliberalism is that, under the latter, countries that had never previously been at the center of the system entered the global capitalist circuit.
How did this happen?
It occurred because, with globalization and the technological revolution, integrating those countries into the world market became advantageous: it provided access to an immense reserve of low-cost labor and helped curb wage growth. The so-called “strike of capital”—the reluctance of firms to invest—was a reaction to a context in which, under near full-employment conditions, labor had become “too” strong in relation to capital. It was in this situation that the doors were opened for less developed countries to enter the system.
Gradually at first, and then with increasing intensity, many previously peripheral nations became significant and politically independent actors within the global capitalist order. Some of these were states with great cultural traditions, yet profoundly different from those of the West; their entry into the world capitalist market generated extraordinary economic growth. In a historically brief span of time, several—China being the most striking example—became major capitalist powers, politically independent yet governed by regimes that were not, and are not likely to become in the foreseeable future, liberal-democratic.
Meanwhile, liberalism—once a flexible orientation compatible with diverse economic policies from one country to another—was transformed into “neoliberalism”: an extreme, universalist ideology claiming to be applicable everywhere and under all conditions. A dogma, insensitive to the variety of contexts.
Today, we are witnessing both the extreme consequences of neoliberalism and its crisis. On the international stage, this seems to be reflected in the end of the so-called “liberal order” founded on U.S. global hegemony…
The postwar “liberal order” has come to an end, and without doubt this collapse is tied to the crisis of U.S. hegemony—and, in particular, to Donald Trump’s policies. It is not true, as some have claimed, that Trump is an isolationist. On the contrary, he is pursuing extractive and predatory economic policies in an effort to preserve American global dominance. He does so by competing above all with China, the only country he truly fears. Yet, at the political level, he feels a certain admiration for Beijing. This is because Trump harbors a far more instinctive sympathy for genuine autocracies than for democracies. He thinks like an autocrat.
So, Trump is trying to preserve U.S. hegemony, yet his decisions have thrown the international order into disarray, straining relations even with the European Union. Is this, therefore, an attempt to maintain dominance without hegemony?
One could put it that way, yes—but it remains an open situation, and its outcomes are unpredictable. Moreover, some follow him without question, even in Europe, such as the Italian Prime Minister, Giorgia Meloni. Today, for example, the tension between Meloni and French President Emmanuel Macron revolves precisely around this issue. Macron hopes to establish genuine geopolitical, geoeconomic, and cultural autonomy for Europe vis-à-vis the United States—a degree of distance he considers necessary, as he sees Washington moving in a direction that is neither democratic nor liberal. Macron wishes to maintain relations with the United States but not to align himself with it ideologically, whereas Meloni does. The contest for global hegemony—not merely for global dominance—remains unresolved.
The European Union doesn’t have a unified position on this?
The European Union finds itself caught in a vice between the United States and China. It needs to loosen that grip, but has so far been unable to do so—let alone in a unified way—because it is made up of national democracies that differ greatly from one another politically, economically, and culturally.
A clear, though difficult, position on the EU’s future has been articulated by Mario Draghi. In his view, the Union can survive only by transforming itself into a genuine federation—acting as a state-power endowed with a single economic and foreign policy. This vision has been criticized by those who argue that such a move would inevitably lead to neoliberal policies, unless Europe were willing to distance itself from the Atlantic Alliance.
What do you think?
I believe it’s a risk worth taking. What would be the alternative? The status quo of multiple, divergent national policies? The refusal to make the European Union one of the major actors in a new political and geoeconomic world order? A fragmented EU, prey to internal conflicts, is precisely what the great powers governed by autocracies desire. It would mark the end of the liberal-democratic international order, of that which seemed possible from the postwar period until the first decade of our own century.
Avoiding this outcome is still possible, and much depends not only on a renewed effort from the EU’s principal states but also on the political evolution of the United States. We should not take for granted that Washington has become, permanently, an autocracy.
Are we confined to these geopolitical alternatives, or is it still possible — at least from below — to hope for a shift in the balance of power? After all, society is not entirely inert in the face of today’s grim scenarios: the September 22 demonstrations in Italy (a nationwide demonstration calling for a ceasefire in Gaza and denouncing war and authoritarianism) made that clear.
The September 22 protests were a beautiful event. Here in Milan, it was truly large and vibrant, despite the heavy rain. At the end of the demonstration, there were some violent incidents that could have been contained, but which not only the Right, but much of the media as well, irresponsibly emphasized—overshadowing the protest’s success.
It nevertheless confirmed that there exists a broad left-wing constituency that rejects war, autocracy, and neoliberalism. Yet this constituency is not organized, and at present there seem to be no democratic forces capable of giving it structure. For fifty years now, we have been witnessing this vast dispersion of energies within the Italian Left.
Despite signs of civic mobilization, why has the Italian Left, struggled to transform social energy into a coherent political project?
To understand the differences between Italy and other countries with which we usually compare ourselves, we have to return to the origins of the Italian Republic. The political system that took shape after the war — defined by the constitutional pact of 1948 — was composed of parties that operated under a tacit but fundamental convention: only those political forces aligned with the U.S.-led alliance were to be admitted to government, while those whose international reference point was the Soviet Union were to be excluded.
References to specific economic and social policies, grounded in the country’s domestic development, were secondary to this international divide. Adherence to the liberal-democratic model signaled precisely this new convention, which replaced the earlier Conventio ad excludendum (the unwritten rule barring the Communists from power, ed.).
When the Soviet Union collapsed after the fall of the Berlin Wall, all parties had to convert to this model if they wished to compete for power — even those that came from traditions profoundly different from liberal democracy. This belated assimilation of the Marxist parties, this conversion to liberal democracy, took a long time and caused persistent conflicts that significantly slowed Italy’s economic and social development. This, at least, is the conclusion I have reached from studying the histories of states that, already in the interwar period, had managed — or been compelled — to establish liberal-democratic political systems.
And what has become of those political forces today?
The parties that make up the two coalitions now competing for power in Italy never cease to reproach one another for their origins, nor to cast doubt on the sincerity of their respective conversions to liberal democracy. In a time of emergency and uncertainty such as the one we are living through, Italy has, for a quarter-century, remained the tail end of a Europe already struggling with evident difficulties.
Reuniting the Left, however, is only part of a larger problem: that of defining a political system capable of reducing the conflicts, polemics, and factionalism generated by the current functioning of Italian bipolarism. As has been said repeatedly, the task is to move from bi-populism to a realistic and moderate bi-partisanship. I hope I am wrong, but if we continue along the path we have followed so far, I fear that a serious crisis of Italian democracy may not be far away.
Cover photo: European Commission President Ursula von der Leyen speaks during a debate on the preparation of the European Council meeting, at the European Parliament in Strasbourg, eastern France, on October 22, 2025. (Photo by Frederick Florin / AFP)
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