SOAS Research Online

Abstract

The crisis of 2008 came at the end of a Lost Decade for the Portuguese economy, marked by low growth and investment rates, and rising indebtedness. The purpose of this dissertation is to find the structural causes behind this period of economic stagnation. Stagnation in mature capitalist economies has been the subject of a vivid academic debate within mainstream economics. In part one, I argue that, due to their neoclassical foundations, these approaches cannot understand stagnation as a systemic outcome of the evolution of capitalism. Heterodox approaches, on the other hand, present stagnation as the product of the historical and social process of accumulation and concentration of capital. This dissertation combines the core arguments of heterodox theories – namely Steindl’s and Kalecki’s – with insights from institutional economics – in particular Veblen –, to understand the strategies used by capitalists to promote the concentration and accumulation of capital in Portugal and their impact on economic stagnation. In part two, I make use of different methodologies and sources to examine the constitution and evolution of the Portuguese largest economic groups. I find that the historical process of accumulation and concentration of capital is not explained by the nature of individual entrepreneurs nor by the pure mechanics of production. It is an institutionally determined process, in which two elements play a crucial role: the banking sector and the State. In a broad perspective, policies, regulations and institutions create the structure of incentives – rents – that organises the functioning of capitalism in different historical moments. In the third part, I demonstrate that the Lost Decade is the result of the accumulation regime erected in the 1980/90s, which promoted the concentration of surplus in large companies — dominated by short-term pecuniary interests and inter-class conflicts, and unwilling to invest in the productive system.