Welcome letter from the ISS Secretary General

Dear friends and colleagues,

The year 2020 surely has delivered a monstrously unexpected surprise, not comparable to any other catastrophe in modern history. It is the first time that mankind had and still has to master a global challenge which is furiously changing our life, the way we travel, communicate, work and spend our free time. That happens all over the world, in Europe, the Americas, in Asia and Africa.

Everywhere we are confronted with a pandemic disease threatening in a dramatic manner people’s life and healthiness. At the same time inducing very harsh governmental measures which extremely confine our daily living and individual freedom. These measures were decided in every country on the base of a more or less common strategy dominated by the current wisdom of medical science.And, surprisingly, they didn’t take into account different political ideologies, different economic systems or different cultural backgrounds which characterize the variety of countries on our globe. It is the first time in younger history that a really existential problem for mankind rose up and rapidly created a common sense policy on a worldwide similar scale.
Well, climate change may include comparable existential threats for mankind, but to a high degree it is politically precepted and handled as a local, regional or national problem. Moreover, a majority of citizens still believe that it is a challenge whose grievances will occur in a far away future and thus don’t affect today’s life in an extraordinarily dramatic way.
What does all that mean for economists elaborating their insights and ideas in a Schumpeterian way of thinking?
First of all, as far as I know, no great economist has ever spent much time to focus on possible profound and forceful attacks of nature against human life and healthiness and integrated it into his work – neither A. Smith nor K. Marx, G. M. Keynes or J. A. Schumpeter – although these elements are constitutional prerequisites for the working of economic and social systems. Perhaps, such sudden and global turbulences may have been thought of by former economists as quite utopian cases which wouldn’t need any precautious arrangements of economic and social resilience.

However, in today’s perspective resilience may even become the key word in the post corona epoch. More than ever before we are
living in a “risk society”, a phenomenon which Ulrich Beck, a German sociologist, already analyzed in 1986. Future is characterized as a sphere in which not only positive expectations dominate society’s wellbeing, but also negative risks of existential character like the current one. That means especially for Schumpeterian economists that they are called up to bring in such unforeseen disruptive “black swan” events into their theoretical and analytical thinking.
In such a context many interesting topics arise waiting for scientific treaties. A first and promising one may be the unbelievable push which “digitalization” seems to receive from the pandemic, upgrading it into a core technology of the future which will determine and profoundly change coming processes of communication, working, producing and consuming.
Such a development will also bring together more closely the economic and ecological effects of modern capitalism, even transforming them into a positive relationship. In other words: it may create an intellectual base for assimilating Schumpeterian ideas with principles formulated by Georgescu-Roegen. A first step in this direction may be seen in the slogan of “More from Less” which Andrew Mc Affe used as title for his latest book.

By the way, what shall be the right relationship between man and machine in a world dominated by digitalization and artificial intelligence?

A second topic shining up can also be characterized by bringing together the insights of two economists, namely Schumpeter and Keynes. In this respect, the core question which has to be asked is the following: Which role and importance shall be attached to a paternalistic government and a liberal market sector of an economy in a situation of global emergency? How much power and resources should be distributed between them when existential values are at stake concerning life and healthiness, requiring a quick and effective response.
Last but not least, in such a situation not only the institutional relationship between the private and the public sphere will have to be evaluated in a more distinct manner, but society in general has to be reflected from quite a different angle. Striving after new creative solutions in the sense of a positive Schumpeterian future orientation has to be coupled with a social behavior in which (existential) risk plays a remarkable role. Then, avoidance and resistance as well as the personal ability to become strong – in the sense of A. Sen – gain major importance as well. As far as that goes, a huge challenge in the living of any society will be to bring together both features of future existence – the positive and the negative ones – into a functional balance using economics and politics as helpful instruments.
Fortunately, more than three years ago, we choose the topic “Schumpeterian Perspectives on Radical Change: Robotics, Artificial Intelligence and Broad Societal Transformations” as subject for the postponed 2020 conference in Rome. In 2021, the conference will surely take place as a virtual meeting under the same topic (see “Call for Papers”). And, most important, its theme seems even more relevant and adequate to tackle the present situation than it has ever been before. Our president, Massimo Egidi, and his team are prepared to set up a very fruitful conference.
So, let’s do our homework. A bunch of most interesting questions and serious problems is waiting to be delt and solved in a Schumpeterian spirit.
It would be great to meet you at the beginning of July, virtually via internet. Until then I wish you all the best: good health and many inspiring ideas.

Don’t lose your optimism.
Best greetings
Horst Hanusch, Secretary General