It means, second, that the interventions were double-edged. Advancing the Treasury market allows government spending to be funded in the usual way by borrowing on furlough schemes and paycheck protection schemes. But government IOUs are fuel for private speculation. When liquidity flows indiscriminately into the financial system, it enlarges bubbles, creating new risks and increasing profits for those with substantial portfolios. Nowhere was this polarizing effect more apparent than in the United States. While millions were grappling with the crisis, trillions of dollars were piling up in the balance sheets of the rich.
In the end, digital money creation was easy. Keynes Bon Mott has a bite in its tail: we do everything we can In fact Work. The problem is agreeing on what to do and how. In giving us a glimpse of economic freedom, 2020 has robbed us of excuses and excuses. If we are not planning a global vaccine, it is not for lack of funds. That’s because indifference, or selfish calculation – America’s vaccination first – or actual technological constraints prevent us from “really” doing so.
It turns out that budget constraints, in all their artificiality, had spared us from experiencing an exceedingly limited desire and capacity for collective action. Now if you hear someone argue that we can’t afford to lift billions of people out of poverty or that we can’t afford to switch the energy system away from fossil fuels, we know how to react. Have to do It will have to: either you’re invoking technical constraints, in which case we need a suitably scaled, warp motion-style program to overcome them, or it’s just a matter of priorities. There are other things you would like to do.
challenges won’t go away, and they will not be small. Coronavirus was a blow, but a pandemic long prophecy. There is every reason to think that this will not be a one-off. Whether the disease originated from a zoonotic mutation or in a laboratory from which it came, it is even worse. And it is not just viruses that we have to worry about, but the increasing instability of climate, the decline of biodiversity, widespread desertification and pollution around the world.
Looking back ahead of 2020, it seemed that 2008 was the beginning of a new era of gradual and interconnected disruptions such as the global financial crisis, the election of Mr. Trump, and the trade and technical war with China. There was a ring in it that everyone was familiar with. The superpower competition, nationalism and the banking crisis all date back to the 19th and 20th centuries. Then came 2020. It has given us a glimpse of something fundamentally new: the old tensions of politics, finance and geopolitics intersect with a natural shock on a global scale.
The Biden administration declared that “America is back.” But what is it returning for? As recent events in Afghanistan show, President Biden is determined to clear the decks, ruthlessly if necessary. As far as the Pentagon is concerned, superpower competition with China is at the top of the agenda – a major writ of the 19th century. But what can be said about the interconnected global crises of the 21st century that cannot be attributed to any national adversary? For them, we have a model that is central bank financial market intervention – a form of crisis fighting based on technological networks, rooted in the current hierarchy of power and supported by powerful interests. It is conservative, ad hoc and lacks clear political legitimacy. It reinforces the existing hierarchy and privilege.
The challenge for a progressive globalism for the next decades is to increase those anti-crisis networks – in the areas of medical research and vaccine development, renewable energy, etc. – and make them more democratic, transparent and egalitarian.
Adam Toos (@adam_tooze) is an economic historian in Colombia and the author of the forthcoming “Shutdown: How Covid Shook the World’s Economy”, from which this essay is adapted. He writes chartbook newsletter.
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