That meant, second, that the interventions were double-edged. Propping up the Treasury market enabled government spending on furlough schemes and paycheck protection plans to be funded in the normal way, by borrowing. But government IOUs are fuel for private speculation. When liquidity is flushed indiscriminately into the financial system, it inflates bubbles, generating new risks and outsize gains for those with substantial portfolios. Nowhere was this polarizing effect more pronounced than in the United States. While tens of millions struggled through the crisis, trillions of dollars piled up in the balance sheets of the wealthy.
Finally, the digital money creation was the easy bit. Keynes’s bon mot has a sting in its tail: We can afford anything we can actually do. The problem is agreeing on what to do and how to do it. In giving us a glimpse of financial freedom, 2020 also robbed us of pretenses and excuses. If we are not doing a global vaccine plan, it is not for lack of funds. It is because indifference, or selfish calculation — vaccinate America first — or real technical obstacles prevent us from “actually” doing it.
It turns out that budget constraints, in all their artificiality, had spared us from facing the all-too-limited willingness and capacity for collective action. Now if you hear someone arguing that we cannot afford to bring billions of people out of poverty or we cannot afford to transition the energy system away from fossil fuels, we know how to respond: Either you are invoking technological obstacles, in which case we need a suitably scaled, Warp Speed-style program to overcome them, or it is simply a matter of priorities. There are other things you would rather do.
The challenges won’t go away, and they won’t get smaller. The coronavirus was a shock, but a pandemic was long predicted. There is every reason to think that this one will not be a one-off. Whether the disease originated in zoonotic mutation or in a lab, there is more and worse where it came from. And it is not just viruses that we have to worry about, but also the mounting destabilization of the climate, collapsing biodiversity, large-scale desertification and pollution across the globe.
Looking back before 2020, it seemed that 2008 was the beginning of a new era of successive and interconnected disruptions, such as the global financial crisis, Mr. Trump’s election, and the trade and tech war with China. It all had a familiar ring to it. Great-power competition, nationalism and banking crises all harked back to the 19th and 20th centuries. Then came 2020. It has given us a glimpse of something radically new: the old tensions of politics, finance and geopolitics intersecting with a natural shock on a global scale.
The Biden administration declares that “America is back.” But to what is it returning? As recent events in Afghanistan demonstrate, President Biden is determined to clear the decks, brutally if necessary. As far as the Pentagon is concerned, at the top of the agenda is great-power competition with China — a 19th century writ large. But what of the interconnected global crises of the 21st century that cannot be attributed to a national antagonist? For those, the one model that we have is central bank financial market intervention — a form of crisis-fighting based on technical networks, rooted in existing hierarchies of power and backed by powerful self-interest. It is conservative, ad hoc and lacking in explicit political legitimacy. It tends to reinforce existing hierarchy and privilege.
The challenge for a progressive globalism fit for the next decades is both to multiply those crisis-fighting networks — into the fields of medical research and vaccine development, renewable energy and so on — and to make them more democratic, transparent and egalitarian.
Adam Tooze (@adam_tooze) is an economic historian at Columbia and the author of the forthcoming “Shutdown: How Covid Shook the World’s Economy,” from which this essay is adapted. He writes the Chartbook newsletter.
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