An opinion piece in the New York Times claims progressive capitalism is not an oxymoron.
As an economist, Joseph E. Stiglitz is always asked if we afford to provide a middle-class life for most, let alone all, Americans? Somehow, we did when we were a much poorer country in the years after World War II. In our politics, in our labor-market participation, and in our health we are already paying the price for our failures. Joseph E. Stiglitz suggests he neoliberal fantasy that unfettered markets will deliver prosperity to everyone should be put to rest. It is as fatally flawed as the notion after the fall of the Iron Curtain that we were seeing “the end of history” and that we would all soon be liberal democracies with capitalist economies.
Most important, our exploitive capitalism has shaped who we are as individuals and as a society. The rampant dishonesty we’ve seen from Wells Fargo and Volkswagen or from members of the Sackler family as they promoted drugs they knew were addictive — this is what is to be expected in a society that lauds the pursuit of profits as leading, to quote Adam Smith, “as if by an invisible hand,” to the well-being of society, with no regard to whether those profits derive from exploitation or wealth creation.1David Kalkstein, a postdoctoral scholar, and Gregory Walton, an associate professor, all in the psychology department at Stanford University write that the coronavirus crisis has laid bare the health, social, and economic inequalities that have been growing in the United States for decades. This moment of upheaval is leading to calls across the U.S. for structural reforms to the social and economic systems in our country.
Why is COVID-19 increasing support for universal social policies? Our new data suggest that one factor is the normalization of financial hardship. More and more Americans are experiencing need firsthand. In our large longitudinal study, one in two respondents reported having their work hours cut, and one in five had lost a job due to coronavirus by late April. Those who experienced such COVID-related financial impacts were over 20% more likely to support basic income. And between March and April, our respondents became less likely to stigmatize those who would receive basic income, and more likely to see them as being “like me.” It appears that, as financial hardship becomes more common, empathy for financial need is growing.2An article in the Economist reviews why the pandemic will be remembered as a turning-point. Out of the ashes of all that suffering will emerge the sense that life is not to be hoarded, but lived. Like the pandemic, climate change is impervious to populist denials, global in the disruption it causes and will be far more costly to deal with in the future if it is neglected now. A third reason to expect change is that the pandemic has highlighted injustice.
This disruption is in its infancy. The pandemic is proof that change is possible even in conservative industries like health care. Fuelled by cheap capital and new technology, including artificial intelligence and, possibly, quantum computing (see article), innovation will burn through industry after industry. For example, costs at American colleges and universities have increased almost five times faster than consumer prices in the past 40 years, even as teaching has barely changed, making it tempting to disruptors. Further technological progress in renewable sources of energy, smart grids and battery storage are all vital steps on the path to replacing fossil fuels.3Perhaps people under lockdown have asked themselves what matters most in life. Governments may take that as their inspiration, focusing on policies that should include a new social contract fit for the 21st century.
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