Page 72 - COVID-19: The Great Reset

governments’ role. Rather than simply fixing market failures when
they arise, they should, as suggested by the economist Mariana

Mazzucato: “move towards actively shaping and creating markets
that deliver sustainable and inclusive growth. They should also
ensure that partnerships with business involving government
funds are driven by public interest, not profit”. [68]

How will this expanded role of governments manifest itself? A

significant element of new “bigger” government is already in place
with the vastly increased and quasi-immediate government control
of the economy. As detailed in Chapter 1, public economic

intervention has happened very quickly and on an unprecedented
scale. In April 2020, just as the pandemic began to engulf the
world, governments across the globe had announced stimulus
programmes amounting to several trillion dollars, as if eight or

nine Marshall Plans had been put into place almost
simultaneously to support the basic needs of the poorest people,
preserve jobs whenever possible and help businesses to survive.
Central banks decided to cut rates and committed to provide all

the liquidity that was needed, while governments started to
expand social-welfare benefits, make direct cash transfers, cover
wages, and suspend loan and mortgage payments, among other
responses. Only governments had the power, capability and reach

to make such decisions, without which economic calamity and a
complete social meltdown would have prevailed.

Looking to the future, governments will most likely, but with
different degrees of intensity, decide that it’s in the best interest of

society to rewrite some of the rules of the game and permanently
increase their role. As happened in the 1930s in the US when
massive unemployment and economic insecurity were
progressively addressed by a larger role for government, today a
similar course of action is likely to characterize the foreseeable

future. We review in other sub-chapters the form this will take (like
in the next one on the new social contract), but let’s briefly identify
some of the most salient points.

Heath and unemployment insurance will either need to be

created from scratch or be strengthened where it already exists.

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