Covid's Ultimate Victim - Will It Claim Neoliberalism or Take Down the United States?

Economist James Galbraith, son of legendary Keynesian economist John Kenneth Galbraith, says the United States will face a "do or die" moment as the nation emerges from the Covid 19 pandemic. Either the U.S. jettisons neoliberalism or face becoming that dogma's ultimate victim.

...bringing back demand for industrial, retail, and commercial office building construction will be harder, if not impossible, since there is ample excess capacity available and the pandemic has taught society how to work and shop from home. Global demand for the United States’ advanced product sectors—think aircraft or oil field services—is also likely to remain depressed. Meanwhile, an infrastructure package, if enacted, will indeed create a certain type of engineering, construction, and machinery job, but it will not reemploy the millions of services and office workers who have been wiped out by COVID-19. The problem of arrears in the vast pre-pandemic mountain of U.S. household debts will be faced when moratoria expire. And in the uncertain future, the question of the dollar’s role as the financial anchor of the world economy may, at some point, come into play.

In short, the United States has an entirely new set of problems—rooted in the decay of core economic functions, the fragility of its recovery from the last crisis, and its unstable position at the top of the world’s economic pyramid—in the face of a new, hybrid, competing, and non-neoliberal model [China] that shows every sign of lasting success. These structural facts are among those that policymakers must now address with no help from mainstream orthodoxies—and no possibility of returning to the equally deficient orthodoxies of an earlier era either.

But here is the way forward the United States needs for academic economics, for economics education, and for the training of future economic policymakers. That way is to replace the defunct neoliberal dogma and the people who diffuse it with scholars who have practical and historical knowledge of the economic problems, policies, and institutions of the world—and of the United States with all its complexities and details.

Such people exist, and more can be trained and found. They are, or must be, the people who are doing policy now and who are, or must be, grappling with these questions—both in the United States and in other countries. Those who have any success, vision, or imagination should become the teaching economists of the next era. Scholar practitioners with pragmatic knowledge of the real world should be put in charge of the next generation of economists and, therefore, of the future direction of economic thought. The movement should be as it was during the New Deal, World War II mobilization, and the construction of the postwar order: from practice and policy to thought, not from abstract dogma to economic policy.

In sum, knowledge of diversity, in thought and practice, is what Americans need. It is up to universities and the people who run and fund them to renovate intellectual resources. Such people, and only those, can protect society from the return of the zombie ideas of the neoliberal era.