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Build Back the State

6 days ago

In promising to "build back better" from the pandemic, US President Joe Biden has certainly struck the right note. But to succeed, he will need to forge a new social contract, drawing on the lessons of a previous era when the US state led a program that is still paying economic dividends.

LONDON – The development of COVID-19 vaccines in less than a year was clearly a major achievement. But the rollout has been far from perfect. In the United States, Operation Warp Speed met its manufacturing targets but stumbled in coordinating initial shipments. The plan neither prioritized vaccine recipients according to need, nor did it go far enough to address racial inequality in the distribution.

Build Back the

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Building Back Worse

29 days ago

British Prime Minister Boris Johnson’s government is clearly happy for the state to play a larger role in the economy. And yet, by scrapping a perfectly sensible industrial strategy for no good reason, it has all but ensured that the country’s economic problems will remain unsolved.

LONDON – The term “industrial strategy” has a turbulent history. After being embraced in the United Kingdom by the Labour governments of the 1960s and 1970s, it was rejected by Margaret Thatcher and subsequent prime ministers on the (dubious) grounds that government is inherently wasteful and inefficient.

The Shape of Global Recovery

Viktor Morozuk/Getty Images

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Don’t Defund the BBC

February 22, 2021

Understanding the BBC’s contributions to the British economy and society – and the concept of public value more broadly – requires a new conceptual framework. Rather than viewing public institutions’ role as being limited to fixing market failures, organizational structures like the BBC are also market shapers.

LONDON – In last year’s Reith Lectures – the BBC’s annual radio series – former Bank of England Governor Mark Carney observes that, since the 2008 financial crisis, norms and institutions have increasingly been defined by their monetary value. What is often missing from this discussion of price being confused with value, is how to capture the real worth of the public institutions that enrich us.

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Reimagining the Platform Economy

February 5, 2021

Today’s digital economy has grown up around a business model of data and wealth extraction, confounding traditional antitrust paradigms and undermining the public and social value that otherwise could be derived from technological innovation. The state can redress these problems, but only if it reclaims its proper role.

LONDON – As Donald Trump’s presidency careened to its ignominious end, with a mob of his supporters storming of the US Capitol, Facebook and Twitter banned the US president for inciting the violence. With that act, the scope of the political power wielded by Big Tech became impossible to ignore.Whether these platforms have too much political power is a debate that is just beginning. Their outsize

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From Moonshots to Earthshots

February 3, 2021

The pandemic has highlighted the cost of neglecting public investment, both in the welfare state and value creation. But the crisis has also created a huge opportunity to pursue industrial policies beyond traditional sectoral and technological silos, and to restore mission-driven governance in the public interest.

LONDON – COVID-19 has exposed the myriad weaknesses of modern capitalism. And in many countries, past cuts to social services and public health have amplified the damage wrought by the pandemic, while other self-inflicted wounds to the state have led to inadequate policy coordination and implementation. Mass testing and tracking, production of medical equipment, and education during lockdowns have all

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Central Banking’s Green Mission

December 8, 2020

Since the 2008 global financial crisis, central banks have shown time and again that they have the power to maintain the economic status quo. Now, they must use that power to support a timely green transition.

LONDON – “Mission creep” – the gradual or incremental broadening of an organization’s objectives beyond its original scope or focus – is typically regarded as undesirable. According to the conventional wisdom, an organization whose mission creeps is straying from its core purpose, becoming distracted, stretching itself too thin. But what if the new objectives are essential to society’s welfare? For central banks, the answer should be obvious.

Can Joe Biden’s America Be Trusted?

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Designing Vaccines for People, Not Profits

December 1, 2020

For all the hope spurred by announcements of demonstrated efficacy in multiple COVID-19 vaccine candidates, there is still a long way to go to deliver on the promise of a universal, freely available "people’s vaccine." As matters stand, national and private interests are trumping the principle of health justice.

LONDON – Recent announcements of demonstrated efficacy in COVID-19 vaccine trials have brought hope that a return to normality is in sight. The preliminary data for Pfizer/BioNTech and Moderna’s novel mRNA vaccines are highly encouraging, suggesting that their approval for emergency use is forthcoming. And more recent news of effectiveness (albeit at a slightly lower rate) in a vaccine from AstraZeneca and the University

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Can Green Business Be Good Business? – The Green Recovery Event

October 15, 2020

For more than 25 years, Project Syndicate has been guided by a simple credo: All people deserve access to a broad range of views by the world’s foremost leaders and thinkers on the issues, events, and forces shaping their lives. At a time of unprecedented uncertainty, that mission is more important than ever – and we remain committed to fulfilling it.
But there is no doubt that we, like so many other media organizations nowadays, are under growing strain. If you are in a position to support us, please subscribe now.
As a subscriber, you will enjoy unlimited access to our On Point suite of long reads and book reviews, Say More contributor interviews, The Year Ahead magazine, the full PS archive, and much more. You will also directly support our mission of delivering the

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How to End the Pandemic This Year

October 1, 2020

While the world waits with bated breath for a safe, effective, widely available COVID-19 vaccine, another option for ending the pandemic has been staring us in the face. A government-led industrial and coordination strategy to achieve universal testing could bring the crisis to an end in a matter of months.

LONDON – Research to develop a safe, effective, and widely available COVID-19 vaccine is advancing rapidly. But when it will happen is not clear. Much depends on how we govern the production and distribution of new drugs. While the World Health Organization’s COVID-19 Technology Access Pool promises to foster accessibility, the actual availability of vaccines and treatments also will hinge on local manufacturing

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Avoiding a Climate Lockdown

September 22, 2020

The world is approaching a tipping point on climate change, when protecting the future of civilization will require dramatic interventions. Avoiding this scenario will require a green economic transformation – and thus a radical overhaul of corporate governance, finance, policy, and energy systems.

LONDON – As COVID-19 spread earlier this year, governments introduced lockdowns in order to prevent a public-health emergency from spinning out of control. In the near future, the world may need to resort to lockdowns again – this time to tackle a climate emergency.

The Economic Case for Biden

Drew Angerer/Getty Images

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Toward a New Fiscal Constitution

July 10, 2020

Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

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No More Free-Lunch Bailouts

June 25, 2020

With governments spending on a massive scale to save industries and mitigate the economic fallout from COVID-19, they should be positioning their economies for a more sustainable future. Fortunately, far from remaining taboo, using state aid to change private-sector behavior has become common sense.

LONDON – The COVID-19 crisis and recession provides a unique opportunity to rethink the role of the state, particularly its relationship with business. The long-held assumption that government is a burden on the market economy has been debunked. Rediscovering the state’s traditional role as an “investor of first resort” – rather than just as a lender of last resort – has become a precondition for effective policymaking in

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The Big Failure of Small Government

May 19, 2020

It is no coincidence that countries with mission-driven governments have fared better in the COVID-19 crisis than have countries beholden to the cult of efficiency. Effective governance, it turns out, cannot be conjured up at will, because it requires investment in state capacity.

LONDON – Decades of privatization, outsourcing, and budget cuts in the name of “efficiency” have significantly hampered many governments’ responses to the COVID-19 crisis. At the same time, successful responses by other governments have shown that investments in core public-sector capabilities make all the difference in times of emergency. The countries that have handled the crisis well are those where the state maintains a productive

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How to Develop a COVID-19 Vaccine for All

April 27, 2020

Strong health systems, adequate testing capacity, and an effective, universally available vaccine will be key to protecting societies from COVID-19. But ensuring that no one is left behind requires not just unprecedented collective investment, but also a very different approach to innovation.

LONDON – In the early weeks of 2020, it started to dawn on people that COVID-19 could be the long-dreaded but expected “Disease X” – a global pandemic caused by an unknown virus. Three months later, the majority of the world’s population is in lockdown, and it is clear that we are only as healthy as our neighbors – locally, nationally, and internationally.

What the Stock Market Is Really Saying

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Capitalism’s Triple Crisis

March 30, 2020

After the 2008 financial crisis, we learned the hard way what happens when governments flood the economy with unconditional liquidity, rather than laying the foundation for a sustainable and inclusive recovery. Now that an even more severe crisis is underway, we must not repeat the same mistake.

LONDON – Capitalism is facing at least three major crises. A pandemic-induced health crisis has rapidly ignited an economic crisiswith yet unknown consequences for financial stability, and all of this is playing out against the backdrop of a climate crisis that cannot be addressed by “business as usual.” Until just two months ago, the news media were full of frightening images of overwhelmed firefighters, not overwhelmed

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Mobilizing for a Climate Moonshot

October 8, 2019

Governments can accomplish remarkable things when they have not been hollowed out in the name of misguided "free-market" ideology. Now that humankind is confronting the existential challenge of climate change, our survival depends on reclaiming the public spirit of the Apollo program – and the hope it inspired.

LONDON – The 50th anniversary of the first Moon landing in July reinforced an important lesson: one of humankind’s greatest feats occurred when imagination, common purpose, and a systemic approach to problem solving won out over siloed thinking and anxiety about where the money would come from. As US President John F. Kennedy made clear in 1961, going to the moon would cost money and entail risks, but it would

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Preventing Digital Feudalism

October 2, 2019

By exploiting technologies that were originally developed by the public sector, digital platform companies have acquired a market position that allows them to extract massive rents from consumers and workers alike. Reforming the digital economy so that it serves collective ends is thus the defining economic challenge of our time.

LONDON – The use and abuse of data by Facebook and other tech companies are finally garnering the official attention they deserve. With personal data becoming the world’s most valuable commodity, will users be the platform economy’s masters or its slaves?
The Impeachment Trap

Melina Mara/The Washington Post via Getty Images

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How to Build a Patient Investment Bank

March 28, 2019

If they are well structured and governed, public investment banks can be powerful catalysts for investment-led growth. But governments that establish such institutions should adhere to four guidelines.

LONDON – The global financial crisis showed that plentiful finance can generate growth that is not necessarily sustainable or socially useful. Since then, the assets of the global banking sector have increased by some $40 trillion, and yet there is still not enough sustainable growth. Why?

Jose Luis Pelaez Inc/Getty Images

Wojtek Radwanski/AFP/Getty Images

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The short answer is that finance is not “neutral.” There is a big

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Putting the Public Back in Public Health

December 3, 2018

As pharmaceutical companies continue to ratchet up drug prices, the burden on public health agencies like the UK’s National Health Service is becoming unsustainable. Rather than looking on as public investments are channeled into private profits, governments need to step in to guide innovation toward collective goals.

LONDON – The United Kingdom’s National Health Service marked its 70th birthday this year, so this is a good time to reflect on the NHS’s past and consider its future. The NHS has long been a source of inspiration in health-care debates around the world. But if it is not put on a more sustainable footing, it could become a cautionary tale.

Cynthia Johnson/Liaison/Getty Images

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Who Really Creates Value in an Economy?

September 11, 2018

Ten years after the global economic crisis, profits have recovered, but investment remains weak. Ultimately, the reason is that economic policy continues to be informed by neoliberal ideology and its academic cousin, “public choice” theory, rather than by historical experience.

LONDON – After the 2008 global financial crisis, a consensus emerged that the public sector had a responsibility to intervene to bail out systemically important banks and stimulate economic growth. But that consensus proved short-lived, and soon the public sector’s economic interventions came to be viewed as the main cause of the crisis, and thus needed to be reversed. This turned out to be a grave mistake.

Carl Court/Getty Images

Melanie

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The Value of Government Risk Taking

June 12, 2018

While many in the private sector consider themselves “wealth creators,” governments have come to believe that their economic role is more passive. But this is short-sighted; when mission-driven public-sector actors collaborate to tackle problems, they co-create new markets that affect both the rate of growth and its direction.

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Rediscovering Public Wealth Creation

December 21, 2017

In today’s debates about the policies and organizational structures that can best deliver sustained economic growth, we seem to have forgotten the wealth-creating role of the state. The most important innovations of the twenty-first century were not immaculately conceived by free markets; they were first developed in government research labs.
LONDON – At the cusp of the new year, a decades-old debate among economists is heating up again: Does austerity help or hurt economic growth? Broadly speaking, the debaters fall into two camps: conservatives who call for limited public spending, and thus a smaller state; and progressives who argue for greater investment in public goods and services such as infrastructure, education, and health care.Of course, reality is more complex

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A State-Powered Green Revolution

March 10, 2016

LONDON – Discussions about building a green future tend to focus on the need to improve the generation of energy from renewable sources. But that is just the first step. Better mechanisms for storing and releasing that energy – when the sun isn’t shining, the wind isn’t blowing, or when electric cars are on the move – are also critical. And, contrary to popular belief, it is the public sector that is leading the way toward effective solutions.
Since the commercial development of lithium-ion batteries – the rechargeable batteries common in consumer electronics – in the early 1990s, the challenge of storing and releasing power effectively enough to make sustainable energy sources viable alternatives to fossil fuels has been a vexing one. And efforts by entrepreneurial billionaires like Bill Gates and Elon Musk to overcome this challenge have been the focus of much excited media speculation. So how many billionaires does it take to change a battery?

The answer, it turns out, is zero. This week, Ellen Williams, Director of the Advanced Research Projects Agency-Energy, part of the US Department of Energy, announced that her agency had beaten the billionaires to it. ARPA-E, she declared, had attained “some holy grails in batteries,” which will enable us to “create a totally new approach to battery technology, make it work, make it commercially viable.

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Toward a Green New Deal

December 14, 2015

LONDON – The global agreement reached in Paris last week is actually the third climate agreement reached in the past month. The first happened at the end of November, when a group of billionaires led by Bill Gates, Mark Zuckerberg, and Jeff Bezos announced the creation of a $20 billion fund to back clean-energy research. On the same day, a group of 20 countries, including the United States, the United Kingdom, Germany, India, China, and Brazil, agreed to double their investment in green energy, to a total of $20 billion a year.
Of the two pre-Paris announcements, it was that of the Breakthrough Energy Coalition (BEC) – Gates and his fellow entrepreneurs – that grabbed most of the headlines. This is not surprising, given the strong association in the popular imagination between innovation and the private sector. If a technological breakthrough is needed in the fight against climate change, whom should we expect to provide it, if not the wizards of Silicon Valley and other hubs of free-market innovation?

Gates himself is the first to acknowledge that the public perception is far from accurate. “The private sector knows how to build companies, evaluate the potential for success, and take the risks that lead to taking innovative ideas and bringing them to the world,” reads his coalition’s manifesto.

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Jeremy Corbyn’s Necessary Agenda

September 29, 2015

BRIGHTON – Seven economists (including Joseph Stiglitz, Thomas Piketty, and me) have agreed to become economic advisers to Jeremy Corbyn, the new leader of the British Labour Party. I hope we will have a shared goal to help Labour shape an economic policy that is investment-led, inclusive, and sustainable. We will bring different ideas to the table, but these are my thoughts on the kind of progressive agenda the United Kingdom – and the rest of the world – now needs.
economic advisers to Jeremy Corbyn, the new leader of the British Labour Party. I hope we will have a shared goal to help Labour shape an economic policy that is investment–led, inclusive, and sustainable. We will bring different ideas to the table, but here are my thoughts on the kind of progressive agenda that the United Kingdom – and the rest of the world – now needs.
wealth creation is a collective process and that market outcomes are the product of how these various “wealth creators” interact.

We must drop the false dichotomy of governments versus markets and begin to think more clearly about the market outcomes we want. There is plenty to learn from public investments that were mission-oriented, instead of focused on “facilitating” or “incentivizing” business. Policy should actively shape and create markets, not just fix them when they go wrong.

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