Sanjay Reddy in Foreign Policy:
The coronavirus pandemic has dramatically disrupted the everyday social and economic patterns of societies around the world. Economists have focused on its economic impact and on what central banks and governments should do in response to an unusual simultaneous disruption of both supply and demand. There is consensus that governments will have to support businesses and workers who are losing income—or risk dangerous knock-on effects on banks and the real economy—and find a way to finance these expenditures. There is also an urgent need to ramp up the production of essential commodities such as ventilators, gloves, and masks; to provide hospital beds; and to ensure that required personnel can themselves turn up for work. Despite disruption to supply chains and restrictions on the population, essential goods and basic services must be provided, firms must be kept from going bankrupt, and employment and incomes must be maintained.
These circumstances raise fundamental questions about the role of the market and the public sector in doing what is needed on the required scale and with sufficient speed. Some economic thinkers are rightly attacking these problems with urgency. But addressing such practical ends also calls for us to rethink more basic economic ideas. The economics discipline has provided the most influential framework for thinking about public policies, but it has proved inadequate, both in preparing for the current emergency and for dealing with it. The pandemic underlines the necessity for a rethinking of our received ideas about economics and points in some directions that this rethinking should take.