One of my first direct meetings with neoliberalism (markets wherever possible) was hearing Keith Joseph, Mrs. Thatcher's mentor, speak at LSE in 1975. Thinking back, and about what I have learned since, I realise that free market enthusiasts assume that markets and capitalism are self-sustaining. What the Covid-19 pandemic reminds us of is that if we encounter a disaster like depression, war, pandemic, or whatever, then that is not the case.

For isntance, the Austrian economist Joseph Schumpeter's notion of 'creative destruction' presumes that failure of firms, change in technology, replacement of old industries by new, and the like, will be at a level the capitalist system can cope with and keep running along. The point about sudden disasters such as the current one is that destruction accelerates far beyond what the system can deal with. Then the state has to step in - big time - simply to fulfil its most basic function of providing security for its people.

There is a mirror image to all this. State intervention, and indeed socialism, suddenly make far more sense in emergencies and will secure acceptance at levels not normally contemplated when emergencies occur. But admirers of those outlooks confront the mirror image displaying their problem as making state regulation and socialism sustainable in ordinary conditions. Ideologues beware.


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