It’s emblematic of today’s capitalist society that groups of people get left behind, and it’s the job of policy makers to try to fix that.
This isn’t the first time capitalism is in crisis. In the 1950s — America’s so-called golden age — there were concerns about automation eliminating jobs and people falling through the cracks of the government’s safety net (sound familiar?). And in 2008, corporate greed came under the microscope following the financial crisis.
It will be hard to sweep all of America’s economic issues under the rug again when the pandemic is over.
“We are pregnant with change,” said MIT economics professor Daron Acemoglu.
Here are three ways the pandemic might change capitalism forever:
A new social safety net
The pandemic exposed the cracks in America’s social safety net. Enter the welfare state 2.0, which could be more attuned to workers’ needs, experts said.
“We’re in a moment where the pendulum is [swinging] towards a more favorable view of what government can do,” Glickman said.
Better-designed unemployment benefits, programs to help people back into the workforce and more affordable housing could help ease the burden of this crisis for the weakest members of the economy.
Paying to replace these workers’ wages won’t come cheap, and will likely mean that taxes will have to rise while still staying low enough not to stifle business, economists agree. It’s a tightrope.
Globalization and automation challenge the manufacturing sector
Globalization goes hand in hand with capitalism. It has changed the way money and people move around the world.
A big challenge for policy makers is to deal with how that has affected workers.
Welfare isn’t only about benefits. It also extends to education and health care. In a world where machines increasingly take over people’s jobs, educating the next generation so their skills match what’s needed is important.
More debt than ever before
Capitalism isn’t only about how a country treats its people and workers, it’s also about how it treats its money.
Debt might be one of the most prominent characteristics of today’s capitalism, said Christine Desan, professor of law at Harvard.
In the post-pandemic world, policy makers will either have to accept living with enormous debt burdens or address a complete overhaul of the system in place.