By Jonathan Michael Feldman, March 28, 2020

In an interview with Vox, Adam Tooze correctly explains that both the right and the left make mistakes in their understanding of the corona crisis and its solutions. He argues: “The left wants reformist change and the right wants to allow the market process to operate unencumbered. Both of them, I think, are operating with a kind of unrealistic understanding of the nature of this crisis. If we’re looking at as many as 10 million jobs lost in a matter of months, these arguments go out the window and the argument for preservation of what we can still preserve becomes absolutely overriding.” There’s no arguing against shutting down major parts of the economy. The problem arises when we start thinking about what shutting down doesn’t do.

Despite Tooze’s willingness to challenge established points of view, his arguments often lack any substance. Vox, it should be remembered, has functioned as a kind of cheerleader for the Democratic Party and globalization which they marry with cosmopolitan, intersectional anti-chauvinism. There are several problems with Klein and Tooze’s approach.

First, neither of them seems to have a very broad or deep understanding of what an economy is. An economy involves a system that might support life and mitigate death. An economy can involve the networks of volunteers who make masks, design and produce ventilators, or help older persons with their shopping as part of their labor/leisure time. These inputs can be characterized as economic activity and exist beyond the normal workings of the state and market.

Second, there’s a failure to understand the need for proactive mobilization efforts. One of Tooze’s ideas is the following: “To think about what we need as a kind of wartime mobilization seems to me to miss the point completely. This is a much more peculiar task than that. The job is maintaining the economy on life support during a period of an artificially induced coma while we address the public health challenge.” Likewise, on the Swedish television program Skavlan, economist Paul Krugman used the same exact language, i.e. that the economy had to be put under a “coma.”

While there’s no doubt that placing much or most of the economy under a coma is necessary, certain activities can proceed more or less as normal. We need to distinguish between parts of the economy that involve face-to-face contact and those parts that can be managed virtually (even if these are of lesser importance now). It is this distinction that neither Tooze nor Krugman took light of or emphasized, i.e. what we have is more like the need for a selective although comprehensive coma.

The reason for splitting hairs like this is because we can’t put all of the economy in a coma. We can’t put food production and distribution, the development of medicine, ventilators and other health and safety products and services in a coma. We can’t put hospitals and supermarkets into a coma. And we can’t put the factories that produce ventilators into a coma. In fact, we do need war time mobilization of ventilators, something even Trump seems to acknowledge, which Tooze does not.

Third, Tooze seems to still be operating under globalist illusions. Ezra Klein, who interviewed Tooze, told him: ” I think people get that coronavirus is a global problem, but the economic crisis is being framed as a domestic problem. But it isn’t.” He then asked Tooze, “What are the biggest international finance or geopolitical risks you see right now?” Tooze did not bother to correct Klein that the corona crisis is a serial problem of a failure to embrace elements of economic nationalism. Countries have become dependent on other countries for key products which they won’t deliver. Tooze discussed nations in Africa which are vulnerable to the corona virus, but said nothing about how the failure to build up the technological, scientific or medial resources of these nations on a national basis has made them vulnerable. The same vulnerability extends to Italy which Tooze also discussed.

Fourth, Klein exempted business responsibility for the crisis in a way that Tooze appears to condone. In another question to Tooze, Klein said: “But on the other hand, we’re not in the same situation where businesses bear the responsibility for what’s happening. I wonder how you think about that question.” Klein obviously has not read article after article in The New York Times about a failure of supply chains to produce medical equipment fast enough and in sufficient volumes. I’ve surveyed these elsewhere and they show a systematic failure of the globalization of production and accompany just-in-time production based on low inventories.

Instead of recognizing the advantages of national control of the economy and the limits of globalization, Tooze sees nationalism is a kind of insane attack on global coordination: “What we’ve seen so far in the last couple of weeks is [that] the situation is so discombobulated, and the Trump administration is such a headless chicken, that there isn’t even a concerted nationalist pushback against the global stabilization efforts being pursued by the Federal Reserve and the International Monetary Fund.” Please remind me when these two institutions have acted to support a green industrial policy or the strengthening of nationally-based supply chains of urgently needed medical equipment.

The failure to embrace required elements of economic nationalism can be seen in nation states which are viewed as either “Socialist” or entrepreneurial capitalist, but in either case are asleep at the wheel. On the Swedish Radio program, “Ekonomiekot Extra,” one scholar highlighted how the Chinese might go on a buying spree of Swedish businesses which are now vulnerable to takeover because of their devalued assets. The program noted the oversize role of China in financing the Swedish wind power development, yet another indication of how the Swedish state has failed to develop a proper industrial development bank. Likewise, Volvo is now owned by the Chinese who are apparently Sweden’s de facto coordinator of industrial policy.

We are therefore left with many questions about Vox‘s intervention.

What happens if the economy is not put under a coma, at least those parts that should be frozen? Is moving beyond the left and right going to then help us? Won’t we have to mobilize economic resources to boycott advertisers of the Fox news propaganda apparatus or to assist front line medical communities however we can? Aren’t such actions part of the reproductive economy which most economists ignore?

How can we meet the urgent and critical supply side challenges which exist even as the coma works? Didn’t China have such mobilization capacities, which the U.S. and most other nations lack, even during the coma and lockdown? These points seem to escape Klein and Tooze for mysterious reasons–unless the reasons have something to do with intellectual product differentiation.