Keynesian Insights for the Pandemic Era: Addressing Inequality and Authoritarianism

Zachary Carter, author of "The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes," discusses the profound economic and political instability facing the United States in May 2020, amidst the COVID-19 pandemic. He highlights a deeply unequal society bordering on ungovernable, evidenced by declining life expectancy, "deaths of despair" among lower-income white men, and a political system unresponsive to the vast majority. Carter observes a stark division between a wealthy elite with unique political access and a working class increasingly decoupled from governing interests. While progressive ideas for systemic change are gaining traction among the general public, the political class, particularly Democratic leadership, is perceived as disconnected, often blaming current problems solely on Donald Trump rather than acknowledging deeper, long-standing societal issues.

The conversation critiques the initial COVID-19 response, which saw trillions in corporate funding with few strings attached, while support for working people was deemed inadequate and temporary. Carter argues that this approach failed to prevent mass layoffs or establish a robust social safety net, leading to an unemployment crisis and a deep misunderstanding of human psychology, which will likely result in long-term societal repercussions. He emphasizes that "muddling through" will lead to disaster and calls for bold, ambitious action to address systemic problems like climate change, inequality, and declining life expectancy, rather than superficial policy fixes.

Drawing heavily on John Maynard Keynes, Carter reintroduces Keynes not merely as a "deficit therapist" but as a thinker deeply concerned with the political and moral dimensions of economics. Keynes, a pacifist, viewed economic policy as an extension of diplomacy, aiming to foster social harmony and avert the rise of authoritarianism, which he saw as a grave threat after World War I. His work, from 1919 until his death, was dedicated to solving problems like war and depression without violence, believing that economic stability and equitable distribution were crucial for preserving democracy and a civilized way of life.

Carter highlights Keynes's belief in the capacity to overcome economic scarcity, ensuring everyone's basic needs and ability to enjoy life are met. He suggests that Keynes's non-conformist spirit, influenced by the Bloomsbury Group, allowed him to bridge social strata and understand the broader social continuum, making his thought uniquely compelling. The discussion concludes with Keynes's enduring optimism and faith in the next generation to grasp and address the world's challenges, contrasting this with the perceived numbness and inability of current leaders to comprehend the gravity of the unfolding crisis and offer truly transformative solutions.

"a country in the United States that has become so deeply unequal economically that it it appears to me to be politically bordering on ungovernable"

"the fact that life expectancy declined in the United States for the last two years that it was measured because of deaths of despair predominantly among lower income white men"

"the society is really breaking into at least two different kinds of social universes"

"muddling through will actually lead us straight into disaster"

"if there's anything for any lesson from the life of john maynard keynes it's that things can always get worse but they can always get better"

"the democratic party leadership ignores that that that sense among people at its own peril"

"the election of Trump himself and is a reflection of the political and social despair that people feel about about their ability to to to even you know get attention from people in Washington"

"there was an opportunity to say let's not let these people have their job relationships with their employers be be severed"

"the idea that we're going to bounce back from this very quickly I think is a deep misunderstanding of human psychology"

"the conversion of keynes into a sort of deficit therapist... has sort of robbed a lot of his thought of this political and moral content"

"his economics everything that he's working on from 1919 until his death in 1946 is is aimed at averting the this rise of authoritarian politics"

"he just does not believe in economic scarcity he thinks that we have we have the ability to feed everybody to clothe everybody to house everybody"