Transcript: Will COVID-19 End Neoliberalism? | May 13, 2020

Steve sits in a room with white walls, a low slanted ceiling and several framed pictures on the walls including one of George Drew and one of Walter Kronkite. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a white shirt and a spotted blue tie.

A caption on screen reads "Will COVID-19 end neoliberalism? @spaikin, @theagenda."

Steve says BIG GOVERNMENT, AS AN EXPLICIT POLITICAL AGENDA WENT OUT OF STYLE A FEW DECADES BACK, HELPED OFF THE STAGE IN PART BY THE RIGHT-LEANING PERSPECTIVE KNOWN AS NEO-LIBERALISM. BUT AS GOVERNMENTS HERE AND AROUND THE WORLD ROLL OUT MASSIVE STATE AID IN THE WAKE OF COVID-19, EVEN NEO-LIBERAL STALWARTS NOW SEEM TO BE WELCOMING THE STATE BACK WITH OPEN ARMS. HAS ITS TIME COME AGAIN? LET'S ASK. IN CAMBRIDGE, MASSACHUSETTS, Bhaskar Sunkara, FOUNDING EDITOR OF JACOBIN MAGAZINE AND AUTHOR OF "THE SOCIALIST MANIFESTO: THE CASE FOR RADICAL POLITICS IN AN ERA OF EXTREME INEQUALITY..."

Bhaskar is in his thirties, with short-cropped black hair and a stubble. He's wearing a plum shirt.

Steve continues AND IN BAINESVILLE, ONTARIO, NEAR CORNWALL, ON THE BANKS OF THE ST. LAWRENCE RIVER, THERE IS SEAN SPEER, ASSISTANT PROFESSOR AT THE UNIVERSITY OF TORONTO'S MUNK SCHOOL OF GLOBAL AFFAIRS AND PUBLIC POLICY...

Sean is in his early forties, clean-shaven, with short brown hair. He's wearing a blue shirt.

Steve continues AND A FELLOW IN RESIDENCE AT THE PUBLIC POLICY FORUM AND GENTLEMEN IT'S GOOD TO HAVE BOTH OF YOU BACK ON TVO. TWO FAMILIAR FACES FOR OUR VIEWERS. I WANT TO START BY READING A COUPLE OF DIFFERENT QUOTES HERE AND THEN WE'LL START OUR DISCUSSION. THIS ONE IS. BHASKAR YOU WILL BE GLAD TO KNOW FROM JACOBIN MAGAZINE IN LATE APRIL.

A quote appears on screen, under the title "Dear government, the economy needs you." The quote reads "THE PANDEMIC HIT. AFTER FOUR DECADES OF NEO-LIBERALISM HAD DEPLETED STATE CAPACITIES IN THE NAME OF THE SUPERIOR EFFICIENCY OF THE MARKETINGS FOSTERED DEINDUSTRIALIZATION THROUGH THE GLOBALIZATION OF PRODUCTION AND BUILT FRAGILE FINANCIAL STRUCTURES SECURED ONLY BY THE STATE, ALL IN THE NAME OF SHORT-TERM PROFITABILITY."
Quoted from Alfredo Saad-Filho, Jacobin Magazine. April 23, 2020.

Steve says AND THEN HERE'S WHAT THE FINANCIAL TIMES EDITORIAL BOARD WROTE IN EARLY APRIL IN A PIECE CALLED "VIRUS LAYS BEAR THE FRAILTY OF THE SOCIAL CONTRACT."

Another quote appears that reads "RADICAL REFORMS REVERSING THE PREVAILING POLICY DIRECTION OF THE LAST FOUR DECADES WILL NEED TO BE PUT ON THE TABLE. GOVERNMENTS WILL HAVE TO ACCEPT A MORE ACTIVE ROLE IN THE ECONOMY. THEY MUST SEE PUBLIC SERVICES AS INVESTMENTS RATHER THAN LIABILITIES AND LOOK FOR WAYS TO MAKE LABOUR MARKETS LESS INSECURE. REDISTRIBUTION WILL AGAIN BE ON THE AGENDA. THE PRIVILEGES OF THE ELDERLY AND WEALTHY IN QUESTION. POLICIES UNTIL RECENTLY CONSIDERED ECCENTRIC SUCH AS BASIC INCOME AND WEALTH TAXES WILL HAVE TO BE IN THE MIX."

Quoted from The Financial Times editorial board. April 3, 2020.

Steve says BHASKAR, I'M NOT SURE YOU EVER THOUGHT YOU WOULD LIVE LONG ENOUGH TO SEE THE FINANCIAL TIMES ECHOING SOMETHING YOU MIGHT READ IN JACOBIN MAGAZINE BUT WHAT DO YOU MAKE OF THAT QUOTE?

The caption changes to "Bhaskar Sunkara. Jacobin Magazine. Author, 'The Socialist Manifesto.'"

Bhaskar says I THINK IT'S A RETURN TO THE NORM. NOW, THE FINANCIAL TIMES AND VENUES LIKE IT HAVEN'T ALWAYS BEEN IN FAVOUR OF THIS UNFETTERED FREE MARKET. THIS IS A BRIEF PERIOD FROM THE LATE 7S AND THROUGH THE 90s THAT THERE WAS THIS CONSENSUS. AND IT WAS BROKEN IN PART BY THE EFFECTS OF FINANCIAL DEREGULATION. AND THE 2008 CRASH. SO THERE'S ALWAYS BEEN A ROLE FOR THE STATE TO PLAY. THE PRIVATE CAPITAL HAS ALWAYS BEEN WILLING TO WORK WITH THE STATE. THE QUESTION IS, WILL PRIVATE CAPITAL BE WILLING TO TAKE DIRECTION FROM THE STATE? SO IN OTHER WORDS, YOU HAVE CARROTS AND STICKS WHEN IT COMES TO PLANNING AND SHAPING CERTAIN OUTCOMES. CAPITALISTS ARE ALWAYS WILLING TO ACCEPT SUBSIDIES AND SUPPORT BUT THEY'RE NOT ALWAYS TO HAVE THE STATE TAKE THE MEASURES NECESSARY TO SECURE NOT JUST THE SHORT-TERM INTERESTS OF PROFITS BUT THE MEDIUM AND LONG-TERM INTERESTS OF DEVELOPMENT. AND I THINK THAT'S THE DIFFERENCE. SO WHEN WE TALK ABOUT NEO-LIBERALISM, NEO-LIBERALISM ISN'T AND WASN'T THE RETREAT OF THE STATE, IT WAS THE STATE DOING OTHER THINGS. THE STATE PUSHING AN AGENDA OF DEREGULATION AND DEUNIONIZATION. NOW WE'RE SEEING THAT, IN FACT, A HEALTHY, PROSPEROUS ECONOMY THAT WORKS FOR THE BOTTOM 80 percent OF THE ECONOMY REQUIRES STRONG UNIONS AND IT REQUIRES SOME SORT OF ROLE FOR THE STATE.

Steve says SEAN, WHAT SIGNAL DO YOU THINK THAT FT EDITORIAL SENDS?

The caption changes to "Sean Speer. Munk School of Global Affairs and Public Policy."

Sean says IT'S STRIKING AS YOU SAY, STEVE, THE FINANCIAL TIMES ALONG WITH OTHER PUBLICATIONS HAVE FOR THE PAST 25 OR 30 YEARS BEEN THE CHIEF PROPONENTS OF THE SET OF IDEAS AND POLICIES THAT HAVE BEEN DESCRIBED BROADLY AS NEO-LIBERALISM. THAT AGENDA CAME ABOUT IN THE 70s AND 80s AS BHASKAR SAYS IN RESPONSE TO ECONOMIC STAGNATION THAT WAS SEEN AS BEING SHAPED BY THE GOVERNMENT OVERREACH. THAT IS THE ECONOMIES OF CANADA, THE UNITED STATES, THE UNITED KINGDOM AND ELSEWHERE WERE FACING ECONOMIC STAGNATION, STAG-FLATION AS IT WAS CALLED AT THE TIME. AND THERE WAS A VIEW THAT THE GOVERNMENT NEEDED TO BE RETRENCHED IN ORDER TO CATALYZE INNOVATION, ENTREPRENEURSHIP, WEALTH CREATION AND SO ON. AND I THINK IT'S FAIR TO SAY THAT THAT EXPERIENCE HAS PRODUCED OUTCOMES THAT ARE BROADLY POSITIVE. BUT IT'S SO IMPORTANT TO POINT OUT THAT THAT RESPONSE, THAT THAT AGENDA REFLECTED A PARTICULAR SET OF CIRCUMSTANCES IN A PARTICULAR MOMENT IN A PARTICULAR PLACE. AND WHERE I AGREE WITH BHASKAR IS THAT THOSE CONDITIONS HAVE MARKEDLY CHANGED. AND IT SEEMS TO ME THAT THAT AGENDA NEEDS TO BE ADJUSTED, RESHAPED AND REFINED TO REFLECT THE NEW AND EMERGING CHALLENGES OF OUR TICKER A. AND IT SEEMS TO ME THAT THE COVID-19 CRISIS IS ONLY ACCELERATING THE NEED FOR US TO HAVE THIS DEBATE ABOUT THE ROLE OF MARKETS, THE ROLE OF GOVERNMENT AND ULTIMATELY HOW TO CREATE THE CONDITIONS FOR BROAD-BASED ECONOMIC OPPORTUNITIES.

Steve says AND SEAN JUST TO MAKE SURE EVERYBODY IS ON THE SAME PAGE HERE WHEN WE TALK ABOUT NEO-LIBERALISM WE ARE TALKING ABOUT AN AGENDA THAT BELIEVES IN BUDGETS, FREEING THE MARKETS TO DO THEIR THING, REDUCING THE WELFARE STATE. IS THAT BASICALLY GOT IT?

Sean says THAT'S RIGHT. AND WHAT'S INTERESTING STEVE FOR CANADIAN AUDIENCES IS THAT IN A WAY CANADA HAS BEEN AT THE FOREFRONT OF THIS AGENDA IN A WAY THE 1988 FREE TRADE DEAL WITH THE UNITED STATES FOLLOWED BY THE NAFTA THAT PULLED MEXICO INTO A CONFIDENTIAL FREE-TRADE AGREEMENT WAS REALLY AT THE BEGINNING OF THIS ERA. BUT, YOU KNOW, AS MANY PEOPLE SAY, ANY GOOD IDEA CAN BECOME BAD OR FALSE WHEN IT IS DEFORMED OR EXAGGERATED. AND I THINK WHERE YOU'LL SEE AGREEMENT INCREASINGLY ON THE LEFT AND RIGHT IS THAT A PASSIVITY ABOUT SHAPING MARKET OUTCOMES NEEDS TO BE REVISITED. THE BEST, MOST CONCRETE EXAMPLE THAT WE'VE OBSERVED IN RECENT WEEKS IS OUR INABILITY TO PRODUCE PERSONAL, PROTECTIVE EQUIPMENT MOVING WITHIN OUR OWN BORDERS. THE SHIFTING OF THAT PRODUCTIVE CAPACITY TO COUNTRIES LIKE CHINA WAS THE RESULT OF DEFERENCE TO MARKETS. THE... THIS WASN'T A CASE OF MARKETS MALFUNCTIONING, IT WAS A CASE OF MARKETS DOING PRECISELY WHAT THEY DO WHICH IS TO ALLOCATE RESOURCES IN THE MOST EFFICIENT, COST-EFFECTIVE WAY. AND I THINK WHAT YOU'RE SEEING FROM THE LEFT AND RIGHT IS A RECOGNITION THAT THERE IS A ROLE FOR POLITICS, THERE IS A ROLE FOR GOVERNMENT TO SHAPE MARKET OUTCOMES IN A WAY THAT EMPHASIZES PRIORITIES BEYOND SIMPLE ECONOMIC EFFICIENCY.

Steve says BHASKAR, LET ME GIVE YOU THE NEO-LIVING AMENT WHICH IS THAT THE SHARE OF THE WORLD'S POPULATION LIVING IN EXTREME POVERTY HAS FALLEN FROM 36 percent 30 YEARS AGO TO 10 percent JUST A FEW YEARS AGO. THEY WOULD SAY THAT'S A WIN FOR OUR APPROACH. ARE THEY WRONG?

Bhaskar says WELL, I THINK IT HAS BEEN A WIN FOR DOSES OF LIBERALIZATION. BUT IF YOU LOOK WHERE POVERTY HAS BEEN REDUCED IT'S BEEN THE STATE-MANAGED AUTHORITARIAN, STATE-MANAGED LIBERALIZATION IN CHINA, THE CONTINUED DEVELOPMENT OF COUNTRIES THAT HAD DEVELOPMENTAL STATES LIKE TAIWAN, LIKE IN SOUTH KOREA. AND IN PARTICULAR, THE MASSIVE DECREASES IN POVERTY THAT OCCURRED UNDER THE ADMINISTRATION OF THE FIRST TWO MOVA TERMS, THE REPRESENTATIVE OF THE BRAZILIAN WORKERS' PARTY WHO USED HIS OWN VARIANT OF WHAT YOU WOULD CALL A GLOBAL SATURATION OF ALMOST THIRD WAY SOCIAL DEMOCRACY IN BRAZIL. SO THESE WEREN'T REALLY CLASSIC AND EXTREME EXAMPLES OF NEO-LIBERALISM. AGAIN, THAT'S KIND OF A BROAD UMBRELLA TERM THAT WE PROBABLY SHOULDN'T GET INTO TOO MANY DEFINITIONAL ARGUMENTS OVER. BUT I THINK IN ALL THESE CASES WHERE YOU SAW EXTREME DECREASES IN POVERTY, YOU SAW THE STATE PLAY A MAJOR ROLE SHAPING OUTCOMES. AND, AGAIN, THROUGHOUT THE HISTORY OF THE UNITED STATES, THE THROUGHOUT THE HISTORY OF CANADA, CAPITALISTS HAVE BEEN WILLING TO TAKE THE STATE SUPPORT. BUT THEY'VE BEEN LESS WILLING TO HAVE THE STATE SAY, OKAY, YOU JUST TOOK OUR MONEY. YOU JUST TOOK OUR SUBSIDY. YOU JUST BENEFITED FROM THIS PRICE CONTROL. NOW WE HAVE TO TELL YOU WHAT TO DO IN A WAY THAT MIGHT NOT ALWAYS BENEFIT YOUR SHORT-TERM PROFITS BUT WILL BENEFIT THE POLITY AS A WHOLE. AGAIN SOMETHING LIKE NAFTA. WELL, IF YOU ACTUALLY LOOK AT THE STATS ON NAFTA IT MIGHT BE THAT NAFTA WAS A NET BENEFIT FOR WORKERS IN CANADA AND THE UNITED STATES. BUT THE BENEFITS WERE SPREAD SO THINLY IN THE PRICES FOR CONSUMERS GOING DOWN IN A FEW THINGS. IN EMPLOYMENT SPREAD VERY THINLY. BUT IT'S ALSO DEVASTATED CERTAIN COMMUNITIES SO ABSOLUTELY THAT THAT'S CREATED UNINTENDED SOCIAL AND POLITICAL SIDE EFFECTS. AND SIDE EFFECTS WERE UNINTENDED BUT VERY PREDICTABLE. IF AND ONLY IF WE WERE THINKING ABOUT MEDIUM AND LONG-TERM CONSEQUENCES AND WE WERE THINKING BEYOND THE ECONOMIC REALM INTO POLITICAL AND SOCIAL EFFECTS OF OUR POLICY.

Steve says SEAN, IN SOME RESPECTS WE DID SEE THIS MOVE ALITTLE BIT DURING THE GREAT RECESSION WHEN WALL STREET... AMONG OTHERS... BEHAVED EXTREMELY RECKLESSLY. IT WAS THE STATE THAT HAD TO STEP IN AND HELP PEOPLE FROM THE RAVAGES OF THAT. NOW HERE IS THE STATE AGAIN RIDING INTO THE RESCUE TO PROTECT PEOPLE FROM THE RAVAGES OF THIS PANDEMIC. DOES IT SUGGEST TO YOU THAT WE'RE ABOUT TO USHER IN A... TO THE EXTENT ANYTHING IS PERMANENT IN THIS WORLD, A PERMANENT NEW ERA OF BIGGER GOVERNMENT?

Sean says I THINK THAT IS LIKELY. AND I THINK IT'S ARGUABLY JUSTIFIED. BUT LET ME BE CLEAR ABOUT THAT. I THINK I SAID EARLIER, STEVE, THAT THE AGENDA OF MARKET REFORM REFLECTED A CERTAIN SET OF CIRCUMSTANCES IN THE 1970s AND 80s. I THINK THOSE CIRCUMSTANCES HAVE CHANGED. IT'S NOT YET RONALD REAGAN, MARGARET THATCHER AND MILTON FREEMAN AND OTHERS WERE WRONG, IT'S SIMPLY THAT THE CONDITIONS HAVE CHANGED AND WE NEED TO CHANGE OUR PERSPECTIVE AND AGENDA ACCORDINGLY. IT SEEMS TO ME THE TWO TWIN FORCES THAT THEY COULD NOT HAVE PREDICTED IS THE RISE OF INTANGIBLE CAPITAL. THAT IS TO SAY AN ECONOMY THAT'S INCREASINGLY DRIVEN BY INTANGIBLE ASSETS SUCH AS YOU KNOW I LATERAL PROPERTY, SOFTWARE, AL GO SPECIAL GO RHYTHMS, SOFTWARE AND SO ON WHICH IMPACT THE PRODUCTION ECONOMY INCLUDING A TENDENCY TOWARD A WINNER-TAKE-ALL PARADIGM. THE SECOND, WHICH IS RELATED WHICH IS THE RISE OF CHINA. WHEN THIS NEO-LIBERAL AGENDA BEGAN TO TAKE SHAPE, ONE COULD ENVISION A SCENARIO OF GLOBAL COOPERATION ALONG BROADLY SMALL "L" LIBERAL LINES. BUT THE CHINESE ARE ADVANCING AN AGENDA THAT LOOKS QUITE DIFFERENT, THAT MIGHT BE CHARACTERIZED AS A TECHNOLOGICAL MERCANTALISM. AND I THINK WHAT YOU ARE SEEING IN THE U.S. AND ELSEWHERE IS POLICY MAKERS RECOGNIZE THAT THIS AMOUNTS TO A DIFFERENT ECONOMIC CONTEXT AND ONE WHICH WILL REQUIRE A DIFFERENT ECONOMIC POLICY.

Steve says WE'VE HAD TOO MUCH SCREAMING AGREEMENT BETWEEN YOU TWO SO FAR BUT I THINK I HAVE FINALLY FOUND THE SPOT WHERE YOU TWO DIVERGE AND THAT IS BHASKAR I DON'T THINK YOU THINK REAGAN AND THATCHER WERE RIGHT FOR ANY ERA AT ANY TIME, DO I HAVE THAT RIGHT?

Bhaskar says FIRST OF ALL I SHOULD NOT OBFUSCATE QUESTIONS, YES, I THINK YOU HAVE THAT RIGHT. I THINK IN GENERAL THE POLICIES OF REAGAN AND THATCHER WERE DESTRUCTIVE IN NOT JUST THE UNITED STATES BUT ITS IMPACT IN MANY OTHER COUNTRIES IN THE WORLD. BUT I WILL ADMIT THAT THE CRISIS OF THE 70s WAS REAL. THERE WAS A REAL CRISIS OF PROFITABILITY. THERE WAS STAG-FLATION. THERE WERE OTHER ECONOMIC PRICES HURTING WORKERS. I THINK THERE IS A CERTAIN VIEW ON PARTS OF THE CENTRE LEFT THAT WOULD SAY OKAY WELL, NOTHING WAS REALLY GOING ON IN THE 70s. THERE WAS NO NEED FOR ANY SORT OF ADJUSTMENTS. THE QUESTION IS WHAT KIND OF CHANGE DO WE NEED AND HOW MUCH WERE THE CRISES OF THE 70s TEMPORARILY PROBLEMS THAT COULD HAVE BEEN RESOLVED EITHER WITHIN THE OLD FRAMEWORK OR WITH TWEAKS THAT EMPOWERED LABOUR INSTEAD OF DEVALUING LABOUR. SO, FOR EXAMPLE, HOW MUCH OF THE CRISIS OF THE 70s WAS THE RESULT OF CONTINGENT THINGS LIKE THE OPEC SHOCK? WERE THE RESULT OF INCREASING INTERNATIONAL COMPETITION, THE DOMESTIC ECONOMIES WOULD HAVE ADJUSTED TO OVER TIME WERE THE RESULT OF OTHER THINGS IN THE POWER OF TRADE UNIONS. BECAUSE WE HAVE WWW.WE'VE SEEN... I DON'T KNOW THE STATS IN CANADA BUT I IMAGINE THE PARALLELS ARE PRETTY SIMILAR. WE SAW IN THE UNITED STATES THE ABSOLUTE STAG-FLATION OF WAGES DESPITE PRODUCTIVITY INCREASES AND THIS IS A RESULT OF WEAKENED UNION THE. PEOPLE ARE WORKING HARDER AND HARDER. THEY'RE MORE EFFICIENT WHEN THEY'RE AT WORK AND YET THEIR WALLS ARE STAGNATING. THAT'S ONE REASON WHY THEY TAKE OUT CREDIT CARD DEBT, WHY THEY SPECULATE IN SECOND HOMES THAT THEY'RE GOING TO MAYBE TRY TO FLIP TO MAKE SOME CASH. BECAUSE THESE ARE THE ACCESSES TO CREDIT THAT THEY HAVE. THIS IS A WAY THAT THEY CAN ACTUALLY SECURE A MIDDLE CLASS LIFESTYLE. AND I THINK THAT THE SYSTEM HAS BEEN UNABLE TO SPEAK TO PEOPLE'S VERY NOBLE ASPIRATIONS TO TAKE CARE OF THEMSELVES AND THEIR FAMILIES AND THIS HAS LED TO THINGS AND EXASPERATED PROBLEMS LIKE THE OPIOID CRISIS THAT'S DEVASTATING HUGE SWATHS OF NOT JUST THE UNITED STATES BUT CANADA AND ELSEWHERE. AND I THINK THESE ARE THE THINGS THAT NEO-LIBERALS HAVE NOT CARED ABOUT IN PART BECAUSE THAT HE JUST TALKED ABOUT INCREASING OUR AGGREGATE PRODUCTIVITY AND EFFICIENCY. EVEN THOUGH THE SPOILS OF THIS INCREASE ARE GOING TO A NARROWER AND NARROWER BAND OF PEOPLE.

Steve says SEAN, I GUESS WE SHOULD REMIND PEOPLE THAT AT THIS POINT YOU WERE AN ECONOMIC ADVISOR TO FORMER PRIME MINISTER STEPHEN HARPER DURING THE GREAT RECESSION AND SAW THAT CONSERVATIVE GOVERNMENT BRING IN SPENDING PLANS AND RUN A DEFICIT THAT WAS AT THAT TIME THE BIGGEST IN CANADIAN HISTORY. DWARFED OF COURSE BY WHAT'S BEEN GOING ON LATELY DURING THIS PANDEMIC. AND NOW THAT YOU SEE WHAT THE REACTION IS OF THIS GOVERNMENT OF CANADA, HOW SHOULD CONSERVATIVES VIEW THE ROLE OF GOVERNMENT NOWADAYS IN GOING FORWARD?

Sean says IT SEEMS TO ME THIS IS FOR THOSE ON THE RIGHT THE MOST FUNDAMENTAL QUESTION, STEVE. AND IT'S ONE I'VE BEEN GRAPPLING WITH NOT JUST IN THE CONTEXT OF THE COVID-19 CRISIS BUT REALLY SINCE THE ELECTION OF DONALD TRUMP. AS BHASKAR SAYS, I THINK WHAT THE ELECTION OF DONALD TRUMP DEMONSTRATED IS THAT THE BENEFITS OF THE ECONOMIC CONSENSUS OF THE PAST QUARTER CENTURY OR SO HAVE BEEN BROADLY DISTRIBUTED AND WE CAN DEBATE ABOUT THE EXTENT TO WHICH THEY WERE WORTHWHILE. BUT WHAT IT ALSO SHOWED IS THAT THERE WERE A CONCENTRATION OR A CLUSTERING OF THOSE WHO WERE STRUGGLING IN THIS NEW ECONOMIC ENVIRONMENT. THOSE WITHOUT POST-SECONDARY QUALIFICATIONS. THOSE WHO WORK IN SECTORS THAT WERE BEING RESHAPED BY TECHNOLOGY OR GLOBALIZATION. AND IT SEEMS TO ME THERE'S AN ONUS ON CONSERVATIVES WHO BELIEVE IN THE ROLE OF MARKETS, WHO BELIEVE IN THE LIMITS OF GOVERNMENT, TO PUT FORWARD A CONSTRUCTIVE AGENDA TO RESPOND TO THOSE LEGITIMATE CONCERNS. MORE FUNDAMENTALLY, THOUGH, IN RECENT WORK THAT I'VE DONE, STEVE, WITH THE PUBLIC POLICY FORUM AND ELSEWHERE, I THINK THE CONFLUENCE OF THE TWO FORCES I TALKED ABOUT EARLIER, THE RISE OF INTANGIBLE CAPITAL, AND THE NEW GEOPOLITICAL COMPETITION THAT HAS BEEN HASTENED AND ACCELERATED BY THE COVID-19 CRISIS BETWEEN THE UNITED STATES AND CHINA, WILL REQUIRE CANADA TO ADOPT A NEW ECONOMIC POLICY TO NAVIGATE THIS NEW WORLD. WE'RE GOING TO HAVE TO PLACE A MUCH GREATER FOCUS ON CULTIVATING SECTORS AND TECHNOLOGIES HERE WITHIN OUR BORDERS THAT CAN PARTICIPATE IN GLOBAL SUPPLY CHAINS, THAT CAN COMPETE FOR GLOBAL MARKET SHARE. AND THAT WILL NECESSARILY INVOLVE A NEW INDUSTRIAL STRATEGY IN MY VIEW. AND THAT'S DIFFERENT FROM BIG GOVERNMENT. I MEAN WE CAN HAVE A DEBATE ABOUT GOING BACK TO THE FINANCIAL TIMES' EDITORIAL ABOUT REDISTRIBUTION, THE SOCIAL SAFETY NET AND SO ON. BUT IT SEEMS TO ME THAT THE MOMENT CALLS FOR A CONSERVATIVE REALISM THAT RECOGNIZES THAT CONDITIONS ON THE GROUND HAVE CHANGED. AND THAT IT WILL REQUIRE ADJUSTMENTS TO OUR POLICY THINKING ACCORDINGLY.

Steve says I DID READ THAT PAPER YOU WROTE ON AN INDUSTRIAL STRATEGY AND THOSE WERE TWO WORDS I NEVER THOUGHT I WOULD HEAR COME OUT OF A CONSERVATIVE'S MOUTH. BUT THERE YOU GO YOU ARE MORPHING WITH THE TIMES. SHOULD WE LOOK TO SCANDINAVIA AS AN IDEA OF WHAT NORTH AMERICA SHOULD BE DOING NEXT. BY THAT I DON'T MEAN BERNIE SANDERS' PHILOSOPHIES. BUT SCANDINAVIA HAS HAD A STRONG WELFARE STATE BUT SOME FAIRLY STRONG CAPITALISM FEATURING SOME CONSERVATIVE GOVERNMENTS ALONG THE WAY. WHAT DO YOU THINK OF THAT, BHASKAR?

Bhaskar says I THINK THE SOCIAL SCANDINAVIA IS ALIVE AND WELL IN MANY INDICATESES. IN SWEDEN, IT'S STILL GOVERNED BY THAT. DENMARK GOVERNED BY THE CENTRE LEFT WHICH SUPPORTS WITH CONFIDENCE FROM THE FAR LEFT. IN FINLAND AND NORDIC COUNTRIES, IT'S GOVERNED IN PART WITH THE LEFT ALLIANCE, A FAR LEFT PARTY HAVING MINISTERS. THAT THE EDUCATION MINISTER, LEIF ANDERSEN IN THAT GOVERNMENT. SO I THINK THAT THESE GOVERNMENTS ARE STILL ORIENTED IN SUCH A WAY THAT THAT HE PRIORITIZE ADVERTISE WHATEVER MIX OF POLICY HAVE AT THE END RESULT THE PRESERVATION OF A WELFARE STATE AND THE WELL-BEING AND ADVANCEMENT OF THEIR WORKING CLASSES. AND THAT'S WHAT I WANT AS A LEFT WINGER. I DON'T JUST HAVE A KNEE-JERK SUPPORT OF EVERY SINGLE TARIFF, EVERY SINGLE HEAVY-HANDED STATE INTERVENTION IN THE ECONOMY. I ONLY SUPPORT THOSE POLICIES THAT WILL ADVANCE THE INTERESTS OF WORKING CLASS PEOPLE. AND, FOR EXAMPLE, IN THE NORDIC COUNTRIES, THEY'VE TRADITIONALLY BEEN VERY RELIANT ON EXPORTS. THEY HAVEN'T BEEN IMPOSING A TON OF TARIFFS. THEY'VE BEEN WILLING TO SAY OKAY SOMETIMES YOU NEED TO PROTECT CERTAIN INDUSTRIES AND SOMETIMES YOU JUST HAVE TO LET THEM COMPETE. I'M FINE WITH ALL OF THAT. I'M FINE WITH FINDING THAT POLICY MIX. AS LONG AS WE THINK ABOUT OUR END RESULT OF OUR POLITICS BEING THE UP LIFT OF WORKING CLASS PEOPLE AND NOT JUST THE PURSUIT OF THESE ABSTRACT NUMBERS OF WEALTH AND EFFICIENCY AND WHAT NOT EVEN IF THE GAINS IN THIS EFFICIENCY ARE ONLY GOING TO A VERY, VERY SMALL GROUP OF PEOPLE AT THE TOP.

Steve says SEAN, IN WHICH CASE I REALLY NEED TO GET A BETTER UNDERSTANDING OF WHERE YOU THINK CONSERVATISM TODAY DIVERGES FROM WHAT BHASKAR IS TALKING ABOUT. AS YOU WE ARE POINTING OUT WARE HEARING A LOT OF AGREEMENT BETWEEN YOU TWO WHICH I DIDN'T THINK WE WOULD. SO WHERE DOES COP CERTIFY IVELY DIVERGE NOW?

Sean says LET ME SAY TWO THINGS AND I WILL BE AS BRIEF AS I CAN. FIRST OF ALL I THINK WE'RE GOING TO HAVE TO HAVE A MORE FOCUSED, MORE INTENTIONAL INDUSTRIAL POLICY TO CULTIVATE INDUSTRIAL CAPACITY HERE WITHIN OUR BORDERS TO BE ABLE TO COMPETE IN THE GLOBAL ECONOMY WHERE THE REWARDS TO SCALE ARE STRONGER THAN THEY'VE EVER BEEN BEFORE BECAUSE OF SOME OF THE ISSUES I DESCRIBED EARLIER. SECONDLY, THOUGH, AND THIS IS I THINK AN IMPORTANT DISTINCTION. IT SEEMS TO ME THAT THE BIGGEST OBSTACLE THAT BHASKAR HAS ENVISIONED FOR RENEWED COMMITMENTS TO SOCIALISM IN WESTERN COUNTRIES IS ARITHMETIC. HERE IN CANADA, THE DEFICITS THAT WILL BE RUN BY OUR FEDERAL GOVERNMENT AND THE PROVINCES THIS YEAR ARE LIKELY TO EXCEED 20 percent. OUR PROVINCES ARE ALMOST ACROSS THE BOARD ARE ALREADY UNSUSTAINABLE. IN TERMS OF THEIR FISCAL CAPACITY OVER THE LONG TERM. AND THAT'S LARGELY DRIVEN, STEVE, AS YOU KNOW, BY OUR AGING DEMOGRAPHICS. IN SHORT WE'VE ATTACHED ONE OF OUR MOST DYNAMIC SECTORS THAT, IS MEDICINE TO OUR FASTEST GROWING POPULATION THAT IS SENIORS. AND THAT COMBINATION, THE CONFLUENCE IS PUTTING ENORMOUS PRESSURE ON GOVERNMENTS' FISCAL CAPACITY. SO IT SEEMS TO ME THESE CONDITIONS WILL PRECLUDE LARGE SCALE ENTITLEMENT REFORMS TO EXPAND THE ROLE OF GOVERNMENT IN OUR SOCIETY. IF ANYTHING, THE COVID-19 CRISIS WILL MAKE IT EVEN MORE CHALLENGING TO COVER THE COSTS OF OUR PREVIOUS COMMITMENTS. AND I THINK THAT'S THE BIGGEST OBSTACLE STANDING IN THE WAY OF THE EXPANSION OF GOVERNMENTS THAT BHASKAR AND OTHERS WOULD LIKE TO SEE COME OUT OF THIS CRISIS.

Steve says WELL, BHASKAR, LET ME ASK YOU TO FINISH UP ON THAT. WE'VE GOT ABOUT A MINUTE LEFT T 90 YEARS AGO WE HAD A GREAT DEPRESSION AND WHAT EMERGED FROM THAT WAS FRANKLIN ROOSEVELT'S NEW DEAL. WHAT DO YOU SUSPECT WILL EMERGE FROM THE CURRENT RECESSION/DEPRESSION WE'RE IN THE MIDST OF NOW?

Bhaskar says SO WE HAVE OUR IMMEDIATE CRISIS AS EVERYONE CAN SEE. THE CORONAVIRUS CRISIS, HOSPITAL CAPACITY GETTING OVERRUN IN CERTAIN AREAS AND WHAT NOT. EVERYONE CAN SEE THAT. WE ALSO CAN SEE THE ECONOMIC FALL OUT OF THE LOCK DOWN. BUSINESSES SHUTTERING, SMALL BUSINESSES THAT HAVE DRIVEN A LOT OF EMPLOYMENT IN BOTH THE U.S. AND CANADA ARE ON THE BRINK. THEN, OF COURSE, THE RESPONSE IS MASSIVE GOVERNMENT STIMULUS, MASSIVE GOVERNMENT BAIL OUTS. A HUGE, NEW ROLE FOR THE STATE. I THINK PEOPLE NOW ARE STARTING TO SEE THAT WHEN THE STATE WANTS TO ACT, THE STATE CAN ACT. AND IT'S VERY HARD IN COUNTRIES WHERE THERE'S STILL PERSISTING POVERTY, WHERE THERE'S STILL DECLINING DEINDUSTRIALIZATION AND ALL THESE OTHER PROBLEMS PEOPLE ARE FEELING TO JUST GO BACK TO THE WORLD WHERE THE STATE JUST SAID THESE PROBLEMS ARE TOO BIG, WE CAN'T HANDLE IT. BECAUSE IN OUR LIFETIMES WE WOULD HAVE SEEN GOVERNMENT WRITING PEOPLE CHEQUES. WE WOULD HAVE SEEN GOVERNMENT PROPPING UP BUSINESSES. AND I THINK HOPEFULLY PEOPLE LOOK AT THE SLOW MOVING CRISES THAT THEY ARE DEALING WITH, LOOK AT POVERTY AND HUNGER. LOOK AT JUST GENERAL MALAISE AND DESPERATION AND SAY THESE ARE OUR STATE MANAGERS AND WE WANT OUR DOMESTIC ELITE TO FEEL, TOO. AND WE WANT ACTION. I THINK THE PRESIDENT OF LARGE-STALE STATE INTERACTION ISN'T GOING AWAY. AND IF WE DO NEED THE TYPE OF SHARED SACRIFICE THAT SEAN WAS TALKING ABOUT, THEN WE NEED TO MAKE SURE THAT WE'RE GOING TO UNIONS, WE'RE GOING TO WORKING CLASS PEOPLE AND WE'RE SAYING, OKAY, HERE'S THE BARGAIN: YOU MAY BE DIMINISH YOUR WAGE DEMANDS HERE AND HERE. BUT WE'RE GOING TO CREATE A KIND OF SYSTEM THAT WILL BENEFIT YOU IN THE LONG RUN OR WILL EMPOWER YOU IN THE LONG RUN. WE WON'T PULL THE BAIT AND SWITCH THAT WE DID IN THE 70s AND PEOPLE SHOULD HAVE NO REASON TO BELIEVE THAT CONSERVATIVES WILL BE MAKING A FAIR AND EQUAL BARGAIN WITH PEOPLE ON THE FRONT LINES.

The caption changes to "Producer: Eric Bombicino, @ebombicino."

Steve says GENTLEMEN THAT'S OUR TIME. I WANT TO THANK BHASKAR SUNKARA AND SEAN SPEER FOR JOINING US ON TVO FOR A REALLY GREAT CONVERSATION. BE SAFE YOU TWO, THANKS SO MUCH.

Sean says THANKS, STEVE. THANKS.

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