Free-market economics leads to great outcomes for the rich, but pretty miserable outcomes for everyone else.
… The problem with both free-market and Keynesian economics is that they misunderstand the nature of modern investment. Both schools believe that investment is led by the private sector, either because taxes and regulations are low (in the free-market model) or because aggregate demand is high (in the Keynesian model).
Yet private-sector investment today depends on investment by the public sector. Our age is defined by this complementarity. Unless the public sector invests, and invests wisely, the private sector will continue to hoard its funds or return them to shareholders in the forms of dividends or buybacks.
… without universal access to public investments in human capital, societies will succumb to extreme inequalities of income and wealth.
governments everywhere must invest in new kinds of intellectual capital to solve unprecedented problems of public health, climate change, environmental degradation, information systems management, and more.
… governments need to learn to think ahead. This, too, runs counter to the economic mainstream. Free-market ideologues don’t want governments to think at all.
… all countries now need more than five-year plans; they need 20-year, generation-long strategies to build the skills, infrastructure, and low-carbon economy of the twenty-first century.