Interview by Zephyr Teachout

Shocks expose the strength of a system, or its weaknesses. With the threat of a global pandemic, the fault lines in our health-care system and our broader economy are becoming clearer.

While I was, throughout January and early February, ignoring the coronavirus and telling people not to get panicked, I noticed that Matt Stoller, the author of the recent book Goliath: The 100-Year War Between Monopoly Power and Democracy , was constantly bringing it up, suggesting that it could upend the world as we know it and that we should stop making political predictions without taking into account the impact of a pandemic.

And so, when the stock market started crashing, I called Stoller. We had a wide-ranging conversation that quickly led to how the Chicago School consumer welfare paradigm — which posits that the only reason a monopoly should ever be considered harmful is if it raises prices and harms consumers — is making all of us less safe this year, and how we should rethink industrial policy around ideas like productive capacity.

For Stoller, the coronavirus is deadly not just because of its infectiousness, but because of the way we have spent forty years — since Ronald Reagan — building a system that is designed to pay out big profits to financiers, and that is fragile and capable of quick collapse.

His big message to the Left is that we need to get ahead of the crisis through rewriting the rules of financial markets and making major investments in domestic manufacturing capacity. The coronavirus, he argues, is making the argument for antitrust — single sources of supply for all kinds of suddenly essential medical needs are leading to shortages and could cause huge price jumps.

In other words, the coronavirus is exposing a major foundational myth at the heart of Chicago School thinking: that efficiency, maximalist free trade policy, and the consumer welfare standard are stable systems. All lead to short term profits and long term risk. We should replace those with a more diverse and stable set of economic values: redundancy in supply chains, diversity in production locations, productive capacity, and universal programs.

And because this pandemic is serious — and won’t be the last — we need to act quickly.