Covid has forced a neoliberal retreat. But state intervention isn’t always progressive | Laurie Macfarlane

We may be seeing the rise of a new authoritarian capitalism shielded from democratic scrutiny

Thirteen years after the financial crisis put the global economy on life support, neoliberal capitalism is facing an existential crisis. The Covid-19 pandemic has exposed the disastrous consequences of decades of privatisation, deregulation and outsourcing. In order to contain the economic fallout from the pandemic, western countries have ripped up the neoliberal playbook.

Market forces have been shunned in favour of regulatory controls and state intervention. Central banks have broken the ultimate economic taboo and are printing money to finance ballooning budget deficits. For the first time in decades, the direction of travel for corporate tax rates is up rather than down. Even the International Monetary Fund (IMF) has thrown its weight behind wealth taxes. As Guardian columnist Larry Elliott recently put it: the era of small states, low taxes and balanced budgets suddenly looks to be over". The question remaining is: what is replacing it? In the UK, a number of recent developments provide some clues.

Laurie Macfarlane is economics editor at openDemocracy and a fellow at the UCL Institute of Innovation and Public Purpose. He is co-author of Rethinking the Economics of Land and Housing