Gove extolled the need for the Government to “learn quickly, adjust and respond”. But the best economic mechanism we have for rapid adjustment to changed circumstances is, in fact, a market economy, driven by profit and loss. As lockdowns end we need businesses and workers to reorganise according to their new realities. “The times demand” policies that: make workers cheaper to hire, remove barriers to changing jobs, encourage reskilling or retraining, incentivise private investment or innovation in making existing businesses safe, allow premises to be repurposed, and remove barriers to entrepreneurs finding new ways to serve our wants and needs.
Crises require new thinking. What you regard as optimal in normal times is not when unusual emergencies hit. The Government understood this with the furlough programme. But now they appear to see the pandemic as a mere inconvenience to getting on with their old agenda, with little thought given to the specifics of the moment. The fact that the Government saw suspending Sunday trading laws as going too far, but think state-led rebalancing of the country’s economy should begin now perhaps best exemplifies the odd mix of hubris and misdiagnosis.
In his best speech line, Gove admitted: “we need to understand that complex, adaptive systems demand respectful attention, not glib assertions of mastery”. He was talking about the biosphere. But the government would do well to heed the lesson on our current economic plight.
Ryan Bourne holds the R Evan Scharf chair for the public understanding of economics at the Cato Institute