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Getting Productivism Right

Establishing new economic-policy paradigms requires developing novel approaches, not just emulating the old. If productivism is to be successful, it will have to move beyond conventional social protection, industrial policies, and macroeconomic management.

CAMBRIDGE – I wrote recently about the possible emergence, from both the left and right of the political spectrum, of a new economic-policy paradigm that could supersede neoliberalism. The new framework gives governments and community organizations greater responsibility to shape investment and production – in support of good jobs, the climate transition, and more secure, resilient societies – and is much more suspicious of markets and large corporations than the outgoing paradigm is. I called it “productivism,” though others can no doubt think of sexier appellations.

Throughout history, the pendulum of economic ideology has swung from deification of markets to reliance on the state and then back again. Superficially, we appear to be in the midst of another periodic realignment. It was perhaps inevitable that neoliberalism’s excesses – increased inequality, concentration of corporate power, and neglect of threats to the physical and social environment – would trigger a backlash.

But establishing new paradigms requires developing novel approaches, not just emulating the old. When the New Deal and the welfare state replaced the freewheeling capitalism that preceded them, policymakers did not simply revert to former mercantilist practices. They established new regulatory regimes and social-insurance institutions, and embraced explicit macroeconomic management in the form of Keynesianism.