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Isabella M. Weber
Says More…

This week in Say More, PS talks with Isabella M. Weber, Assistant Professor of Economics at the University of Massachusetts Amherst and the author of How China Escaped Shock Therapy: The Market Reform Debate.

Project Syndicate: In May, you and Karsten Neuhoff argued that Europe should already be pursuing a comprehensive policy response to the possibility that Russia will cut off gas supplies. Such a response – as you recently outlined in a policy brief for the German Institute for Economic Research – would start with voluntary saving schemes. During the COVID-19 pandemic, efforts to convince the public to make sacrifices for the public good had mixed success. How should the pandemic experience inform European efforts to prepare for a potential gas shortage?

Isabella M. Weber: We are living in a time of overlapping emergencies: the pandemic is not over, climate change is a reality, and geopolitical stability has reached a nadir. This requires us to reimagine economic policymaking as a form of disaster preparedness. We need to be able to employ both market and non-market coordination to respond to the shocks that inevitably occur as crises multiply.

Such coordination has occurred during the pandemic. Global markets were crucial to increasing the supply of critical goods, such as masks, and to bringing down prices rapidly (after their initial spike). At the same time, there was no “voucher market” for mask-wearing; instead, there were binding social commitments, established and enforced by the state.