In this report, “COVID-19 and the End of Laissez-Faire Globalization,” Open Markets Fellow Beth Baltzan asserts that production shortages caused by the COVID-19 pandemic can only be effectively solved by enacting policies such as enforceable labor standards and rules prohibiting anti-competitive behavior, thereby creating a marketplace that fosters fair competition.

The report looks at how for many decades, the U.S. has relied almost exclusively on the private sector to make production and source decisions. The private sector’s goal has to been to reduce costs and maximize profits, including through mergers and offshoring. This approach has resulted in a net reduction of global capacity. It has also resulted in geographical concentration of production.

This model is essentially a modern take on the laissez-faire approach that New Deal policymakers rejected. Under laissez-faire rules, reflected in modern times in the neoliberal model, the role of government is to protect capital holders, not to intervene in markets.

As a result, the government does not protect competition itself and has opened the door to anticompetitive behavior even by governments.

Ultimately, this report argues that if we really want to solve the problem of shortages of life-saving equipment, we must go back to the original vision of the system and rebuild the rules to promote fair competition. That will encourage sufficient global capacity, promote geographical diversification of supply — and better serve humanity.

Read full report below or download here.