PRINCETON – Our world has become both confusing and confused. The international economy works well, but the political economy is mired in hostility toward markets, frustration at globalization, and skepticism about growth. Each of these beliefs interacts with, and reinforces, the others. Even large segments of the global elite are wringing their hands over the perceived failures of markets, globalization, and growth.
It is easiest to see where the hostility toward markets came from. Markets depend on prices, but prices have become a source of anxiety and puzzlement for many people. Not only have prices risen, but many twenty-first-century marvels have no obvious price at all. Consumers are now accustomed to universal internet connectivity and freely available services like search engines. They can download or stream an infinite supply of entertainment, and they are saturated in news media – most of which they do not pay for (at least not in any traditional sense). In many countries, people also receive medical services apparently for free. Even America’s notoriously expensive health-care system handed out COVID-19 vaccinations and tests.