The free market is dead. What comes next?

WHEN THE COVID-19 PANDEMIC STRUCK, WORLD MARKETS came to a standstill. Governments around the world froze as much in-person economic activity as possible and opened their wallets to spend unprecedented sums of money to replace lost income. In the U.S., Republicans and Democrats agreed to invest record sums, nearly 20% of GDP. For the second time in 12 years, free markets had broken down, and government stepped up.

If the message wasn’t clear before, it’s now become impossible to miss: Government steps in when the going gets rough, ensuring that wealthy risk takers will be bailed out in the worst of times. Markets don’t exist before the state does, and the state doesn’t intervene in their natural work. But the state makes markets possible.

We are witnessing the most profound realignment in American political economy in nearly 40 years. President Ronald Reagan summed up