For some on the left, the economic breakthrough brought on by the pandemic was the general consensus, not least among economists, for an astonishing increase in fiscal spending. Relative to the economy’s size, the stimulus introduced so far in the US is already double (in Canada triple) what it was during the 2008-09 crisis, with more to come. And the stimulus in that earlier crisis was the largest since the Second World War, leading the OECD to declare that the earlier intervention “now seems like a small-scale rehearsal for the [present] disruptions to our socioeconomic system.”

The insistence by the adherents to Keynesianism and Modern Monetary Theory that there is generally more room for increases in public spending than governments let on, especially during deep crises, is valid. Their conclusion that something fundamental and perhaps permanent has changed in terms of looser spending constraints is seductive—it would indeed make things easier if all that was needed was to elect the right people and have them print money to meet popular priorities. But this obscures the most basic political questions of class and power under capitalism.

Spending our way to the good society?

Though central banks can lever the supply of money, this still depends on reverberations throughout the private sector. Financial institutions must want to lend, and so, generate an increase in the effective money supply. Corporations must want to borrow and invest. The alternative of the state itself doing the spending, and thereby replacing private institutions in choosing and carrying out priorities, directly challenges capitalism’s foundations—taking us a good deal beyond simply gearing up the money presses.

Moreover, the apparent contradiction between earlier pressures to restrain fiscal expenditures and the current profligacy actually includes an underlying consistency: reproducing the conditions for capitalist success. The shift to the high levels of government spending didn’t signal a permanent new paradigm for running a capitalist economy. It wasn’t the result of organized pressure from below or a sudden moral or conceptual conversion at the top. Rather, it was primarily imposed by the nature of the crisis and the conservative goal of returning to the earlier trajectory.

There is in a sense not one ‘bourgeoise’ economics but two: one economic theory or logic for normal times and another, with different tools and mechanisms, for times of deep crisis. The pandemic could only be overcome through temporarily keeping workers away from work, which required giving them funds to survive without employment (a contrast with 2008-9 when subsidies generally ignored ‘main street’). And the business infrastructure could only be saved for a ‘later’ revival with more loans and handouts. It was these two factors—keeping workers at home and businesses liquid—that brought on the remarkable degree of fiscal stimulus.

At bottom, how societies determine the allocation of their labour and resources—who is in charge, what the priorities are, who gets what—rests on considerations of social power and corresponding values and priorities. Transforming how this is done is conditional on developing and organizing popular support for challenging the private power of banks and corporations over our lives and with this, accepting the risks this entails. Controlling the money presses is certainly an element in this, but hardly the core challenge.

The present stimulus may indeed continue for a while. The fear of a second infection wave, the related fragility of the economy, and a concern, as well, to contain heightened social unease may be enough to sustain the stimulus through the rest of this year and perhaps the next. Moreover, the electoral costs to parties of the center-left of their past complicity in austerity teach the priority of limiting fiscal restraint as part of winning back and consolidating their former base. This may further support the unprecedented levels of fiscal spending for a period that extends into the likely Biden presidency.