The challenge of Covid-19 is that it is two crises at once. While medical personnel try to contain this public health scourge, central bankers and economic policymakers have been fighting on the economic front. So far, large fiscal and monetary stimulus have staved off deeper economic woes and there are green shoots of recovery emerging.

But even if the virus is under control, the economic fight will be far from over. The severe economic shock from the pandemic, combined with macroeconomic paradigm shifts in motion since the Global Financial Crisis in 2008, has seen policymakers — who were for decades trained in the way of the free market — become less resistant to economic intervention.

At the heart of the previous economic orthodoxy was Austrian economist Joseph Schumpeter’s idea of creative destruction, which suggests that unviable businesses deserve to fail and be displaced.

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