A Crisis Shows the Value of Big Government and Big Business

Americans tend to like their institutions small. On the political right, many are distrustful of big government, preferring private initiatives, competitive markets and localism. On the left, there is deep suspicion of the power of large corporations. And Americans of all stripes tend to lionize individuals who take on the system -- the plucky entrepreneur who outmaneuvers hidebound industrial giants, the grassroots activists who force the system to change and so on. Economists who study the importance of institutions have all too often been brushed aside by those who are in love with markets.

But the Covid-19 pandemic may give Americans a new appreciation for the importance of big organizations. Both big government and big business have the ability to mobilize resources on a vast scale that small upstarts or grassroots initiatives can never match. And both big government and big business possess deep reservoirs of human capital that would be far less effective in atomized form.