The corona crisis has an enormous impact on the economy. How can and should governments respond to this? Prof. Rutger Claassen (Philosophy and Religious Studies) breaks down the situation in a lecture for Studium Generale.

Trilemma

Claassen describes this question as a trilemma. In a trilemma, one faces a choice that has an impact on three different values: in this case, the lives or existence of people and companies, their liberty, and their responsibility. Any choice that the government makes can only secure two of these values; one has to be sacrificed. For example, in our free market philosophy, the government offers no support: this safeguards companies’ liberty and responsibility, but their continuity cannot be guaranteed.

Too important to fail

This free market philosophy was quickly discarded as the corona crisis caused a massive drop in economic activity. Currently, governments take over the risk that companies normally face by financially supporting them because they are ‘too important to fail’. This strategy sacrifices the responsibility of companies, but also comes with other dangers: Claassen emphasises that future generations will have to pay back the debts that are currently created.