An Uncertain Bridge.

• Author: Kowalski, Daniel

The Wall and the Bridge: Fear and Opportunity in Disruption's Wake

By Glenn Hubbard

248 pp.; Yale University Press, 2022

For decades, political leaders have focused on building "walls" rather than "bridges," obstructing market exchange rather than facilitating it. Columbia Business School dean emeritus Glenn Hubbard has observed firsthand that walls are politically hard to resist. As chairman of the President's Council of Economic Advisers from 2001 to 2003, he advised against imposing steel tariffs in 2001, but President George W. Bush rejected that advice. Hubbard also observed the effects of deindustrialization on workers and communities in Youngstown, OH as part of his economic research. Instead of helping workers adjust to disruptive economic forces, politicians tried to wall off those forces with public policies. In the long term, that neither helped the communities nor built support for free markets and capitalism.

Hubbard suggests the failure of policy to adequately respond to displacements caused by technological change and glo balization has led to the rise of populism and diminished public belief that the market economy creates broad prosperity. He argues for bridges--public policies to help displaced workers--to replace the walls and renew support for capitalism.

Returning to the game I In Hubbard's telling, Adam Smith understood the importance of bridge-building. Smith thought of himself first as a moral philosopher and viewed the economy as a moral system of flourishing. Smith wanted to promote the happiness of everyone in the nation, not just the elites, Hubbard (and others) notes. Such mass flourishing results from "inclusion, mutual ties, and mutual support"--bridges--that help those on the margins participate in the market.

Dynamism leads to economic gams but results in disruption that unavoidably produces winners and losers. Mass flourishing requires that the losers return to the game --that they rejoin the economy in some new productive role. Their failure to do so may undermine the entire enterprise and violates an implicit moral precept that the winners compensate the losers. While some economists have thought about how to do this (Hubbard cites the late Cambridge economist Nicholas Kaldor's work in particular), the economics profession in the post-World War II period did not focus on this because extraordinary economic growth was assumed to be the rising tide that lifts all boats.

Hubbard's policy prescriptions...