A Defense of the Neoliberal Order with Glenn Hubbard + Big Tech Antitrust Bills

Episode Summary

Executive Summary: The episode debates whether neoliberal capitalism can be salvaged by shifting from "walls" to "bridges": preserving openness while better helping workers and communities adapt to disruption from trade and technology. Glenn Hubbard defends market openness, targeted social insurance, training, and competition policy, while Bethany McLean and Luigi Zingales press him on whether these ideas are concrete enough without more intervention in markets.

Main Topics: Neoliberalism, openness, and the need for a new framing (Priority: 5/5): Hubbard argues the old open-market order remains valuable but must be reframed to acknowledge disruption and provide support for those harmed by change. He says the political response has too often been walls rather than bridges. Bridges vs. walls: worker adjustment and social insurance (Priority: 5/5): The discussion centers on practical responses to trade and technology shocks, including community colleges, retraining, place-based aid, earned income tax credits, wage insurance, and re-employment accounts. Trade, China shock, and technology-driven job loss (Priority: 4/5): Participants debate whether globalization or technology is the bigger cause of labor-market disruption, and whether policymakers should have slowed Chinese import competition or shaped trade more aggressively. Antitrust, platforms, and market power in Big Tech (Priority: 5/5): The conversation examines whether Google, Amazon, Meta, and similar firms pose a unique concentration problem, and whether remedies should focus on breakup, data rights, or restrictions on self-preferencing. The role of the state in research and innovation (Priority: 3/5): Hubbard supports more basic and applied research funding, but opposes heavy-handed government direction of research priorities, favoring peer review and decentralized allocation. Political realignment and the critique of protectionism (Priority: 4/5): Hubbard sharply criticizes Oren Cass-style Republican protectionism as a mistaken attempt to preserve specific jobs rather than support competition, adaptation, and broad prosperity. Moral foundations, economics, and dignity through work (Priority: 4/5): A recurring theme is that economics should restore moral and social dimensions, treating work as a source of dignity rather than replacing it with cash transfers alone.

Key Arguments: Openness to trade and technology still creates wealth, but the political system must address the disruption it causes rather than promise to stop change. Growth and disruption are inseparable; politicians cannot credibly promise more growth without adjustment costs. The best response is not blanket protectionism but targeted "bridges": education, training, wage support, and community-focused aid. Older labor-market policies are mismatched to today’s anxieties because they were designed for temporary downturns, not permanent structural change. Place-based aid can work, but only when tied to real jobs and local business demand; cosmetic revitalization is insufficient. Older workers displaced from manufacturing may need wage insurance and long-term support, not just retraining. Neoliberalism lost legitimacy by stripping away Smith’s moral and social guardrails; a better liberalism should combine markets with fairness, community, and public goods. Antitrust should remain focused on consumer welfare and competition, but modern digital platforms may require stronger attention to data control, self-preferencing, and bottlenecks. Big tech dominance is not necessarily permanent, but it can be self-reinforcing and may warrant scrutiny even without immediate breakup. The state should fund basic and applied research more robustly, but not micromanage direction because politics invites rent-seeking. Protection of specific jobs is the wrong goal; policy should support people, competition, and labor-market participation instead. The rhetorical claim that regulation should wait because the economy is weak is a sophistical argument that would prevent any regulation at any time.

Data Points: Google search share: 98% - Used to illustrate the scale of Google’s dominance in search during the antitrust discussion. Harvard legacy share: 36% - Mentioned by Bethany McLean as an example of hypocrisy in elite institutions while discussing social justice and reform. Steel tariffs meeting: 2001 - Glenn Hubbard referenced arguing against steel tariffs to President George W. Bush while chairing the Council of Economic Advisers. Years since the Romney campaign context: 10 years - Bethany McLean noted her earlier book came out in 2012, around the Mitt Romney campaign, to show how long these debates have been building. Generations of job change: 30 or 40 years - Hubbard noted that many current students want jobs that did not exist 30 or 40 years ago, highlighting labor-market transformation. Research support mechanism: Peer review via NIH/NSF-style allocation - Hubbard described how basic research should be funded through established peer-review institutions rather than political direction. Book/program reference: American Innovation and Choice Online Act - The hosts used the pending antitrust bill as a case study in regulating dominant digital platforms.

Pivotal Quotes: "We have socialism for the very rich, rugged individualism for the poor." — Luigi Zingales: Opening framing of the podcast’s critique of how capitalism treats different classes differently. "I do consider myself at least a recovering neoliberal, if not still one. My mission in the book is to put liberal back into neoliberalism." — Glenn Hubbard: Hubbard’s self-description and central thesis about revising neoliberalism rather than rejecting markets outright. "The only choice is to try." — Glenn Hubbard: His response to the problem of displaced workers and the limits of perfect solutions.

Implications: The episode suggests capitalism’s future depends on pairing openness with stronger worker support, smarter antitrust, and a more moral public philosophy. The unresolved tension is whether these bridges can be built without sliding into protectionism.