In Defense of Main Street
The GOP has long been the party of Sam’s Club, opposing regulations that push prices up. But Americans want better jobs, not just cheap T-shirts. Edward Glaeser reviews “The Great Equalizer” by David M. Smick.
The election of Donald Trump, and the continuing popularity of Bernie Sanders, have demonstrated that mainstream policies have failed to satisfy struggling Americans. The center-right’s traditional prescriptions for economic well-being, such as leaving markets alone and investing in education, seem like small beer to the distressed parts of America. The left’s alternative to wan centrism was Mr. Sanders’s full-throated embrace of European-style social democracy. But what can conservatives offer that might win more votes than the laissez-faire policies they’ve been proposing?
Beginning in 2005, Ross Douthat and Reihan Salam began championing a “Sam’s Club Conservatism” that would focus on the needs of working-class voters with policies like expanding child tax credits, cutting payroll taxes for lower-income workers and even providing wage subsidies. Their ideas were thoughtful and compassionate, but they have failed (so far) to find a successful champion in the political arena. David Smick’s “The Great Equalizer: How Main Street Capitalism Can Create an Economy for Everyone” also aims to present a model for Republicanism and for U.S. policy making more broadly. Mr. Smick’s 2008 book, “The World Is Curved,” correctly warned (as the subtitle had it) about “Hidden Dangers to the Global Economy.” In this new work, he celebrates American entrepreneurship and aims to find ways to unleash it.
American new-business formation has plummeted, Mr. Smick notes, and that is a big problem. He juxtaposes “Main Street Capitalism”—that is, the capitalism of mom-and-pop shops, small banks and Joy Mangano’s Miracle Mops—with “a corporate capitalism of inside deal-making, elite special privilege and dominance by large institutions.” Corporate capitalism has, in his view, “exerted a stranglehold over the U.S. economy.” Mr. Smick’s alternative echoes some ideas found in Luigi Zingales’s excellent “A Capitalism for the People” (2012), as well as the robust anti-corporatism advocated by Edmund Phelps in “Mass Flourishing” (2013).
Many of the author’s proposals to increase entrepreneurship are quite sensible. He favors comprehensive immigration reform in order to convince future Einsteins, Picassos and....
Edward L. Glaeser is the Glimp professor of economics at Harvard University, a senior fellow at the Manhattan Institute, and contributing editor at City Journal.
This piece originally appeared in The Wall Street Journal