WASHINGTON, DC — Wednesday afternoon, the Kennedy Caucus Room room was filled in the Russell Senate Office Building. Hill staffers, think tankers, and journalists all came to hear four senators — Sens. Tom Cotton (R-AR), Todd Young (R-IN), Marco Rubio (R-FL), and J.D. Vance (R-OH) — speak about a new policy handbook from the conservative think tank American Compass titled Rebuilding American Capitalism.
But if you thought this handbook would be filled with suggestions to cut taxes, slash regulation, and lower prices, then think again.
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American Compass burst on the scene a few years ago with a new vision for what its founder, Oren Cass, terms “conservative economics.” While it has certainly made a splash, whether it truly represents prudent policy is another question.
Cass explains the concept in two points.
First, he posits that we must look at the market as a tool to achieve a particular end, a substantive good. In America, for example, it should be relatively uncontroversial to say we value strong families, communities, and religious institutions. Cass points out that the market is there in order to strengthen that which makes us a healthy society.
Second, he argues that markets alone will not achieve that end. In Cass’ mind, where the interests of the market and the interests of the common good do not align, we can consider that a market failure. As such, it means the government must intervene in order to set rules of the game that will orient the market toward the common good.
In other words, Cass contends that the market is not of value in and of itself, but rather only insofar as it can help us create our ideal society. And where we judge it does not do so successfully, the government should adjust it as needed.
The appeal of this type of economics stems from the observation that something has gone deeply wrong in American society over the past 60 years. With declining rates of marriage, churches emptying out, fewer men in the workforce, and civil society institutions crumbling — leading to unprecedented rates of depression and loneliness — conservatives are rightly looking around and asking a simple question: What happened, and how can we fix it?
The handbook lays out a practical plan to address what has gone wrong, with more than 25 specific proposals broadly split into two sections titled “Productive Markets” and “Supportive Communities.” Some are common sense. For example, “promoting non-college career pathways” is a positive step, and setting up a system to verify age for certain websites does not sound too outlandish.
However, looking at some of the other key proposals paints a far different picture.
Among the most controversial are plans to, “Eliminate the trade deficit” through a global tariff that will start at 10% and then be “adjusted automatically each year based on” the trade balance and, “Make all jobs ones that Americans will do” by cutting low-skill immigration and even significantly reducing high skilled immigration through H-1b visas. Additionally, the handbook recommends making it illegal to list a bachelor's degree as a requirement for private-sector jobs and banning minors from posting pictures on social media.
If you think this sounds similar to progressive proposals for social engineering through public policy, then you would be correct. Behind the interesting philosophical discussions about the role of government in society and the shifting intellectual currents of the Right is a genuine desire — similar to that of progressives — to shape society from the top down using the blunt force of government.
But humility is a crucial conservative virtue. Each day, we see the unintended consequences of government attempts to “solve” problems.
President Lyndon B. Johnson tried to eliminate poverty, but instead enshrined into law policies that disincentivized family formation and work for decades to come. Rent control laws try to make housing more affordable, but instead constrain supply and actually make prices rise. COVID-19 vaccine mandates were put into place to try and protect people, but instead turned out to be based on faulty premises and unjustly imposed burdens on those who decided not to receive the vaccine.
Common to each of these examples is the recognition of a real problem, the belief that there must be a one-size-fits-all “solution,” but then the ultimate realization that humans do not have the capacity to understand all the consequences of their decisions prior to making them. Moreover, it is quite easy to tear down social conventions and societal standards through government policy, but it is almost impossible to build them back up through it. Rather, that has to come from the bottom, up.
To believe one entity such as government can solve such problems would be to buy into what Thomas Sowell calls the “unconstrained vision” of society, which rejects the idea human nature is such that there are some things we are simply incapable of doing and engineering.
An objection could be, and has been, raised, pointing out that we already tax, subsidize, and incentivize certain activities in a wide range of ways. Therefore, the proposals of organizations such as American Compass are simply aiming to shift those in ways more beneficial for the common good.
But, importantly, that ignores that not all government action is created equal.
Differences in degree, at some point, become a difference in kind. There are certainly some proposals that fall into the category of reorienting incentives toward more desirable outcomes. But those are limited to domains where the government already is heavily involved — such as higher education — and ensuring other options are given their fair shake as well. Instituting a global tariff or banning minors from posting on social media seems to fall into a different category completely.
Nevertheless, it is undeniable that American Compass is on a mission to fundamentally change the GOP — and it has already made an impact. Cass says his group is radically dedicated to intellectual combat and intellectual honesty, and that this handbook is motivated by a deep belief that ideas still matter. This is a welcome sentiment, and it is something all conservatives should be able to get on board with.
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We should expect this particular battle of ideas to continue raging for years to come.
Jack Elbaum is a summer 2023 Washington Examiner fellow.