Founder’s Letter: A Healthy Dose of Populism

The term “populism” is most often used disparagingly, to condemn political efforts perceived as pandering to the worst instincts of the masses. Its opposite, in this telling, is Edmund Burke’s famous adage, “Your representative owes you, not his industry only, but judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.” The populist does what the people want; the statesman does what is good for them.

But this definition begs the question. What makes politics hard, and essential, is the need to mediate between competing definitions of the common good and amongst the varying aspirations and priorities of a pluralistic society. What is good for the people? And if the people’s definition of the good differs from the statesman’s, whose should prevail? Elected leaders and technocrats may have special insight into how the people’s goals are best accomplished, but can they know better than the people what those goals should be?

The American right-of-center has gotten these answers wrong in recent decades, in ways that have drifted far afield of genuine conservatism. Respect for the values and preferences of the people is vital to democratic legitimacy and good policymaking; only with that direction discerned can policymakers serve the people by bringing their own judgment to bear. The people must define the ends; the technocrats can best determine the means.

A fatal conceit of the market fundamentalism that infected conservatism is that economics makes discussion of ends obsolete. According to the in-fashion doctrine, the goal of economics is to maximize consumer welfare, accomplished by providing a free market in which individuals can optimize their own outcomes. In this formulation, politics plays no role. The statesman’s task is to deliver the free market and if the people say they want something else they are wrong; to listen is “populist,” and a dereliction of duty.

The inevitable and peculiar result is that policymakers fail even when they succeed. As I wrote in The Once and Future Worker:

The problem is not so much that public policy has failed as that it has succeeded at the wrong things. America is like the classic romantic-comedy heroine who, as the trailer intones, “had it all, or so she thought.” She has the prestigious job and the elegant apartment, yet she is not happy. She has pursued the wrong goals, she discovers, and to reach them, she sacrificed the things that mattered most.

We got exactly what we thought we wanted: strong overall economic growth and a large GDP, rising material living standards, a generous safety net, rapid improvements in environmental quality, extraordinarily affordable flat-screen televisions and landscaping services. Yet we gave up something we took for granted: a labor market in which the nation’s diverse array of families and communities could support themselves.

The practitioners of this politics are understandably frustrated by the ingratitude of the masses. With material living standards at all-time highs, how dare families say they have more trouble making ends meet? Seeing as temporary workers make goods and services cheaper for everyone, albeit by suppressing wages, an opponent of the strategy can only be xenophobic. The “populist” who listens to such concerns—condescendingly termed “grievances”—and rises in opposition to the globalization and deindustrialization of the economy sins against the community by allowing its unscientific emotions to override what economists can prove is best.

If this is populism, then American Compass is proudly populist. But I often wonder, when I hear the term used in this way, what its opposite would be. Is the goal to be not populist but elitist? Out of touch? Steadfastly disinterested in the well-being of the people whose flourishing should be everyone’s mission?

A much better term than “populist” is “responsive.” A responsive politics endeavors to understand the ends desired by the people before turning to the more technocratic issue of how best to fashion the means. One way in which American Compass is unique is our focus on Responsive Politics, one of our three major programs. We conduct in-depth surveys that pose questions too rarely asked of the American people—about their aspirations, their preferences in organizing their lives, and the tradeoffs they wish to make; our research on topics like “secure jobs” and the “cost of thriving” seeks to measure the economy as working families experience it; and projects like the Edgerton Essays introduce perspectives from far outside the typical policy discourse.

Our work from these many angles all converges on the conclusion that Americans are struggling to achieve prosperity as they define it, encompassing not only economic measures, but also indicators of family, community, and national health that are poorly correlated with consumption and often undermined by market forces. Much of our success in reshaping conservative economic policy debates is the result simply of our willingness to believe what the American people are saying, make their problems our starting point, and take their priorities as our own.

This annual report documents a sea change underway in American conservatism and the remarkable role played by an organization of six people with a budget of less than $2 million that wields extraordinary influence thanks entirely to the power of its ideas.

Change first came to the right-of-center in 2016, of course, as Donald Trump laid waste to many of the stale orthodoxies that had guided the Republican Party since the 1980s. But for all his disruptions and provocations, Trump showed little interest in building an intellectual foundation or developing a policy agenda that charted a new course forward. The conservative establishment adopted a mindset of “this too shall pass” and waited, heads down, to return to their pre-Trump agenda. The Trump administration’s major legislative achievement was a Paul Ryan tax cut.

What has happened since President Trump left office has thus been, in many ways, more significant for the future of conservatism. Prominent elected leaders and key institutions have become skeptical of corporate power and financial engineering and optimistic about a renewed labor movement; actively hostile to globalization and enthusiastic about industrial policy; averse to entitlement cuts and eager to expand support for working families. The one organization in all of American politics responsible for advancing that set of ideas is American Compass.

To quote Senator Marco Rubio, “Compass is doing as much or more to shape the national conversation and our economic policy than Washington’s largest think tanks. I look to American Compass for advice and ideas, and the number of my colleagues who do also is staggering.” Or, as Senator J.D. Vance put it, “If we are to succeed in building a new economic agenda that actually serves the interests of working people in this country, it will be in large part thanks to the hard work and rigorous policy analysis they continue to produce.”

Our work on family policy shaped proposals from Senators Josh Hawley, Mitt Romney, Richard Burr, and Steve Daines and has become the gold standard for a robust conservative family benefit, endorsed by a range of conservative scholars from the American Enterprise Institute to the Ethics and Public Policy Center. Our work on industrial policy was vital to passage of the CHIPS & Science Act and is “changing how policymaking happens in Washington,” according to Senator Todd Young. Our work on labor, once considered outlandishly heretical, now provides the core for the chapter on that topic in the consensus conservative agenda published by the Heritage Foundation.

In 2020, Bloomberg reported on our release of Coin-Flip Capitalism: “A new conservative think-tank in Washington is launching its first campaign Wednesday with what could be a long-shot goal—persuading pro-business Republicans that they should cast a more skeptical eye on Wall Street’s private equity firms and hedge funds.” Three years later, our “conservative economic platform that challenges Wall Street” was “driving the day,” according to Politico. The Wall Street Journal reported that “Republicans have emerged as the unlikely champions of reining in industries from Big Tech to Wall Street” and quoted Senator Marsha Blackburn: “Gone are the days that Republicans are going to sit on the sidelines as big behemoths take advantage of the American people.” In our polling, a remarkable 57% of Republican primary voters say, “Wall Street investors are getting rich doing things that weaken our economy,” compared with just 43% who say, “Wall Street investors play an important role in strengthening our economy.”

On globalization, and China policy in particular, American Compass has charted the course now being followed by nearly every other conservative institution. Even the “Freedom Conservatives,” convened in direct response to Compass’s pervasive influence, acknowledge that they can support free trade only “with free peoples,” conceding the failure of market fundamentalism in this context. Foreign Affairs published an essay adapted from our landmark paper, A Hard Break from China, which establishes a comprehensive framework for minimizing integration between two incompatible economic and political systems.

And echoing our call for a “bounded market” protected by a global tariff starting at 10%, President Trump has now said, “I think we should have a ring around the collar” of the U.S. economy, with a 10% global tariff.

Wherever you look on the campaign trail, Compass’s influence is visible. Another good example is Governor Ron DeSantis’s “Declaration of Economic Independence,” which describes his goals very differently from the traditional Republican candidate’s, but almost exactly as we define ours: “We want to be a country that makes things, where a family can raise children on a single income, and where young people can develop the skills and values necessary to build a decent life and contribute to their communities.” As I had written in the foreword to Rebuilding American Capitalism: A Handbook for Conservative Policymakers, “what Americans want it to do is help students develop the skills and values needed to build decent lives in the communities where they live.”

Two common threads run through our work on all these issues. First, American Compass is prevailing time and again because our ideas are the right ones. As I explained at our Rebuilding American Capitalism Forum in June: “The philosophy of American Compass is that if you have better ideas, if you have the most thoughtful people, if you work harder than everybody else and you have just obsessive integrity in how you behave, you can win, even in Washington. That is, I think, what we’ve done.”

We have none of the resources available to the enormous think tanks with scholars dedicated to every issue able to release countless op-eds and talking points and meet with every relevant congressional staffer. Nor do we have armies of lobbyists on our side, who can with straight faces deliver arguments that clearly make no sense but are in both the speaker’s and listener’s interest to accept. To the contrary, we have a policy staff of three, who on a single day might go from a meeting with staff for the House China Select Committee on export controls to a meeting with staff for the House Ways and Means Committee on tax reform to a meeting with staff for the House Energy and Commerce Committee on drug pricing. The lobbyists are, invariably, on the other side of every one of our fights.

We are winning only because our logic is inescapable and the quality of our work undeniable.

The second common thread in our work is that, taken as a whole, it charts an intellectually coherent and politically plausible course toward an agenda for a conservative governing majority. Every expired political movement has its Japanese soldiers holding out on remote islands, unaware the war has ended or sworn to fight on regardless. The Republican Party has the Wall Street Journal’s editorial board. But while nearly everyone else understands that the Reagan-era agenda of tax cuts, deregulation, and free trade is over, almost no one is prepared to explain what is supposed to replace it. We are.

With a robust platform and message supported by reams of research, and a growing coalition of elected leaders and young policy professionals eager to carry it forward, American Compass has reached a vital inflection point—much like the one that promising start-ups reach when they have proven their technology and must bring it to market. Making that leap is our goal for the year to come. We invite you to join us by supporting this important work.