Conservative Economics

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Conservative economics gives policymakers the tools to understand capitalism and harness its power for the benefit of American workers, their families and communities, and the national interest. It rejects the market fundamentalism of libertarians who see capitalism as nothing more than economic “freedom” and thus expect a policy agenda of tax cuts, deregulation, free trade, and union-busting to unleash the economy’s productive forces. It likewise rejects instinctive hostility toward markets from progressives, who see government as the more effective mechanism for solving most problems.

Conservatives value the unique benefits of the free market to allocate resources efficiently and empower people to meet one another’s needs, to limit the power of a central government and place it instead in the hands of those best positioned to take care of their own interests, and to evolve over time in response to real-world conditions rather than at a bureaucrat’s whim. Markets are themselves institutions through which people develop informal codes and formal rules for cooperating and transacting more effectively. Humanity achieved greater progress in its living standards through just a few centuries of market-driven innovation and productivity than through all of history’s prior millennia. 

But conservatives also recognize that markets have drawbacks and limitations. The free market can reduce people to consumers and relationships to transactions. It prioritizes efficiency over resilience, and individual self-interest over the common good. Under the right conditions, the pursuit of private profit powerfully advances the public interest, but such conditions are never assured. Free markets have assigned higher value to hedge fund management than job-creating entrepreneurship, and rewarded offshoring to China over investing in local communities.

Thus, in conservative economics, free markets are a means to an end, not an end unto themselves. They are necessary but not sufficient to the economy’s proper ends—not only rising consumption, but also expanding the nation’s productive capacity, preserving its institutions, and supporting its families. Capitalism has an unparalleled ability to generate widespread prosperity. But it succeeds only when competing firms pursue profit by investing in the productive use and fair compensation of labor, and when people are well-equipped to engage in the market as entrepreneurs and workers and in their communities as citizens. Public policy plays an indispensable role in maintaining those conditions.

At American Compass, we work to restore this conservative economic tradition, atop which our nation rose from colonial backwater to continent-spanning industrial colossus. We believe that conservative economics demands a focus on:

  1. Productive Markets: Policymakers must constrain destructive and speculative profit-seeking and channel both talent and investment toward productive pursuits that advance the nation’s liberty and prosperity. Read More
  2. Supportive Communities: Policymakers must foster the institutions that allow the market to deliver on its promise for workers, their families, and the nation. Read More
  3. Responsive Politics: Policymakers must focus on the outcomes that people define as most important through democratic politics, rather than merely accepting those deemed most efficient by market logic. Read More

We have explored in depth the application of conservative principles to economic theory and policymaking. The Return of Conservative Economics, published at National Review alongside the announcement of American Compass’s formation, contrasts market fundamentalism with a genuinely conservative approach to economics, while The New Conservatism, published one year later at Foreign Affairs, explains how and why the American right is moving from one toward the other.

Our inaugural collection, Rebooting the American System, makes the case for a robust national economic policy from the perspectives of history, theory, and practice. Wells King’s essay, Rediscovering a Genuine American System, describes the conservative economic tradition atop which America rose from colonial backwater to continent-spanning industrial colossus. Julius Krein’s essay, Planning for When the Market Cannot, highlights the many situations in which public investment can be necessary and effective. And Oren Cass’s essay, Removing the Blinders from Economic Policy, provides a practical framework for applying conservative economics to policymaking.

And each year in our annual report, Cass writes a Founder’s Letter assessing the state of the economic  debate on the right. In 2020, Neoliberalism Falls Apart described the economic, social, and political trends that have rendered the old orthodoxy obsolete. In 2021, The Return of Political Economy outlined the challenges that conservative economics is uniquely suited to address, and was delivered as remarks at the Intercollegiate Studies Institute’s conference on The Future of Political Economy.

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5/4/2020
Rebooting the American System

The comprehensive, conservative case for a return to robust national economic policy

Featured Content

Browse all content in the Conservative Economics library

Essays

Founder’s Letter: The Return of Political Economy

1/10/2022 Oren Cass

Political economy has no inviolable truths. Anything that economists or political scientists claim as inviolable truth, then, is incomplete—it may hold within the narrow confines of their analysis, but it will not hold in reality over the long run.

Marginal Prophets

11/5/2021 Matthew Walther

Magical thinking is evident in Homo oeconomicus’s serial recital of the “benefits of trade”; his blithe attitude toward financialization and the rise of cheap digital consumer technology; his utter indifference to the economic pressures bearing down upon the working family…

A New Conservatism: Freeing the Right From Free-Market Orthodoxy

2/12/2021 Oren Cass

In this feature essay for Foreign Affairs, American Compass executive director Oren Cass discusses a path forward for conservatism that is no longer bound by free-market orthodoxy.

Rediscovering a Genuine American System

5/4/2020 Wells King

Economic stability, national security, widely shared prosperity, strong families, a pluralistic society—in short, the American way of life—are achievements plainly worth conserving. So is the only approach to economic policy that has ever proved capable of producing them.

Removing the Blinders From Economic Policy

5/4/2020 Oren Cass

Remove the blinders of economic fundamentalism, and it is impossible not to see the social, legal, historical, and institutional scaffolding that buttresses a growing economy, and the role that public policy must play in its construction and maintenance.

Conversations

What a Post-Trump Republican Party Might Look Like

7/16/2020

Ezra Klein interviews American Compass’s Oren Cass about challenging the right-wing economic orthodoxy and its quasi-religious veneration of markets, and focusing instead on clear social goals that put families first, eschew economic growth as the be-all-end-all of policymaking, and recognize the inescapability of government intervention in the economy.

What Now? A Conversation On Where Conservatives Go After the Trump Presidency

1/4/2021

American Compass’s Oren Cass, WSJ’s Gerald F. Seib, and author George F. Will discuss the future of the conservative movement, co-hosted with the Wall Street Journal.

Reaganism Live with Oren Cass and Kevin Roberts

1/26/2022

American Compass’s Oren Cass and the Heritage Foundation’s Kevin Roberts join the Reagan Institute for a conversation about the future of conservatism.

Critics Corner with Prof. Donald Boudreaux

6/9/2021

On this episode of Critics Corner, Oren is joined by one of our most active critics and open-letter writers, Donald Boudreaux of George Mason University.

Commentary

Are You Better Off Than You Were Forty Years Ago?

7/19/2021 Oren Cass

American Compass executive director Oren Cass discusses economic shifts over the past 40 years and why economists and policymakers need to embrace a more holistic view of what it means to be “better off.”

Growing Pains

6/11/2021 Wells King

American Compass research director Wells King reviews two books on the de-growth movement.

American Scream

4/10/2020 Wells King

American Compass’s Wells King reviews Michael Strain’s new book The American Dream Is Not Dead (But Populism Could Kill It).

The Return of Conservative Economics

2/18/2020 Oren Cass

Today we are announcing the formation of American Compass, an organization dedicated to helping American conservatism recover from its chronic case of market fundamentalism.

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