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Globalization has produced a radically different result from the widely shared prosperity that its advocates promised. Instead, production shifted from some countries to others, taking labor demand with it and leaving behind a weakened industrial base, collapsed communities, and poor employment prospects. These shifts result not from genuine comparative advantage, but rather in response to aggressive government subsidies and the availability of exploitable labor in countries like China. Uncontrolled immigration and temporary work programs have a similar effect in reverse, flooding some countries with additional labor that releases the pressure on employers to pay good wages or invest in higher productivity.

This form of ā€œfree tradeā€ is not the epitome of free-market capitalism; it is the antithesis. Economists and policymakers who believed that capitalism is ā€œjust another word for economic freedomā€ assumed that the free flow of goods, people, and capital across borders would automatically generate prosperity. But capitalism relies upon the mutual dependence of a nationā€™s capital and labor to produce good outcomes for both, and for consumers, too. Globalization has severed those bonds, urging the owners of mobile capital to forsake the interests of their fellow citizens and pursue higher profits through labor arbitrage abroad. American workers, their families, and their communities paid the price. The nationā€™s industrial strength, capacity for innovation, and economic resilience declined.

China poses a particular problem. Globalizationā€™s rise coincided with the Cold Warā€™s end, in part, because a global free trade system that incorporated the Soviet bloc was unthinkable. But the ā€œholiday from historyā€ of the 1990s created a presumption that liberal market democracy was on the march everywhere, and globalizationā€™s proponents argued that incorporating China into a global marketplace would accelerate its own liberalization. They were wrong. Instead, China changed usā€”corrupting the free market, distorting investment flows, capturing valuable industries, and even exporting its authoritarian politics through campaigns of economic pressure.

At American Compass, we work to understand why globalization has failed and what alternatives exist. We develop approaches through which policymakers can rebalance Americaā€™s role in the global economy.

The Regaining Our Balance collection presents a comprehensive critique of how globalization has gone wrong, including Oren Cassā€™s seminal essay,Ā Searching for Capitalism in the Wreckage of Globalization, and Senator Jeff Sessionsā€™s reflection on how conservatives, himself included, were led astray. In Wrong All Along, page after page of quotations from an overconfident elite exposes the flawed ideology that has driven globalization; in Whereā€™s the Growth, chart after chart depicts the negative economic results. Other essays dig deeper on particular facets of the failure, including Senator Marco Rubioā€™s assessment of Chinaā€™s ascension to the WTO and Michael Pettisā€™s economic analysis of how free trade theory has broken down in practice. The Guide to the Semiconductor Industry provides a concrete example of these forces eroding American leadership and prosperity.

While evidence for globalizationā€™s success is scarce, the market fundamentalism prevalent on the right-of-center has traditionally ignored this reality, instead pushing a narrative in which America has always embraced an open economy and any alternative would be worse. The Rebooting the American System collection confronts these myths. In fact, the American economic tradition historically resisted global entanglement and the economy developed into an industrial colossus with the help of aggressive public investment and high trade barriers. Oddly enough, as John Burtka observes in Donā€™t Trade on Me, free trade dogma was imported to America by the antebellum, secessionist South. The Reagan-era quota on Japanese vehicle imports, which strengthened domestic manufacturers and gave birth to a massive new industry in the American South, provides compelling proof that a different approach can work.

Examples like these point toward possible solutions today. The Balancing Act provides a comprehensive overview of interventions that could help bring American trade, immigration, and investment flows back into balance. The Moving the Chains collection details a range of strategies for reshoring American industry and innovation, including Willy Shihā€™s proposal for pre-competitive consortia and Michael Lindā€™s proposal for local content requirements. Fortunately, the unthinking consensus that encouraged mockery of anyone who questioned globalizationā€™s wisdom has collapsed, and policymakers are beginning to act.

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Searching for Capitalism in the Wreckage of Globalization

Mutual dependence between capital and labor, not mere ā€œeconomic freedom,ā€ is what Adam Smith so ably described. Globalization destroys it.

Compass Advisors
Robert Lighthizer

Former U.S. Trade Representative

Jeff Sessions

Former U.S. Attorney General

Elbridge Colby

The Marathon Initiative

Michael Pettis

Carnegie Endowment


Featured Content

Browse all content in the Globalization library


Regaining Our Balance


How to Right the Wrongs of Globalization

Moving the Chains


9 Strategies for Retaking Global Leadership in Industry and Innovation

Rebooting the American System


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


Free Tradeā€™s Origin Myth

1/2/2024 ā€¢ Oren Cass

American elites accepted the economic theory of ā€œcomparative advantageā€ mainly because it justified their geopolitical agenda.

Only Trump Could Confront China

6/30/2023 ā€¢ Robert Lighthizer

The inside story of the trade negotiation that changed the world

Bad Trade

10/7/2022 ā€¢ Michael Pettis

ā€œBad competitivenessā€ results in weakening demand, which either reduces global production or requires surging debt to maintain demand and production at its existing level. Perhaps that rings a bell, because it is the world we live in.

Donā€™t Trade on Me

9/16/2022 ā€¢ John A. Burtka IV

America grew wealthy not from free trade, but behind some of the worldā€™s most imposing protectionist barriers. In fact, the principal tradition of free trade one finds in American history was born in the Confederate South.

Searching for Capitalism in the Wreckage of Globalization

3/9/2022 ā€¢ Oren Cass

Mutual dependence between capital and labor, not mere ā€œeconomic freedom,ā€ is what Adam Smith so ably described. Globalization destroys it.

Conflicted Party

3/10/2022 ā€¢ Jeff Sessions

The problem was that the powerful and wealthy saw no problem. They benefited from closing American factories and moving jobs abroad. They benefited from lower wages. This was their agenda from the start.


The American Rejection of Globalization


While many economists continue to insist that globalization has benefited the United States, the American people do not agree.

The Import Quota that Remade the Auto Industry

9/29/2022 ā€¢ Wells King, Dan Vaughn, Jr.

President Reagan negotiated a quota on Japanese imports that bought Detroit time to retool and spurred massive foreign investment in a new manufacturing base in the South.

Whereā€™s the Growth?


The era of globalization has coincided closely with the onset of precisely those problems that a clear-eyed analyst might have predicted and delivered outcomes contrary to the ones its ideologues envisioned.

A Guide to the Semiconductor Industry


A guide to what is happening in the semiconductor industry and how the U.S. fell behind its competitors in the global race for leadership.

Policy Proposals

Issues 2024: Globalization


Revitalizing the national economy must begin with restoring the incentive to invest and build in America.

Coalition Letter: Outbound Investment Restrictions


As the FY2024 National Defense Authorization Act (NDAA) moves through conference committee, we write to urge Congressā€™s support for security-related restrictions on outbound investment of American capital to the Peopleā€™s Republic of China (PRC).

A Hard Break from China


Protecting the American Market from Subversion by the CCP

Policy Brief: End ā€œPermanent Normal Trade Relationsā€ with China


Reclaiming control of U.S. trade policy

Policy Brief: The Global Tariff


Levy a tariff on all imports that rises until trade is balanced

The Balancing Act


Policymakers can act on several fronts: market access and investment rules to govern the flow of goods and capital; sovereign actions taken in relation to global institutions; and immigration policy that affects labor market composition.


Talkinā€™ (Policy) Shop: Balancing U.S. Trade


On this episode of Policy in Brief, Oren Cass is joined by American Compass policy director Chris Griswold to discuss how U.S. trade fell so far out of balanceā€”and some ideas for how to rebalance it.

Capital Markets Rā€™Us


Oren Cass joins David Bahnsen to discussĀ the state of American financial markets, private equity and venture capital, what is going wrong, and potential solutions.

Has the Right Gotten It All Wrong?


Oren Cass joins David Bahnsen to discuss globalization, market orthodoxy, and much more.


Out of Time on Outbound

2/26/2024 ā€¢ Oren Cass

If Republicans are serious about confronting China, they need to sideline members who arenā€™t

The Elite Misunderstands American Globalisation Grievances

1/11/2024 ā€¢ Oren Cass

New research bears little resemblance to assumptions about how the US population feels about China and the economy

China Challenge Is Too Much for Republican Market Fundamentalism

12/11/2023 ā€¢ Oren Cass

Defeat on outward-bound investment legislation shows significant change in the party

Why Trump Is Right About Tariffs

10/27/2023 ā€¢ Oren Cass

Taxing imported goods is unpopular with economists, but it could help the U.S. lower the trade deficit, strengthen its industrial base and safeguard national security.

Halting Investment in China

10/5/2023 ā€¢ Oren Cass

Oren Cass discusses why America must disentangle from China to protect its market from subversion by the CCP.

The Case for a Hard Break With China

7/25/2023 ā€¢ Oren Cass, Gabriela Rodriguez

In Foreign Affairs, Oren Cass and Gabriela Rodriguez make the case for why economic de-risking is not enough