Capitalism relies upon the mutual dependence of a nation’s capital and labor to produce good outcomes for both, and for consumers, too. Globalization has severed those bonds, urging the owners of capital to forsake the interests of their fellow citizens and pursue higher profits by moving production abroad, undercutting American producers with cheap imports, and exposing American workers to competition from foreign labor. American workers, their families, and their communities paid the price. The nation’s industrial strength, capacity for innovation, and economic resilience declined. Globalization is not the inevitable outcome of technological progress, nor is it a prerequisite to growth. Just as policymakers chose the current order, they can choose to move beyond globalization toward more balanced global flows of goods, capital, and labor.

American prosperity is built on the foundation of goods-producing industries like agriculture, manufacturing, and resource extraction, which deliver the most productivity growth, support broad ecosystems of suppliers and customers, foster technological progress, and play a critical role in national defense and resilience. Fortunately, less attention is being paid to the economists who have insisted that Americans should not worry about what we make domestically, or whether we make anything here at all. But recovering from the damage they have done will require concerted public action.

Robust financial markets are vital to a productive economy, but they are not an end unto themselves. Their task is to facilitate investment by connecting capital to its most productive uses at the lowest possible cost. In recent decades, American finance has metastasized, claiming a disproportionate share of the nation’s top business talent and the economy’s profits, even as actual investment has declined. This “financialization” of the American economy weakens the nation and threatens our future prosperity.