The GOP’s New Path to the Future

November 30, 2022 - Conservative Economics
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American Compass Releases Conservative Economic Agenda for 118th Congress
Hayek’s Broken Promise

A new approach to tech policy is taking root in the GOP, and it’s not what you might expect from the party of Alan Greenspan and Friedrich Hayek.

Led by a handful of ambitious, policy-minded senators, a group of conservatives is embracing the idea of subsidizing the tech industry and advanced manufacturing — with an eye toward building a competitive edge over China, and revitalizing the hollowed-out industrial centers that have given the party its Trump-era populist verve.

Their tolerance, if not thirst, for government intervention might have been anathema in years past (and to some of their current peers). But as the overall regulatory apparatus increasingly finds itself racing to keep up with industry, so too has the GOP. That’s allowed technocratic conservatives like Indiana’s Sen. Todd Young, a chief driver of what would become this year’s CHIPS and Science Act, or Sen.-elect J.D. Vance, who ran his whole campaign as a sort of pilot project for tech-minded, statist Republican politics, to stake out new territory at the cutting edge of conservative think-tank world.

Wells King is the research director at American Compass, one of said think tanks, and a former policy advisor to Sen. Mike Lee (R-Utah). He wrote this week in a paper and adapted essay about what he calls “Silicon Valley’s Public Garages,” or the early computer-era tech innovators whose subsidized roots are now largely forgotten. I spoke with him this morning about why these conversations are happening now, what the future might hold beyond chip manufacturing, and where Republicans might find political support for a more hands-on industrial policy. A version of the conversation — condensed and edited for clarity — follows…

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American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

Hayek’s Broken Promise

It is a tragedy that Friedrich Hayek’s excesses, invested with the authority of his (deserved) reputation, became the unexamined default for right-of-center economic thinking in America.

Navigators Guild

December 6, 2022 - Conservative Economics
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In Fall 2022, American Compass launched the Navigators Guild, which brings together our community of donors to engage more actively with each other and with the Compass team. While funding is vital to any political movement, the nature of our project attracts an especially thoughtful, focused, and innovative group of supporters with both the desire and ability to help substantively advance our work. We proudly recognize Guild members for their partnership with American Compass and provide opportunities for them to participate more intimately in our shared cause. Through their leadership and generosity, members of the Navigators Guild serve as ambassadors and have a direct and positive impact on American Compass’s work. Membership grants exclusive access to American Compass’s experts and initiatives and provides a unique opportunity to help chart the course of conservative thought and policy for the good of all Americans.

Our Mission: To restore an economic consensus that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity.

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Benefits of Membership:

  • Signed copy of Oren Cass’s The Once and Future Worker: A Vision for the Renewal of Work in America
  • Exclusive updates from the Executive Director—Oren’s commentary on current events, policy ideas in progress, and what we are reading
  • Recognition in the Annual Report with option to remain anonymous
  • Recognition at American Compass events

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$5,000–24,999 annual giving

Benefits of Membership:

  • All Voyager benefits, plus…
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American Compass Releases Conservative Economic Agenda for 118th Congress

November 9, 2022 - Conservative Economics

New Direction provides the policy toolkit for serious conservative policymakers in Congress

RECOMMENDED READING
The GOP’s New Path to the Future
Navigators Guild
Hayek’s Broken Promise

WASHINGTON, DC — Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of workers, their families and communities, and the nation.

The proposals include:

  1. Reshoring Industry: Using trade and industrial policy to restore American leadership in industry and innovation.
  2. Building Non-College Pathways: Shifting resources from higher education to employer-led training.
  3. Supporting Families: Providing a generous monthly per-child benefit to support working families. 
  4. Decoupling from China: Channeling productively the uncontrolled cross-border flows of goods, capital, and people unleashed by globalization.
  5. Representing Workers: Giving workers access to non-union works councils and seats on corporate boards.
  6. Governing Big Tech: Creating a publicly operated tool to securely and privately verify age online to protect children.
  7. Rekindling Investment: Strengthening financial markets so that more capital reaches the real economy.
  8. Understanding America: Surveys on family and education policy that can inform policymakers’ thinking.

Conservative economics is built on three pillars: productive markets, supportive communities, and responsive politics. Public policy has an active role to play in ensuring that the rules of the game align pursuit of profit with investment in domestic production and employment; in reinforcing the foundations of institutions like the family, labor unions, and churches; and understanding and respecting the nation’s frustrations and aspirations.

Click here to read New Direction: Conservative Principles & Policies for the 118th Congress.

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The GOP’s New Path to the Future

A new approach to tech policy is taking root in the GOP, and it’s not what you might expect from the party of Alan Greenspan and Friedrich Hayek. Led by a Read more…

Navigators Guild

Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

Hayek’s Broken Promise

It is a tragedy that Friedrich Hayek’s excesses, invested with the authority of his (deserved) reputation, became the unexamined default for right-of-center economic thinking in America.

Hayek’s Broken Promise

Oren Cass February 19, 2020 - Conservative Economics

“Balanced” trade hasn’t worked out so well.

RECOMMENDED READING
The GOP’s New Path to the Future
Navigators Guild
American Compass Releases Conservative Economic Agenda for 118th Congress

It is a tragedy that Friedrich Hayek’s excesses, invested with the authority of his (deserved) reputation, became the unexamined default for right-of-center economic thinking in America.

The resulting orthodoxy too often combines a Panglossian insistence on defending market outcomes regardless of their quality with a reflexive belief that policy intervention can only be distortive for the worse.

But when it comes to international trade’s effect on the American economy, a knowing assertion that nothing should be done, followed by yet another “analysis” working backward to an argument that nothing needs doing, will no longer do.

Continue Reading at American Mind
Oren Cass
Oren Cass is the executive director at American Compass.
@oren_cass
Recommended Reading
The GOP’s New Path to the Future

A new approach to tech policy is taking root in the GOP, and it’s not what you might expect from the party of Alan Greenspan and Friedrich Hayek. Led by a Read more…

Navigators Guild

Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

Comparative Disadvantage

Oren Cass January 15, 2020 - Conservative Economics

If comparative advantage is created rather than discovered, refusing to play the game has consequences.

RECOMMENDED READING
The GOP’s New Path to the Future
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American Compass Releases Conservative Economic Agenda for 118th Congress

The heart of Samuel Gregg’s case against economic nationalism is an abiding faith in the theory of comparative advantage. So well does this theory guide national economic development on behalf of the national interest that interventions by policymakers can only make matters worse. His faith is misplaced.

“In the first place,” writes Gregg, “economic nationalism makes it harder for individuals, regions, and nations to discover their comparative advantage.” As an example, he suggests that “Israel may be able to produce more manufacturing goods and technology than Australia. It’s still, however, the case that Israel can obtain more manufactured goods from Australia by specializing in technology and trading some of that output for imported manufactured goods.”

This description is the “A” answer on an introductory economics exam. Comparative advantage allows trading partners, whether individuals or nations, to specialize where each has the lower opportunity cost, increasing total output and, through mutually beneficial exchange, leaving both with more to consume. The sooner that each side “discovers” its advantage and specializes accordingly, the sooner benefits can flow. By contrast, Gregg argues, a protectionist policy that interferes with trade in a free-market international economy, “gradually dulls a nation’s awareness of its comparative advantages.”

But the description bears no resemblance to how the international economy operates. Even the stylized example raises more questions than it answers. Israel is indeed an international technology powerhouse. But why? Is it simply in the nature of small, socialist agricultural communities founded by refugees and beset constantly by war and terrorism to become centers of innovation? Is it something about the Mediterranean winds, perhaps? Or, as the World Bank suggests, has it “been the Israeli government’s explicit goal to position Israel at the core of the knowledge economy.… There is broad agreement as to the significant role played by the government in the emergence and development of Israel’s vibrant and dynamic high-tech sector.”

Australia, for its part, might appear sensible to specialize in manufactured goods. The example conveniently provides only the desirable-seeming technology and manufacturing industries as candidates for specialization. What about kangaroo meat? Would Australia be wise to outsource all its technological needs to Israel so that it can focus on its own comparative advantage in marsupial herding? The theory assures us that, in year one, the Aussies will enjoy a greater bounty of software and ‘Roo-ribs than if it tried to develop software itself. But what sort of economic trajectory would the nation then travel?

The idyllic conception of an international economy in which countries all benefit from specializing in their discovered comparative advantages fails both because comparative advantage is not discovered and because specialization can backfire.

Continue Reading at Law & Liberty
Oren Cass
Oren Cass is the executive director at American Compass.
@oren_cass
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Navigators Guild

Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

Liz Truss, Supply-Side Crush

Oren Cass October 25, 2022 - Conservative Economics
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The GOP’s New Path to the Future
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American Compass Releases Conservative Economic Agenda for 118th Congress

Can someone do a wellness check on America’s supply-side tax-cutters in the wake of Liz Truss’s decline and fall? From the American Enterprise Institute to the Wall Street Journal editorial page, lowering marginal tax rates has long been the prescription for pleasing “the market” and setting Western societies on the path to growth and prosperity. Here was a UK premier proudly advancing their preferred agenda—and “the market” revolted, triggering the collapse of her government.

This presents an existential question for these institutions: Was the purportedly pro-growth tax plan wrong, or was the market?

For most people, there is no quandary here. Tax cuts can be lousy, market signals don’t always prove value. But either thought negates a bedrock tenet of market fundamentalism: As former  US Ambassador to the United Nations Nikki Haley has professed, “as we are dealing with changes in our economy, tax cuts are always a good idea.” According to historian (and former Journal editorialist) Amity Shlaes, meanwhile, “markets do not fail us. We fail markets.” So what happens when a tax cut fails the market?

Continue Reading at Compact
Oren Cass
Oren Cass is the executive director at American Compass.
@oren_cass
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Navigators Guild

Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

What a Post-Trump Republican Party Might Look Like

July 16, 2020 - Conservative Economics
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The GOP’s New Path to the Future
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American Compass Releases Conservative Economic Agenda for 118th Congress

Five years ago, Oren Cass sat at the center of the Republican Party. Cass is a former management consultant who served as the domestic policy director for the Mitt Romney campaign and then as a senior fellow at the conservative Manhattan Institute. But then he launched an insurgency.

Today, Cass is the founder and executive director of American Compass, a new think tank created to challenge the right-wing economic orthodoxy. Cass thinks conservatism has lost its way, becoming obsessed with low tax rates and a quasi-religious veneration of markets. What conservatives need, he thinks, are clear social goals that can structure a radically new economic agenda: a vision that puts families first, eschews economic growth as the be-all-end-all of policymaking, and recognizes the inescapability of government intervention in the economy. Trump is likely — though not certain — to lose in 2020. And then, Cass thinks, Republicans will face a choice: to return to a “pre-Trump” consensus, or to build a “post-Trump future” — one that, he hopes, will prevent more Trump-like politicians from rising.

In this conversation, Cass and I discuss how current economic indicators fail, the relationship between economics and culture, why Cass believes production — not consumption — should be the central focus of public policy, the problems with how our society assigns status to different professions, the role that power plays in determining market outcomes, the conservative case against market fundamentalism, why Cass supports labor unions and industrial policy but not a job guarantee or publicly funded childcare, what the future of the Republican Party after Donald Trump looks like, whether Cass’s policies are big enough to solve the problems he identifies, and more.

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Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

Collection • May 4, 2020

Rebooting the American System

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

Foreword: On Resilience

America’s ability to meet the challenges of tomorrow rests on our conviction to turn a new economic page today.

Foreword: On Security

The American system of innovation, combining strategic investment and private enterprise, made our nation’s industry the envy of the world. It can pave the way for widespread prosperity and security again today.

Rediscovering a Genuine American System

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.

Planning for When the Market Cannot

The fact that government planners are not omniscient is obvious, but it does not automatically follow that planning is always ineffective. Perfect information is simply not a precondition of successful planning in either the private or the public sectors.

Removing the Blinders From Economic Policy

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.

Podcast: The Return of Conservative Economics

American Compass’s Oren Cass and Wells King join the Bill Walton Show to discuss Rebooting the American System.

Overview

After decades of looking away as America’s supply chains migrated overseas, policymakers are finally facing the reality that dependence on foreign producers has weakened the nation’s resilience, its security, and its economy. When factories leave, not only the jobs but also the suppliers, the customers, the expertise, and the innovation go too. When a crisis strikes, vital supplies are unavailable. When productivity growth and innovation are needed, they are nowhere to be found.

This symposium gathers experts in many fields; working in think tanks, universities, and industry; starting from points across the political spectrum; to delineate and describe the levers available to policymakers in pursuit of reshoring supply chains and to offer concrete policy proposals for using each lever. Some proposals emphasize investments that the United States can make to improve its competitiveness—in people, in infrastructure, and in research. Others consider how better laws could attract or even force firms toward domestic production. Still others advocate reform for institutions themselves, from the federal government to the WTO.

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American Compass, Moving the Needle

September 20, 2022 - Conservative Economics
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American Compass Releases Conservative Economic Agenda for 118th Congress

American Compass is small—a six-employee outfit headquartered in a converted yoga studio. It doesn’t love the label “think tank,” which, as research director Wells King put it, is evocative of fellows who “sit at their desks and think long and hard for a long time and maybe produce one or two white papers a year.” But Compass is similar to the established think tanks in that it is organized around an idea—to “restore an economic consensus that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity.”

That mission statement is a conscious pivot away from the current right-of-center economic consensus, which is laser-focused on slashing marginal tax rates for hedge-fund managers. And in contrast to its rival think tanks, Compass is grappling with the tensions between conservatism and unfettered capitalism. “Creative destruction” upends businesses and ways of life that sustained communities for generations. The free movement of goods across national borders and the birth of international supply chains ship physical resources and know-how from American communities to those overseas. The collapse of American manufacturing has shunted once-employed men to the service industries, if they’re lucky, or drug abuse and Social Security fraud if they’re not. Financialization has created a caste of people whose livelihoods are removed from actual production and who increasingly hold their fellow countrymen in contempt.

Compass’s policy proposals, such as local content requirements, aggressive antitrust enforcement, generous child benefits, and a financial-transaction tax, call for interventions in the marketplace that would have been unthinkable for a conservative think tank ten years ago.

Continue Reading at The American Conservative
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Navigators Guild

Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

Liberty and Tariffs for All

Oren Cass September 16, 2022 - Conservative Economics

Free international trade is not a vital tenet of liberty in the American tradition; it was adopted, in Burtka’s words, “for the worst reasons and delivered the worst results.”

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I spoke earlier this week at a private event for a fervently free-market group. Bringing new ways of thinking to such audiences is a favorite pastime of mine, and one of American Compass’s reasons for being. Partly, of course, this presents an opportunity to persuade. As important, I get to hear the questions and counterarguments directly, and test out which responses are best received. It has been both satisfying and encouraging to see a sharp uptick in invitations for these kinds of presentations over the past year.

Anyway, in this particular talk I emphasized the role of robust national economic policy—up to and including trade barriers—in advancing liberty and prosperity. When I was done, an audience member posed a very fair question: How could it possibly advance liberty to interfere with people’s right to trade freely? Isn’t that part of liberty?

That depends, I replied, on what we mean by liberty and from whence it comes. If liberty is simply the freedom to do anything I want anytime I want then, yes, a trade barrier would reduce liberty. But what if a commitment to maximizing individual liberty at every moment in time produces an unstable society and a weak economy incapable of supporting a civil and democratic politics? We advance liberty by building and strengthening a nation capable of advancing liberty, recognizing that this requires more than the simplistic choice of all liberty all the time. As Burke wrote in Reflections on the Revolution in France, “That [man] may secure some liberty, he makes a surrender in trust of the whole of it.”

This is the tradition of liberty on which America was built. The Founders created a commercial republic and cherished the free market—but it was a free domestic market that interested them. They sought freedom from dependence on foreign power, not freedom to be dependent. The equation of liberty with free trade came later, in a plot twist that John Burtka examines in this week’s Compass Point:

The hard lessons of history and great power competition showed that England wanted nothing more than to smother America’s infant industries in the cradle and keep the new nation dependent on her mother country forever. If America followed the course of free trade, [John] Adams reasoned, her future would be marked by industrial annihilation, economic ruin, consumer extravagance, and debt.

[Thomas] Jefferson echoed the same themes, concluding his letter to [Benjamin] Austin with a prophetic and tragic warning about ideologues who would use free-trade absolutism as a “stalking horse to cover their disloyal propensities to keep us in eternal vassalage to a foreign & unfriendly people.” So it was in the Antebellum South.

It was the slaveholding South, Burtka explains, that developed a taste for the British Empire’s flavor of free international trade as a way to justify and support their brutal and backward economic system. In rebellion, the South went so far as to mostly adopt the U.S. Constitution as the Confederate one but make specific changes to replace the “American System” of economic development with a market fundamentalism:

Its Article I, Section 8, Clause 1 authorizes Congress to “to lay and collect taxes” and so forth, as in the American original. But the drafters inserted specific provisions that “no bounties [subsidies] shall be granted from the Treasury; nor shall any duties or taxes on importations from foreign nations be laid to promote or foster any branch of industry.” Likewise, Clause 3 copies the U.S. Constitution’s same clause authorizing Congress “to regulate commerce with foreign nations” but rather stridently adds that “neither this, nor any other clause contained in the Constitution, shall ever be construed to delegate the power to Congress to appropriate money for any internal improvement intended to facilitate commerce.”

In a real sense, the Confederacy was America’s first experiment with a free-trade maximalist regime—and it was a spectacular failure.

Of course, the historical record cannot vindicate or indict a policy approach merely by its association with a blessed or blighted regime. You know who supported a strong welfare state? Hitler, is not a useful mode of argument. We must evaluate policies on their merits.

But when philosophical principles and the American tradition come into focus, as they invariably do in conservative debates, especially by libertarians promoting an abstract ideology that tends to crumble on contact with reality, we should at least be sure to trace the history carefully. Free international trade is not a vital tenet of liberty in the American tradition; it was adopted, in Burtka’s words, “for the worst reasons and delivered the worst results.”

I don’t know if this answer satisfied my questioner entirely, but I was pleased to give him something new to think about.

Read Don’t Trade on Me.

Oren Cass
Oren Cass is the executive director at American Compass.
@oren_cass
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The GOP’s New Path to the Future

A new approach to tech policy is taking root in the GOP, and it’s not what you might expect from the party of Alan Greenspan and Friedrich Hayek. Led by a Read more…

Navigators Guild

Join the Navigators Guild, a community of leaders helping us craft economic policies that support family, community, and domestic industry.

American Compass Releases Conservative Economic Agenda for 118th Congress

Today, American Compass is releasing New Direction: Conservative Principles & Policies for the 118th Congress, an agenda for economic renewal, focused on the interests of worker, their families and communities, and the nation.

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