One of the problems surrounding the conversation around national conservatism – a new branding for more market-skeptical, nationalist conservatism – is the fact that the conversation has been thus far rooted in the theoretical and the esoteric. The argument (mainly occurring online) is centered around whether or not state intervention in the economy is permissible or desirable to begin with. Accusations of betraying the founding or indulging in free market fundamentalism fly back and forth.
Thankfully in this void, some specific policy measures have been proposed by those associated with this new project. Oren Cass and his American Compass project has launched a series of policy proposals in order to start to define national conservative economic policy.
These proposals are most specific in his book The Once & Future American Worker. The book is a helpful guide for those curious about what economic direction national conservatism may take. It outlines the major economic problems facing the United States, the unique problem facing conservatives due to this crisis, and various market reforms conservatives can make.
The Growing Crisis
Prior to the coronavirus, the conservative narrative was that the economy was doing just fine. Income mobility cancels out any labor market reality and the free market is working overall. After all, America’s poor are better off than those living in grinding poverty in the developing world, so what are they so ungrateful about?
Oren Cass throws cold water on all this optimism, revealing an undercurrent of dysfunction and dissatisfaction. If the market is working so well, why are Americans so malcontent? Cass cites research showing how at most 24% of Americans are satisfied with their life in America. Former Federal Reserve chair, Ben Bernanke, agreed when he noted in his Brookings Institute piece that “growth is not enough.” Cass’ numbers seem to bear this out:
Between 1975 and 2016, the share of men aged twenty-five to thirty-four earning less than $30,000 per year rose from 25 to 41%. At the end of 2016, Stanfrod professor Raj Chetty released a landmark study that used millions of tax records to compare parents’ and children’s earnings. For children born in 1950, 79% had higher earnings by age thirty than their powers had at the same time. But for those born in 1980, only 50% could say the same. Looking ahead to the next generation, only 37% of Americans expect that, ‘when children today in our country grow up they will be better off financially than their parents.’
This economic malaise has led to a spike in “deaths of despair.” Suicide jumped by 24% between 1999 and 2014. In particular, for men and women in their middle ages, it increased by 43% and 63%, respectively. From 1999 to 2016, as many Americans died from drug overdoses as they did in both World Wars. Middle aged Americans are dying so much from overdoses, substance abuse and by their own hand that it is lowering the life expectancy for the entire nation. Cass makes a powerful point. Measuring economic well being by stock market growth and increases in GDP is short sighted. Can we really say that all is well when the lived experience of so many Americans is so dismal?
The Radical Response
Free-market conservatives sometimes are loath to discuss these trends as they feel it would only empower radical opponents, in particular a growing socialist movement in America. Cass points out that “voters will ultimately choose a bad overhaul over none at all.” 2016 is likely to merely be a shot over the bow absent a drastic change. The Pew Research Center finds that,
A majority of Americans in a new poll said they believe the country is headed for a dark future in which the middle class shrinks, the economy suffers and life becomes more difficult for children, families and the elderly.
Does this sound like an electorate that will “go back to normal” once Trump is out of office? Much has been made about Biden’s defeat of Senator Bernie Sanders, America’s most visible self-proclaimed socialist. But while Sanders failed to defeat Biden, his program has already won most of the Democratic Party as a whole. The party, along with the organized left, is dramatically more radical than it once was.
Additionally, current economic trends do not favor the long term sustainability of conservatism. As the voters of tomorrow struggle to achieve home ownership and start families, one wonders why they would vote for a conservative party at all. What exactly does a struggling renter with no children feel needs to be conserved? More judges from the Federalist Society? Some esoteric appeal to the Founders? Or maybe a lower capital gains tax rate? Growing anomie and rising radicalization may quickly lead to a scenario in which American conservatism simply does not fit the social facts and will find itself extinct.
In response to this policy impasse, Cass proposes a different way of measuring prosperity. Rather than simply measuring policy by GDP growth, instead we should use “productive pluralism,” which he defines as “the economic and social conditions in which people of diverse abilities, priorities and geographies, pursuing varied life paths can form self sufficient families and become contributors to their communities.” His policy proposals can be broadly grouped into the following policy areas; the environment, education, immigration, trade, unions and a proposed wage subsidy. For the sake of brevity, I’ll focus on education, immigration, and trade.
The chapter on education is certainly specific and convincing. The model of “college for all” combined with an ineffective primary education system has created a “worst of all worlds.” Less than half of young Americans manage to complete community college, to say nothing of graduating from an undergraduate institution. Per pupil spending has grown exponentially since the 1970s, while test scores have flattened. Progressives are correct to point out that spending has grown less than Cass describes, but it still has grown at a healthy pace, while productivity stalls. Meanwhile, student debt has ballooned to $1.6 trillion as the ROI of a college education has dramatically declined.
Cass’ proposal is simple, if controversial: bring back tracking. Separating students into tracks for higher education or trade school based on their academic performance has its criticisms; namely that it will reinforce educational inequity. However the current system already does this as students are failed in high school, loaded down with debt and then shipped off to institutions that increasingly don’t provide the outcome that most students want: careers.
Cass rightly points out that most developed countries provide a choice for students to pursue a vocational track. This approach has results. The key would merely be ensuring a track structure where the student and the family has the choice, not the school or the teachers. Our education system disincentivizes students from attending vocational school while businesses languish for a lack of highly skilled workers.
Notably, Cass treats immigration and trade as two sides of the same coin. Surprisingly, those looking for a hardline immigration hawk and trade warrior will be disappointed. Cass notably does not advocate removing all undocumented immigrants or passing tariffs. The book even criticizes the Trump administration for scotching the Trans-Pacific Partnership.
However it is not merely economic libertarianism. For immigration policy, Cass advocates some interior removals and a Canadian-style points system privileging high-skill immigration. His argument is that, in reality, there are no “jobs Americans won’t do” but rather that low-skill immigration drives these wages down. Cass argues that if pro-immigration advocates suffered the same wage attrition, they too would advocate similar restrictions.
The scholarship and empirics on this issue is less definitive than Cass assumes. In many instances while restrictions have raised proposed wages, filling these jobs even at the increased wage has been nearly impossible. While Cass does cite instances like Arizona to demonstrate wage increases for working class Americans, the proposed benefits of mass deportations and restrictions have been marginal at best, while depriving the nation as a whole of immigration’s advantages.
While a points system will certainly have its benefits, restrictions on low-skill immigrant labor will likely not produce the low skill wage benefits as promised. Given Cass’ advocacy of a wage subsidy to help Americans recover from international trade dislocations, this seems like a more direct way to assist native workers than deporting their immigrant neighbors.
On the subject of trade, the book becomes most specific and offers a safe middle way between merely shrugging at rapid American deindustrialization and aggressive trade wars. Cass paints a dismal picture. America opened up its trade in the 20th century and was punished in two particular ways. Asia, most notably the People’s Republic of China, engaged in aggressive mercantilism as a means of outcompeting the United States. They achieve this through subsidies, mass IP theft, and punishing imports.
Secondly, America suffered a massive wave of deindustrialization. Thanks to Chinese import competition, anywhere between 1 million and 2 million manufacturing jobs were lost. Even taking into account the impact of automation (the book convincingly argues that this isn’t our main culprit), this is a massive cratering of our manufacturing job base.
Cass argues that we cannot afford to be blase about which jobs are performed by Americans. Manufacturing offers uniquely high paying jobs in rooted communities that cannot be easily replaced. Burke’s “little platoons” of society cannot exist without communities and wages to support them. The loss of these jobs, and the reverberating effects on thousands of communities are directly tied to the ongoing crisis all across America.
Cass advocates fighting these trends with three sets of policies. First rebalance trade by setting American firms on a fair footing. While this often worries free marketeers, the main proposal Cass suggests is increasing our public research for manufacturing R&D as we do with the National Institutes of Health. Even modest increases in research and development can have immense positive effects on American manufacturing output.
Secondly, we can take more aggressive measures to fight IP theft. Chinese IP theft may account for up to 750,000 jobs lost, primarily in manufacturing sectors. Cass proposes a host of punishments for IP theft, up and including banning the importation of products from firms convicted of IP theft. Along with increased WTO lawsuits against China and increased engagement with responsible trade blocs (like the TPP), even free marketeers believe there is a role for targeted legal action against guilty foreign firms that engage in this predatory practice. Actors like the People’s Republic of China are not immune to external and internal pressure and defending our own interest is not recklessly throwing out weight around.
Lastly, in order to assist workers who lose out due to import competition, the US should implement a wage subsidy. In a way, the government already offers a wage subsidy of sorts through the Earned Income Tax Credit. However this benefit occurs long after any income is earned and punishes single and thus younger workers.
Some conservatives would criticize this as a form of redistribution without taking into account that the benefits of our trade policy are not equal. Free traders cannot realistically expect communities to support free trade when the functional response to dislocation is, “Take a hike.” Unlike other redistribution policies, a wage subsidy would be connected to work instead of trading off with employment. This would be effective at combating localized poverty due to global trade shocks and reduce the imprint of the welfare state.
The Start of Something New
The Once & Future Worker finally puts the debate into the concrete world of policy and out of the realm of first principles. It also offers a domestic political program that national conservatives can rally to. Furthermore, upon closer reflection, it is hardly some Tory socialist manifesto that some online critics have portrayed it to be.
There are some shortcomings. What exactly does a national conservative environmental agenda look like? This remains to be seen even after a whole chapter devoted to the environment. Climate change remains remarkably absent from the discussion. However much of it seems relatively detailed, effective and hardly impossible to enact in today’s political climate. Discussions of wage subsidies, industrial policy and unions will not go down easily among some free market conservatives but a relatively positive reception even among skeptics like Rich Lowry indicates a wider conservative audience for a more nuanced approach to the market. The occasional incomplete chapter or policy aside, Cass’ work offers an effective conservative approach for the common good and should be read widely by both future and current policymakers.