Seven Questions for Oren Cass on the New Conservatism
American Compass, a new organization dedicated to rethinking right-of-center economic orthodoxy, launches tonight.
Editor’s Note: One of the leading figures in the post-Trump realignment of the GOP has been Oren Cass, whose book The Once and Future Worker was an attempt to rethink America’s labor structure for the 21st century, and cast a skeptical eye toward free-trade liberalism that has hurt the middle class. This week, his new organization launches, American Compass, which will put institutional structure behind some of these discussions. We caught up with Cass and asked him a few questions about how to think about right-of-center economic policy and some of his goals. These remarks have been slightly edited for clarity and succinctness.
AB: If I had to put my finger on the biggest way your recent work diverges from what conservatives are used to, it would be this: About a decade ago, when I first started working in conservative politics, we used to hear a lot about “culture.” Politics was downstream from culture, we had to change the culture rather than make laws, and that the best way to restore the place of families in American life was to do this, as if the success of families was unrelated to their economic circumstances. You obviously disagree. Why was this approach mistaken?
OC: The approach isn’t wrong, it’s just woefully incomplete. I think culture is incredibly important and changes in it contribute to all sorts of problems, and we should talk about all of that. But, and this is something I wrote about recently for First Things, we shouldn’t be using “culture problem” as some get-out-of-jail-free card to avoid talking about public policy. For one thing, while the “downstream” metaphor has some value, human society is not a one-directional process that just moves in neat order from one category to another. Yes, culture influences politics. But politics also influences culture. The economy is influenced by both and influences both. So the fact that a problem is in part cultural does not mean that it is not also other kinds of problems.
And when you have a problem with many causes, you don’t go looking for the causes you can’t address and say “well, nothing we can do”—at least, you don’t do that unless you’re looking for an excuse to justify inaction. You go looking for the causes you can address and ask “what can we do about those?”
Looking across the nation today at all manner of social dysfunction—and of course, the problems aren’t all the same, they don’t all have the same causes and the same solutions, but just to generalize for a moment—I think it’s impossible to make a claim that these are only cultural problems rather than economic, or that better public policy cannot help. Certainly, there’s a lot of good research showing the underlying connections, for instance between the labor market and family formation.
But just intuitively, the cultural shifts highlighted as explanatory tend to be quite broad and universal ones. In a sense, all Americans swim in the same cultural pond. And yet when we look for the social dysfunction, we find it all in precisely the segment of the population that is facing economic struggles and a labor market that has left them behind. You have all these people who go to college—and really, where is the quote-culture worse than on a college campus—who then have no trouble moving on to careers at which they work very hard, establishing strong, stable families and communities, and so on. Just as they did when the quote-culture was purportedly so different in the past. Meanwhile, you have all these people who are not completing college, who have seen a worsening of their economic prospects, and there you find a wide range of social maladies, bordering in some cases on social collapse. What a coincidence, if our national cultural just happened to bifurcate just as our economy has, leading to radically different social outcomes for different economic classes, in a way that has nothing to do with economics.
AB: Granting economics among the root causes, you still have the problem that American conservatism has typically been hostile to government, and especially national government. You’ve made a good case for a more vigorous role for the government to play, but there is still a lot of mistrust among conservatives, much of it justified, that will make them think industrial policy is likely to be set by the ITC or Commerce Department’s equivalent of a Lois Lerner or James Comey. What’s the best way to persuade conservatives that competent government in the interest of the common good is even possible?
OC: I think it’s healthy, and fair, to be skeptical of government. But I think the crucial question is: compared to what? There are many things, that if government doesn’t do them, no one is going to do them. So while it may be satisfying to shoot down proposals as imperfect, or unlikely to work as well as proponents hope, those concerns aren’t really relevant. The question is whether they are better than nothing—an improvement on the status quo. Lois Lerner and James Comey are great examples because, guess what, we still need an IRS and an FBI. And with Lerner in particular, conservatives still tend to like the idea of a charitable tax deduction, even knowing the potential for abuse.
More generally, we have lots of examples of huge government programs that are on balance positive: public education, social insurance, the military… by the way, I just described virtually our entire government budget. Yes, all those things have problems and suffer scandals. But you don’t hear a lot of calls to repeal them all, or people wishing we’d never pursued them. So I’m all for humility and skepticism, but in some senses this answer is a repeat of my answer on culture: those things shouldn’t be used as an excuse for inaction.
When it comes to industrial policy, for instance, the question isn’t whether some federal agency is going to miraculously build the industries of tomorrow from scratch; of course it isn’t. The question is: given all our challenges, the hollowing out of industry, stalled productivity growth, aggressive strategies pursued by other countries, is trying to adopt some form of industrial policy preferable to doing nothing? It will have costs as well as benefits, there will surely be embarrassments along the way, it won’t deliver 100% of what we wish it would. But if we can agree there’s a problem, and see a path to programs that on balance would offer benefits, then that’s a pretty strong case for pursuing it—and for pursuing it in a way that tries to limit arbitrary power, preserve markets, and so on. The way to advance conservative values is to us them in the formulation of public policy, not just as an excuse to avoid formulating public policy.
AB: Let’s make that more concrete. For instance, today it does look like some consensus is developing that we should bring certain vital industries back to the United States, drug manufacturing for instance. If that were to happen, it seems to me we might see a big argument about where to put them, with libertarian conservatives wanting maybe Utah or Arizona, and populists wanting them to go to union states in the rust belt. How should we be thinking about these sorts of problems?
OC: This is a great example. Bringing back industries doesn’t have to mean a government program that picks which states to build factories in. The right way to think about economic policy generally, and in this instance industrial policy, is to step back and recognize that markets generate outcomes in response to the conditions they are operating in. This isn’t about the market being free or unfree. It’s about how we choose to educate, how we choose to regulate, how we choose to invest in research, how we manage trading relationships with countries whose own markets are decidedly unfree, and so on.
So if we want vital supply chains to return to the U.S., we should start by asking why did they leave, and under what different conditions would they have stayed, or be likely to return? And then we should try to create those conditions. Just as a hypothetical example, in the drug manufacturing context, what if we said that drug patents expire sooner if used for manufacturing outside the country? Or what if we said that Medicare pays a higher reimbursement rate for drugs manufactured inside the country? Or created a bank that made zero-interest loans for the construction of new manufacturing facilities of all kinds? Or created a fast-track permitting system that ensured site review and approval within one year and allowed no further legal challenges?
Every one of those ideas has pros and cons, and there are plenty of other approaches too. In fact, next month American Compass is hosting an online symposium where leading experts will each lay out the case for a different approach to encourage reshoring of supply chains. That’s the kind of policy development we need, that existing institutions have really failed to facilitate. But the point is, none of them entails bureaucrats choosing which state to put a factory in. They require policymakers to have a goal in mind—we have to be willing to say, “yes, we care where these things get made” instead of just “wherever the market wants to make them is best.” They require the crafting of policies in pursuit of that goal, which will surely be imperfect in many ways. But there’s no question that policy could help create conditions in which drug manufacturers would be more likely to construct plants in the United States.
AB: The Washington Post reported that Mitch McConnell is telling his caucus to resist Trump’s infrastructure spending impulses. It seems at the very least that we are likely to see a lot of resistance to the ideas you’ve been talking about from the traditional Republican donor class. It seems some of these people have assigned Pat Toomey and Nikki Haley to denounce your views as well at the Heritage Foundation and in the Wall Street Journal. What’s the plan for bringing the GOP around on some pro-worker, pro-industry policies?
OC: I think “assigned” is a bit harsh. How about “encouraged” or “invited”?
OC: OK, well you’re certainly correct that there is a lot of resistance within the right-of-center, from politicians, from institutions, and from donors. But I think it’s really important to distinguish among types of resistance. There are some true believers who have really convinced themselves of these quirky, unsupported theories that the smallest government and the least attention to the market’s operation generates the best outcomes. Mostly, though, you have people who haven’t thought critically about the issues and are just going with the flow of existing orthodoxy. And then, when it comes to politicians in particular, you encounter the meta problem where many are focused less on what they believe than on what everyone else believes, and it becomes a self-fulfilling prophecy where everyone thinks everyone else is committed to market fundamentalism and so they should be too.
So on one hand, you’re right, it feels like this overwhelming consensus. But on the other hand, it’s a spectacularly fragile one—like a crowd all pretending a naked emperor is splendidly dressed. And my experience has been that if you’re just willing to say, “actually, that’s not true,” and point out with logic and evidence that these basic tenets are not supportable, the whole façade collapses pretty quickly. And you may not have a lot of success that way with someone who has already dedicated a career to arguing the contrary. But with people who are open-minded, and with the kinds of people who will be defining the future direction of the right-of-center, I think there’s tremendous opportunity.
AB: Of course, there are also a lot of bets against you. When Donald Trump leaves office, either in 2021 or 2025, a lot of people in Washington expect, and perhaps even hope, that conservative politics will return to its previous melange of casino capitalism and permanent war. It isn’t obvious to me that this “national conservative” moment or whatever you want to call it is more than a flash in the pan yet. Tell us why that’s wrong.
OC: Well, what you’ve described is exactly the impetus for American Compass. If you look out across the right-of-center at individuals, you see this incredible intellectual energy and creativity and eagerness to return to first principles and formulate a conservatism that is responsive to the challenges of a modern economy. And then you adjust the setting on your binoculars so that you’re looking at institutions, and it all disappears. Within just about every institution, from Heritage and AEI to the Wall Street Journal and National Review to name your Senate office or agency, you find people excited by the idea that conservatism means more than just tax cuts, and in fact doesn’t really have anything to do with tax cuts. But the institutions themselves are, by and large, creatures of inertia.
I don’t think it should be surprising that even years into this enormous disruption within right-of-center politics, the institutions aren’t especially interested in reform, rather they’re putting their heads down and hoping that Trump too shall pass. And if this were about Trump, maybe that would be right. But it’s not about Trump. I think he has probably accelerated the process, but the fusionist coalition of economic libertarians, social conservatives, and defense hawks that carried the right-of-center through the Cold War is way past its expiration date. And this is something that the people you see leading these efforts now were already talking about long before Trump descended down the Trump Tower escalator.
Go look at what Senator Hawley was writing in National Affairs eight years ago. Or the way Senator Rubio was talking about fighting poverty. Or, for that matter, my essays in National Review, calling for confronting China on trade and challenging conservatives to take inequality seriously. Go back to 2008 and look at what Reihan Salam and Ross Douthat wrote in Grand New Party. The right-of-center was overdue for change, and a lot of the same forces that drove Trump’s success—things like the hollowing out of American industry, the deaths of despair—were also going to catalyze a firm rejection by conservatives of libertarian pieties and a reevaluation of what conservatism should stand for.
So I understand why the institutions want to go back to how things used to be, and have perhaps even convinced themselves that there’s a chance of that, but in reality there’s not. Their ideas and their coalition just do not hold together any more. The question is what comes next. And to advance that debate, there have to be institutions on the other side of it. And the goal of American Compass is to be such an institution.
AB: You’ve been on the right your whole career, but I want to ask you about the left. In the UK and to a lesser extent with the Bernie Sanders campaign, working class people have deserted socialist candidates in rather embarrassing electoral defeats. At the same time, Trump’s election continued the trend of Republican voters skewing downscale. The vision laid out in The Once and Future Worker is mostly about policy, but is it also good politics?
OC: I’m a real believer, maybe somewhat naively, that ideas matter and that it is good politics to have a coherent, defensible platform that addresses people’s actual concerns and the nation’s actual challenges. And so by that standard, yes I think it’s good politics.
That still leaves the question of what the coalition looks like. Because of course, no particular approach is going to suddenly attract 80 percent of the electorate. The other side adjusts as well, and you end up back at 50/50, or maybe 55/45 if you’ve really got your act together and your opponents don’t. The political scientists will blather on about median voter theorem and such things, but I think the better explanation is that politics and policy, like life, is full of tradeoffs. Every now and then you can find a free-lunch win-win, but by and large, if you’re serious about making changes to benefit some people, that is going to hurt others—often those happiest with the status quo.
This is a point I spend a lot of time on in The Once and Future Worker, that one of the great faults of our existing economic consensus is that it just takes all of the arrangements that most benefit well-educated knowledge workers—on globalization and immigration, on environmental regulation, on education, on labor, and so on—and tries to sell them as in fact best for everyone. And that’s just not true. Reorienting our policy framework and society to the advantage of those who have been left behind in recent decades is something we should do, indeed that we have to do if we want to survive as a free-market democracy, but that means reorienting it away from today’s “winners.”
And while people intuitively think of progressives as the group likely to be sympathetic to people who are struggling, in fact the progressive ideology is much more likely to believe that it can avoid tradeoffs entirely and instead develop some new social model, some set of programs that overcomes human nature, and so that is obviously very attractive to people who don’t want to make any sacrifices. It is conservatives who are more likely to recognize the inevitably of tradeoffs, the importance of preserving the non-negotiable foundations of our society—things like strong communities built on people’s rootedness to a place, the value of work and the importance of supporting a family and being a productive contributor to society.
So I think that’s where we’re headed—toward a progressive party that tries to march ahead on our current course with ever more redistribution as a backstop, and a conservative party that pushes to reverse some of our costly mistakes and restore the conditions that we know are necessary for people to flourish. A key question, in my mind, is whether conservatives can persuade enough people who might personally thrive in the progressive regime to look beyond their narrow self-interest and recognize that their preferred model simply isn’t sustainable; that for the common good and ultimately their own good, we need to pursue a different course.
AB: If you were to do a “Conservative Mind”-style run-down of where we might go in American history to find figures who are sympathetic to your vision, who are some people we might look to? In the more recent past one might point out that Pat Buchanan has been a big critic of free trade and consumption-oriented societies.
OC: This is an easy one—so many of the great American statesmen were sympathetic to the vision I’m describing. It’s the market fundamentalism of today that is a bizarre outlier. Washington and Hamilton both recognized the need for the national government to have a robust economic policy. John Quincy Adams. Henry Clay, of course, was the leading advocate for what he called the “American System,” which featured government intervention in the banking system, strong protection for domestic industry, and massive infrastructure projects—what they used to call internal improvements. Lincoln declared himself a Clay acolyte and pushed those policies further. Teddy Roosevelt obviously believed that public policy was critical to a well-functioning market. And on and on.
It’s really quite funny to look at the economic policy of the past and contrast it to the conventional wisdom of today. For much of American history we had among the world’s highest tariffs, at times we tightly restricted immigration, maintained punishingly high marginal tax rates, regulated the financial system so tightly that banks were not allowed multiple branches… how is that we didn’t collapse, and instead rose to become the world’s most powerful economy?
Today, economic policy pretty much means taxes and spending, and to the right-of-center it means tax cuts and deregulation—just getting out of the way. But historically, American policymakers thought deeply about the market’s underlying conditions—as I was discussing earlier in the context of the pharmaceutical plant. How could government build institutions and make investments and craft rules that would lead to a market that generated widespread prosperity? That’s the tradition we have to get back to.