We are living through a historic inflection point—the passing of a decades-long economic obsession with maximized efficiency and unqualified free trade. Overseas, this obsession has prompted an explosion of economic growth and technological change. But here in the United States, families have fallen apart, communities have imploded, and entire industries have ceased to exist. Americans, leaders and citizens alike, must finally face this challenge head-on. It’s time to dust off the economic playbook that made America the most prosperous and powerful country in the world. It’s time to revive the American System.

The term “American System” was coined by the statesman Henry Clay in the early 19th century, but it refers to something as old as the republic itself—the use of public policy to support domestic manufacturing and develop emerging industries. You wouldn’t know it from today’s market-liberal economists, but this has been the preferred approach of virtually every major leader in our country’s history.

Alexander Hamilton, for example, believed private capital should be supplemented with “the incitement and patronage of government” to encourage manufacturing. Thomas Jefferson used public revenue to support “new branches of industry that may be advantageous to the public.” Abraham Lincoln invested dramatically in “internal improvements” to American infrastructure. And 20th century presidents from Franklin Roosevelt to Dwight D. Eisenhower to Ronald Reagan used public-private partnerships to win World War II, the Space Race, and the Cold War, respectively.

What happened? In short, we got complacent. The Soviet Union fell, and the United States became the world’s unchallenged superpower. For some reason, our leaders assumed it meant that human beings had moved past our fallen nature. That the lessons learned from thousands of years of history meant nothing. That the well-being of our nation could be subordinated to the well-being of the “international community,” or that there was no possible conflict between the two. In short, our leaders embraced a turbocharged and ideological form of liberal economic theory—long admired by academics but never fully adopted by the government.

Elites rejoiced when the U.S. enacted the North American Free Trade Agreement and China joined the World Trade Organization. For the next 20 years, cheap foreign labor fueled record corporate profits. In exchange, Americans were promised cheap TVs and the opportunity to retrain for “jobs of the future.” Wall Street made a bundle, but working-class Americans experienced a far different reality. They saw their jobs disappear and their communities fall apart as production moved overseas. They saw innovation stagnate as private equity firms dismantled venerable companies and bought back shares instead of investing in production. And they saw the people who benefited from the status quo use all their wealth and influence to marginalize the “complainers” who disagreed with them.

Until 2016, that is, when a brash billionaire with no need or respect for the Washington establishment finally gave voice to the working class. Donald Trump’s wrecking-ball presidential campaign reopened the conversation on political economy, and his election opened the door to real change. But Washington wasn’t ready for a changing of the guard. Instead, it resisted the president’s policies every step of the way. Lobbyists, the liberal media, and donor-funded think tanks argued that Trump’s America First policies were just reactionary protectionism doomed to harm, not help, the U.S. economy. They even succeeded in weakening Trump’s efforts to change our economic relationship with China.

Not all was lost, though. Senator Mike Lee and I saw an opening in the 2017 tax-reform debate to show the public that Republicans can be the party of the worker and family, not big business. At the time, far too many Republicans were focused on corporate tax cuts. Those reforms, while necessary, would do little in the short term to help America’s working class. We argued that families deserved an expansion of the federal child tax credit, that if we valued parents and the role they play in the lives of their children, our tax code should reflect those values. So we put our money where our mouths were, refusing to approve a bill that did not include our request.

Our hard work paid off: Congress agreed to double the size of the child tax credit, putting the needs of working families ahead of the wants of multinational corporations. It was a major victory over the post-Cold War consensus. Nevertheless, it was obvious any more gains we would win would have to be clawed tooth and nail from the establishment.

That remained the case until world events took a nasty turn. In 2020, the COVID-19 pandemic revealed America’s crippling economic fragility. People from every income bracket and background felt the consequences of offshoring and deindustrialization—especially the danger of our markets’ dependence on foreign adversaries—first-hand. Suddenly and (I hope) irrevocably, the stranglehold of the post-Cold War consensus was broken.

Over the last three years, I have introduced bills to re-shore pharmaceutical production, provide long-term, low-interest capital to small manufacturers, accelerate the production of rare-earth elements in the U.S., and increase strategic coordination among federal finance programs. Some of these bills have been dismissed by the Wall Street Journal, but many have bipartisan support, and all are treated as serious proposals. That would not have been the case as recently as 2015.

Nor is the new openness to change restricted to Congress. Pro-working-class institutions like The American Conservative, the think tank American Compass, and the quarterly journal American Affairs were once lonely voices in the conservative movement. Now they wield considerable influence. Meanwhile, more and more mainstream pundits, liberal and conservative alike, are ready to admit that the post-Cold War consensus is “dead,” whether or not they are also happy to see it go.

Don’t get me wrong—there are still plenty of elites giving TED Talks about the power of unqualified free trade and attending conferences in Davos. In fact, they remain the dominant force in Silicon Valley, on Wall Street, and apparently, on the editorial board of the New York Times. But theirs is no longer the first and last word in political economy. There is a growing awareness that we are transitioning from the “end of history” to a new era.

A greater danger comes from those who claim the mantle of “economic nationalism” and industrial policy but undermine efforts at reform with carve-outs for Wall Street donors and China-obsessed climate activists. Read Senator Chris Murphy’s “The Wreckage of Neoliberalism.” Listen to Jake Sullivan’s call for a “new Washington consensus.” You would think the Democratic Party had learned the right lessons from the mistakes of the past 30 years. You would be wrong.

The Biden administration and its congressional allies may borrow populist rhetoric and harken back to the days when the Democrats could really claim to be the party of the working man, but they cannot escape the fact that their donors and supporters are increasingly ideological extremists and beneficiaries of the status quo. Their policies bear that out. The CHIPS and Science Act, for example, is currently pouring U.S. taxpayer dollars into semiconductor companies that operate vast factories in mainland China—building the industrial and technological base of our greatest adversary. Meanwhile, instead of promoting American energy independence, the Inflation Reduction Act has boosted Beijing’s hold on the global solar-panel and electric-battery markets, all in a pathetic parody of environmental activism.

Rebuilding the American economy will therefore require leadership from Republicans, who are unabashedly patriotic and willing to break our dependency on China. Nevertheless, if we want to resurrect the American System—that powerful combination of public policy and market ingenuity that protected our infant republic from being strangled in the crib by Old World empires, turned the untamed West into the American heartland within a matter of decades, and saved the world from the darkest forms of totalitarianism not once, but twice—we cannot stay within the confines of the Republican Party.

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As Michael Lind points out in Compact, creating a new economic consensus will take a multiethnic coalition of patriots who are willing to put the long term over the short term and nation over party. The members of such a coalition may come to it for different reasons—some to counter Beijing’s aggression, others to revitalize working-class communities, still others to strengthen the institution of the family. Nevertheless, if they are united in advocating common-sense, pro-America industrial policy, and if they stand firm against attempts to co-opt populist language for elitist ends, they will have the power to effect lasting change.

When I made the case for a common-good capitalism back in 2019, I was embarking on a lonely journey. But today, the realignment is happening faster than anyone could have imagined, myself included. We saw what a new political coalition looks like last fall in Florida. But only time will tell if we can create such a coalition at a national scale and achieve our long-term goals. For my children and grandchildren’s sake, I hope we can—because if we fail to recover the American System, I am afraid our economy and our country will continue to stagnate and decline.

This article is part of the “American System” series edited by David A. Cowan and supported by the Common Good Economics Grant Program. The contents of this publication are solely the responsibility of the authors.