But as we look to the next generation of conservatives who will lead the post-Trump Republican Party in the future, we see signs of big changes. Over the past few years, the junior senators led by Marco Rubio, J.D. Vance, Josh Hawley, and Tom Cotton have released a flurry of proposals to restructure global trade and counter China, rebuild domestic manufacturing, remove environmental restrictions on industrial development, enforce immigration laws and reduce the influx of low-wage workers, curb mergers and tax stock buybacks more aggressively, shift resources from higher education to non-college paths, and provide direct financial support to working families instead of child care subsidies. (My organization has worked with all four senators on a range of proposals.) They have joined striking workers on picket lines, pushed for higher minimum wages, and called for tighter regulation of railroads. It is no coincidence that Rubio, Vance, and Cotton are all in the spotlight as potential vice presidential candidates for Trump.
Reform conservatives have areas of agreement with Democrats and the opportunity for significant progress. Several bipartisan bills have already been passed. But their positions on immigration, climate, education, and family policy indicate different priorities. They also combine this economic policy with overt patriotism and more traditional views on hot-button issues like policing, racial prejudice, and transgender athletes.
This more populist, conservative economics has two strands that offer the best hope of rebuilding capitalism to serve the prosperity, liberty, and security of the American people first and foremost. The first strand is to create productive markets, which begins with acknowledging that many markets are not. As Adam Smith put it in his metaphor of the “invisible hand,” the key to capitalism is that private actors pursuing their own self-interest can act in ways that also promote the public good, but only if the activities that produce the greatest profits are also activities that produce widespread benefits. Smith makes this very clear: for the “invisible hand” to work, capitalists need to “give preference to the support of domestic industry over foreign” and to “direct that industry so that its products attain the greatest value” and thus “provide income and employment to the greatest number of people in the country.”
These are crucial constraints that modern economists overlook. If companies can make bigger and easier profits by moving production to countries that exploit workers or by bringing in low-wage foreign workers, that’s exactly what they will do. If the highest salaries go to Wall Street speculators and the developers of addictive social media algorithms, the most promising business leaders will go into those professions. What percentage of Ivy League graduates will put their talents to work in jobs that increase the productivity, and therefore the income potential, of people without college degrees, or create booming new businesses in struggling regions? It’s not surprising that productivity growth, needed to raise wages, has slowed and turned negative in manufacturing, and that the long-standing pattern of American economic development, in which poor regions catch up with richer ones, no longer holds.
The tragedy, but the good news, is that these trends are not inevitable. They are foolish policy choices, which means we can make different choices. Instead of globalization that leaves workers behind like unsellable inventory and hollowed-out communities, we can structure our trade and industrial policies so that the path to profits is through domestic investment and creates productive jobs across the country. Instead of allowing immigrants to enter the country illegally and employers to exploit them, we can rigorously enforce our laws, further restricting entry into the lower end of the labor market, and forcing employers to offer American workers good, productive jobs instead of pricing them out.
