In a recent Hub Dialogue, Oren Cass, the founder and chief economist of leading U.S.-based think tank American Compass, joined host Sean Speer, The Hub’s editor-at-large, to discuss growing economic heterodoxy among conservatives on issues of free markets, global trade, and industrial policy.
In the age of Donald Trump, New York Times columnist, David Brooks, has referred to Cass and his heterodox economic views as “the centre of gravity in American conservatism these days.”
During his Hub Dialogue, Cass spoke about challenges to conservative economic orthodoxy and his case for a new consensus focused less on GDP growth and more on the notion of human flourishing. Five of key takeaways from the conversation are set out below.
1. On the state of modern economics and human flourishing
“The economists are saying, ‘you know, hollowing out American industry and getting cheap stuff from China is good.’ How could that possibly be? You dig down far enough, and you realize that, actually, a very core assumption of modern economics is that the goal is consumer welfare. And in fact, the goal is to consume as much as you can while working as little as possible. I mean, if you think about kind of what the model of rational man says, in theory, that’s what optimization would be: how much can I consume while exerting how little effort?
And if that’s right, then, actually, you can build very quickly to things like ‘free trade with China is course, is great.’ But you, I think, also look at that and say, ‘that can’t possibly be right.’ I mean, put economic modelling or whatever to the side. Put all the empirical research to the side. There’s nobody with any real human experience who I think would take that seriously as a very good description of human flourishing.”
2. On the importance of manufacturing
“You know, manufacturing is the underpinning of productivity growth, for the most part, because this isn’t true of all services, but by and large, a huge part of a service economy, these are things that are very hard to scale. You know, I use haircuts as an example. It takes about as long to cut somebody’s hair as it did 500 years ago, probably a little longer now, if anything, given the demands of our styles. So how is it that we pay a barber whatever orders of magnitude more than we did? It’s not that the barber is technically more productive. It’s that he’s cutting the hair of much more productive people. And you see this over and over again, that where you really get the productivity growth at the core output level is in the use of materials, the use of automation, the use of engineering that allows us to make more stuff with less labour. And that, in turn, fosters so much of the prosperity that a community can enjoy.”
3. On market intervention and limited government
“I certainly support limited government and in many ways, I see what we’re proposing as expanding government’s role in some places, but just as quickly, if, especially if things go well, reducing it in other places. I mean the amount of regulation and redistribution that we need because we’ve said ‘we’re just going to let markets rip on the front end and not worry about workers’ is extraordinary. I would much rather have a tariff and need to do an awful lot less redistribution on the entire classes of workers that have been left behind as a result. And so, I think, you know, in my mind, the question is always ‘compared to what?’ Because in almost none of these areas is there some option of just ‘we do have brilliant technocrats who wisely decide to do nothing.’ There’s always a policy being made. The choice not to do something is also a choice that has to be made.”
Jaronte Wright gets a haircut from Lonnie Smith in Milwaukee, Saturday, July 13, 2024. Jae C. Hong/AP Photo.
4. On the trade-offs of economic growth
“I think it’s important to acknowledge that there are all sorts of trade-offs and that we actually have to be willing to make those trade-offs. And so you know, if you said, ‘look, this is going to lead to lower economic growth in the way that we’ve typically measured it, but on the other hand, it’s actually going to lead to sort of a better distribution of of of wealth and opportunity for communities, for workers and their families, and that’s sort of going to lead to everybody being better off in their own lives,’ that would be fine with me.
And I would also question how we’re going about measuring economic growth, in a sense. I mean, the funny thing about even the concept of economic growth is that it has become a question-begging exercise in mostly a fight over what we define as good. And so if what you’re saying is, ‘well, look, you know, people’s TVs aren’t going to keep getting as big as fast as before.’ That’s fine with me, and I think it would be fine with the overwhelming majority of people. And so, you know, I think those kinds of trade-offs are important to acknowledge.”
5. On forging a new economic consensus in the age of Trump
“Trump’s rise in 2016 was extraordinarily important as just a disruptive force. I think it showed how broken a lot of the old orthodoxy was. Politically, the old model was clearly not what people wanted. And substantively, there were clearly much more serious problems in the country than the GDP numbers might have indicated… But he doesn’t bring a sort of fully formed agenda for what comes next or how to solve these problems…
There’s a large set of folks in the U.S. Congress—Senator Vance, of course, one of them now on the Trump ticket, but also Senator Rubio, Senator Hawley, Senator Cotton, and the list gets longer than it used to be—who are sort of fleshing this out and developing legislation around it. They are quite clearly the future leaders of the party in terms of where momentum is headed.
And if you look away from elected leaders toward where the next generation of, you know, writers and analysts and people in every part of the conservative movement are, they are overwhelmingly thinking in these terms as well. I think there will be all sorts of ups and downs and bumps along the road, but our goal is really our mission statement. It is to change the economic consensus that undergirds policymaking and policy debate in the U.S. and that is good work that we can be doing, regardless of who’s in the Oval Office at any moment in time.”
