A New Conservative Think Tank Challenges ‘Market Fundamentalism’

W ells King is the research director for American Compass, a new think tank. Writing recently at NRO, Oren Cass, the organization’s founder, said it was “dedicated to helping American conservatism recover from its chronic case of market fundamentalism.” King has previously worked for the Joint Economic Committee and the management-consulting firm McKinsey. He discussed his views on public policy and the goals of American Compass with National Review’s Daniel Tenreiro. The interview is edited for clarity and brevity.

Daniel Tenreiro: Could you give us an overview of American Compass?

Wells King: The goal of American Compass is to restore an economic consensus that emphasizes the importance of families, communities, and industry for the nation’s liberty and prosperity. It’s about returning to an older sense of what economics is for and the types of economic policies that conservatives should use to support the ends that they believe in. We look out at the conservative public-policy ecosystem and see a lot of redundancy. Nearly all the think tanks on the right that deal with economic policy are either explicitly fusionist institutions, such as the Heritage Foundation, or explicitly libertarian. It’s very difficult to find a public-policy institution that promotes a distinctly conservative approach to economics. That’s the gap we hope to fill by articulating a vision for conservative economic policy that is distinct from libertarianism, but also distinct from the left’s. Our approach acknowledges the role of traditional social institutions, including the family, the Church, and voluntary associations.

DT: So you believe there’s a problem with conservative policy thinking that primarily affects the working class. What is the main culprit here? Do you consider the challenges of the working class primarily economic or primarily cultural? In other words, do you think that increasing workers’ incomes will solve the problems you’ve identified?

WK: I don’t think it’s just about increasing incomes. The fact that this is the default way that we think of economic policy with respect to the working class is a reflection of the lack of imagination and clear-sightedness in policy analysis on the right. It’s a mistake to completely decouple economics and culture.

There’s a general problem with the prevailing policies the U.S. has pursued, which is most clear in our trade policy with respect to China. The data and evidence are very clear about the effects that this has had on trade-exposed communities. Acknowledging that there are real, unintended, unforeseen costs and consequences of our trade policy should lead us to recalibrate when it comes to trade. It is also evident in our immigration policy, which affects the economic prospects of a lot of low-wage people. And it hasn’t helped our societal division — in many respects, it may be the polarizing issue. Another place is family policy. During the debate on the 2017 tax bill, Senator Lee and Senator Rubio really had to work incredibly hard, and they faced all kinds of countervailing forces within the right to be able to get child-tax-credit reforms through. These were effectively middle-class tax cuts, and that they faced such headwinds and institutional challenges within the right says we probably aren’t thinking about family policy in the right way, either.

DT: I see a bit of a contradiction. If we look at all sorts of the measures of prosperity, adjusted for inflation, working Americans on the whole are not doing terribly poorly. Their living standards might not have improved dramatically over the past 30 or so years, but there’s not the kind of economic devastation that we might expect given the increase in deaths of despair, all these kinds of cultural problems, all these family problems, which we both agree exist. Maybe it’s something other than economics. But the policy proposals from your coalition — wage subsidies, tax credits, affordable health care — primarily address the financial dimension.

WK: I would disagree with two things that you just said there. First, your characterization of the financial well-being and material living standards of the working class is not entirely fair. If you think it is, I encourage you to read Oren Cass’s cost-of-thriving index report. Second, aggregate measures of well-being are problematic. Problems such as deaths of despair and the fallout from the China shock, which David Autor and his colleagues have documented — these are geographically concentrated problems, but these don’t necessarily characterize the entire country. We need to acknowledge that the aggregate economic statistics do not map neatly onto social reality.

DT: I think you’re right about these problems being localized. But I wonder why you need a sweeping structural change to address problems that are regional, rather than more targeted policies such as transfers to affected citizens. If trade has hurt some number of millions of Americans in specific localities, why does it make sense to extrapolate from that that we need to fundamentally change the way we view markets?

WK: Well, the harms of trade exposure are the consequence of a national policy decision. Trade deals are made at the national and international level. These are national policy decisions, so trade in particular has to be addressed at a national level.

DT: Well, let’s say you can locate 2 million people in the United States who have been disproportionately affected by trade policy. And at the same time, you have broad benefits, as far as lower costs for consumers, higher productivity, and so on. There’s the classic winners-and-losers argument: We should try to help the losers through various kinds of programs — transfers, educational training, and so on — without totally reorienting our national trade policy.

WK: That’s almost an attempt to deny the problem that there were losers in the first place. What you’re suggesting is that there is no way that we should try to explore how to ensure that there aren’t losers or at least that the losses aren’t devastating. I think we have to approach this with a view that policy reform and policy change are possible. We don’t have to accept these losses as a given. There are reforms and changes that we can make to stem the bleeding. Also, the loss is almost exacerbated by the idea that what trade-exposed communities need are transfer payments and reeducation and grants, so they can move elsewhere. It is incredibly demeaning and demoralizing to suggest that a check in the mail is an appropriate response. At American Compass, we see work as well as rootedness in a family and a community as essential to the dignity and well-being of every person. We should be concerned with the long-standing vitality of communities within the United States.

DT: That’s an argument that is not necessarily economic, and it makes sense. But there’s a tension: If you look only at economic measures, let’s say paychecks, then a system where you have a free market is going to produce the best outcome from a dollars-and-cents point of view. You respond that this kind of analysis ignores all of these fundamental questions of community, dignity, and so on. But when you move into policy, it’s quite difficult to use the federal government restore people’s dignity.

WK: I think that mischaracterizes what we’re trying to do. We acknowledge that government is not, on its own, going to be able to re-create dignity, but what it does is help to create the conditions in which that dignity can actually emerge. No sensible conservative policy says that the state can replace the family, but a sensible conservative policy acknowledges that the state can help support families.

DT: Well, let’s just use family policy as an example. If our current predicament is not primarily economic, then strengthening the child tax credit is not going to solve it, right?

WK: The idea that all the government can do is tax and transfer — that all the government can do is cut a check to people — assumes that the government doesn’t set up the rules of our economy. The state has always been involved in setting up the market. States have to guarantee protection of property rights and contracts, charter firms and businesses. The state, even in the freest economy, is going to have a role to play. Taking money from one group and redistributing it to another is not adequate to solve the problems that we’re facing.

DT: So what’s an example of a policy that would go beyond transfers or something of that ilk?

WK: We could reform our organized labor law, for instance. Our current system of organized labor does not solve the needs of workers, and union membership in private-sector unions is at an all-time low. If you look at the underlying reasons, it’s a structural problem. It’s the way that the Wagner system [private-sector labor laws enacted in the 1935 National Labor Relations Act] is set up — the collective bargaining it allows is incredibly narrow, and the types of organizations it permits are quite limited. Unions are a great mediating institution, the place that exists to meet a particular material and economic need, yes, but they also provide all kinds of immaterial benefits: a sense of belonging, a particular role for people within their workplace, in their community. Reforming our federal laws to expand the scope of collective bargaining and permit new forms of organization might give labor unions a greater, positive role in our economy and attract workers back to them. That’s more of a structural reform that would address workers’ needs and help rebuild a once-durable institution.