Conservative economic thought is undergoing a significant identity crisis. Oren Cass, founder of the think tank American Compass, argues that the traditional Republican platform of free trade, limited government, and fiscal responsibility is outdated. He believes the post-Trump right-of-center needs a new economic vision, advocating for activist industrial policies and tariffs.
This shift pits Cass-style "productive pluralists" against traditional free-market proponents like Norbert Michel of the Cato Institute. Michel, author of Crushing Capitalism, contends that much of Trump-era populism is not new, citing historical figures like Pat Buchanan and Ross Perot. He argues that the narrative of wage stagnation is inaccurate, with U.S. median household income showing significant growth. Michel attributes the decline of manufacturing to productivity growth, not solely to international trade agreements.
Alex Tabarrok, a professor at George Mason University, echoes that Americans today live better than citizens in many developed nations, citing larger homes, better technology, and a vast array of goods. However, he acknowledges that global trade creates winners and losers. Tabarrok also notes a trend of "grievance" on both the left and the new right, suggesting that societal angst is being misattributed to economic factors.
The traditional free-market model, once ascendant in academia, is now facing challenges. While neoclassical economics dominated for decades, its data-driven, mathematically rigorous approach struggles to translate into today's political arena. Some suggest that the Austrian school of economics, with its more verbal and narrative-driven approach, might offer a more resonant alternative.
Robert P. Murphy, a senior fellow at the Mises Institute, believes Trump has permanently altered the conservative coalition. He suggests that future iterations of conservatism will likely be distinct from past eras, with the "genie out of the bottle."