In the 21st century, we need a new policy that can build the competitive businesses of the future and create high-wage American jobs.
With the release of her plan for “economic patriotism,” Democratic presidential candidate Sen. Elizabeth Warren, D-Mass., appears to agree.
There is just one problem: America’s radical progressive movement is incompatible with an agenda that truly confronts the challenges of our time, such as the rise of China and decline of working-class economic stability.
The idea of real “economic patriotism” does indeed provide the best framework for America to confront these challenges. It requires that we put our nation’s interests first and define those interests as the economic development of American businesses and workers. So far, so good.
But true “economic patriotism” would require making America more productive in essential ways that violate the stated goals of Warren and other progressives. Progressivism requires that today’s Democratic Party mistake cultural fights and upper-middle-class material interest for real productivity. This error reveals itself by leaving out or opposing all sorts of policies that would benefit American workers. Here are a few.
Economic patriotism should limit low-skilled immigration. An honest agenda for how to create good American jobs should recognize that our broken immigration system allows businesses to rely on cheap labor rather than investing in increased wages and productivity.
Large increases in low-skilled migration reduces the wages of American workers and shifts the composition of our economy into low-value-added services over high-value-added manufacturing.
Economic patriotism should recognize that environmental regulations come at the cost of manufacturing jobs. There must be a happy medium here. Not even the Green New Deal could change the simple fact that industrial property, plants, and equipment are not natural habitats, and making things requires energy resources and material inputs.
Greater production of America’s highest value exports, like airplanes and automobiles, will inevitably increase carbon emissions. This is the cost of any increase in economic output.
A changing climate will require investments in mitigation and restoration, but a progressive ecological utopia can only come at the direct expense of high-value jobs and long-term economic prosperity.
Economic patriotism should support President Trump’s trade actions against China. We cannot afford to understate the challenge that China poses in the 21st century. Warren acknowledges that China has “weaponized its economy” and is making “an effort to surpass the United States as a global technological power,” but inexplicably opposes the president’s tariffs on China.
An “economic patriotism” that doesn’t recognize Trump’s confrontation with Beijing as the most consequential action for American industry in recent history isn’t worth much at all.
Economic patriotism understands the role large corporations should play in our economy. Large-scale American corporations that can dominate global competition, the very idea of which Warren often derides, will be our national champions by necessity in the years to come. There is no route to mass employment that does not run through them.
To the extent that our current national champions are failing to invest, as I detailed in a recent report, we should reorient public policy to ensure they will either perform the institutional role required of them by capitalism or get beaten out by a new competitor that will.
Mandating that large corporations reserve board seats for their workers, as Senator Warren and other Democrats have proposed, is a tangential goal at best. Industrial policy is physical investment policy, and institutional arrangements should follow from this initial priority.
Economic patriotism should promote alternate paths to higher education for working-class students. Good-paying employment in technical vocations is more productive for both workers and the country as a whole than pushing students into colleges that provide little value for their expense.
Warren acknowledges this, but nonetheless advocates a $1.25 trillion student loan forgiveness scheme that would prop up these unproductive schools and disproportionately benefit affluent graduates.
A proper policy would better our align priorities, shifting federal resources away from destructive ideological studies and bloated four-year universities. Instead, we should be better preparing for future needs, prioritizing things like research and development, industrial organization, physics and mathematics in order to achieve the national interests of the 21st century.
Economic patriotism requires a strong national defense. This is true at a very basic level because the largest government source of demand is military spending.
A robust defense and industrial base creates investment opportunities for American companies, jobs for American workers, and most importantly maintains American armed forces’ edge over our enemies.
America’s decline on the economic value-chain is not inevitable. It is not due to external forces like automation or globalization, but to our own policy decisions as a nation, which have often prioritized financial over real investment, digital over physical innovation, and foreign over domestic labor.
Warren’s “economic prosperity” plan marks the first attempt by 2020 Democratic presidential candidates to confront the challenges America faces. But her plan is destined to fail. It will never find a home in the modern Democratic Party dominated by identity politics and held hostage by special interests.
Real economic patriotism can and should find a home in a conservative movement that is willing to realign public policy to prioritize the long-term health and prosperity of our nation.