We Won’t Go Back to Libertarian Economics
Editor's Note
Donald Trump has won a decisive victory, and Republicans are on track for comfortable majorities in both chambers of Congress. The GOP— especially the New Right — seems to have a mandate to rule.
Engaged in urgent warfare against a deadly enemy, Republican politicians have largely neglected to form around a compelling and comprehensive vision. They have spent the better part of a decade on the defensive. The Republican landslide has opened up a new theater. Operating effectively within that theater will require Trump’s coalition to sort out its internal divisions, to agree upon a common playbook by which to combat the destructive Left.
At the 2024 National Conservatism conference, Vivek Ramaswamy proposed a framework for understanding these divisions as chiefly between “National Protectionists” — the hard-MAGA position of trade protectionism, immigration restrictionism, and aggressive use of the executive branch — and “National Libertarians” — those in the GOP who have moved beyond the “twentieth-century neoliberal consensus”, but who break from the emerging New Right consensus on issues like trade, immigration, and executive power where the GOP has become increasingly anti-libertarian.
Oren Cass, the chief economist for American Compass and one of the leading economic thinkers of the New Right, argues that the National Libertarian position on economic issues is intellectually flawed and politically doomed — that what Ramaswamy calls “National Protectionism” is, in effect, the only way forward for Trump’s GOP. This is the first in a series of essays on National Protectionism, National Libertarianism, and the path forward for a newly empowered Right.
A chasm has opened within American conservatism between an old guard whose blind faith in markets has degraded the common citizen’s quality of life and a New Right determined to restore a focus on workers, their families and communities, and the national interest. At its heart, the dispute is an economic one. What is the proper goal for an economy? What has gone wrong and why? What is the role for government in charting a better course?
Vivek Ramaswamy clearly sees himself as a peacemaker in this struggle, and has proposed a new ideology halfway between the two sides that he calls “National Libertarianism.” The problem with positioning oneself halfway across a chasm, though, is that there is nowhere to stand; only a long way to fall. If National Libertarianism contains a theory of the economic problems afflicting the United States, or a vision for how to address them, Ramaswamy hides it well.
What is National Libertarianism? The best description would be warmed-over market fundamentalism with a dash of nationalism sprinkled on to mask that past-the-expiration-date funk. Ramaswamy focuses on three issues — trade, immigration, and the regulatory state — and in each case winds up embracing the old-guard economic view, almost inadvertently, for lack of anything else to say. His critique of the New Right alternative, to which he assigns the tellingly redundant term “National Protectionism,” is mostly that it takes seriously the need to depart from the old orthodoxy, which he makes no effort to defend.
Take the issue of trade. Donald Trump believed “that the top objective of trade policy shouldn’t just be to blindly increase the size of the economic pie but instead to advantage American manufacturers,” says Ramaswamy. But he disagrees. Rather, his own departure from the old orthodoxy would focus “exclusively on eliminating U.S. dependence on China in those critical sectors for U.S. security.” That’s an important issue, no doubt, but hardly the only one. What about the health of the domestic industrial base, the allocation of capital to productive activity, and the quality and dispersion of good blue-collar jobs nationwide?
Ramaswamy acknowledges that some people, namely National Protectionists, are concerned about such things, while he is not. Why the difference? He posits a tradeoff between nearshoring and onshoring. Decoupling from China means more trade with allies, so “if your top objective is to protect American manufacturers from the effects of foreign competition, then you’re necessarily extending the time period it’s going to take to actually decouple from China.” Perhaps at the margin there’s some truth to this — a strategy that considers multiple objectives will pursue any given objective less single-mindedly, even when, as here, the objectives are largely complementary. But the best strategy is not the narrowest one, it is the one that achieves the most good with the scarce resources available.
Free trade with China had two disastrous effects: hollowing out our industrial base and leaving us dependent on supply chains controlled by an adversary. A response that addresses both problems is preferable to one that does not, and the moment when policy seeks to force supply chains out of China is obviously an opportune one to welcome them in to the United States. Industrial policy that subsidizes domestic investment in sectors previously offshored to China, or otherwise makes such investment more attractive, does “protect American manufacturers,” but it shortens the time period for decoupling by accelerating deployment of new capacity. If tariffs on third countries slow movement out of China somewhat but yield more reshoring as well, that’s a trade worth making. The goal, after all, is not to bring trade with China to zero tomorrow. This is not the Dunkirk evacuation. The goal is to rapidly reduce dependence, which a partial migration achieves. We shouldn’t worry about reindustrializing because we have to focus on moving production out of China is not a thoughtful solution to an irreducible dilemma, it is a pretextual excuse not to address a reindustrialization challenge that fits uncomfortably in a libertarian framework.
On immigration, Ramaswamy throws in his lot more clearly with the market fundamentalists. While he does a fair job summarizing the New Right view that one American job paying $20 per hour is preferable to two immigrant jobs at $10 per hour, and further that “cheap foreign-born labor has actually impeded the quality of innovation in the United States,” he does not agree, or at least he does not see these as salient considerations. “Immigration policy should not be labor policy,” Ramaswamy says. The proper objectives are “to protect U.S. national security, to preserve U.S. national identity, and to promote U.S. economic growth,” rather than to “myopically promote[] American worker wage growth even at the expense of these other important national objectives.” How would worker wage growth come at the expense of national security, national identity, or economic growth? Again, he does not say. Though, again, this supposed tradeoff conveniently saves him from conceding that the New Right has identified a problem and offers a solution.
Finally, Ramaswamy arrives at his favorite topic, the “regulatory state,” which he intends to “dismantle…altogether — permanently, once and for all, to burn it down to ashes.” Is that really possible? Or necessary? Or wise? Or responsive to some major problem? Apparently, National Libertarians “believe this is the best way to advance the interests of American workers and manufacturers.” But that seems to be entirely a conclusory instinct—“uttering phrases out of habit, out of muscle memory, rather than remembering why we utter them,” to use his critique of others on the Old Right and surely not himself.
In perhaps his most perplexing passage, Ramaswamy says:
National Protectionists believe that the failure of poorly run companies in regulated industries like aviation and railroads means that we need more regulations to protect workers and passengers in those industries. It’s a reasonable view, but the National Libertarian believes that the regulatory state itself was the root cause of those failures in the first place. To be clear, we all agree that it is utterly unacceptable for American companies or government contractors like Boeing to build airplanes with doors that fly off mid-flight, or trains that contain toxic chemicals flying off the rails in places like East Palestine in my home state of Ohio. But we differ in our diagnosis of the problem and therefore in our respective vision of the ultimate solution.
These are the sentences of a politician hoping to win everyone’s vote, not the analysis of someone claiming to advance a serious ideological vision. The National Protectionist view cannot be both “reasonable” and precisely the opposite of the correct view. And seeing as these diagnoses differ so dramatically, it would be incumbent on the expositor of his alternative perspective to share what his diagnosis is. How did too much regulation cause Boeing’s collapse or a rail disaster?
“Take the CFPB,” says Ramaswamy. That’s not drawn from elsewhere in his remarks. Those are the next three words after the passage above. He has no explanation of how the regulatory state caused the decline of American industries that suffer primarily from offshoring, thanks to globalization, and declining investment, thanks to financialization. But he does have a bone to pick with Elizabeth Warren, and a rant prepared on consumer financial protection.
Ramaswamy summarizes the difference between the New Right’s economic populism and his own absence of economic philosophy as “a question of prioritization.” In his account, “the National Protectionist view focuses on guaranteeing wages for American workers and to elevate the prices that American manufacturers are able to command in the marketplace.” Of course, that is not the National Protectionist view. (Wage guarantees? Elevating the prices American manufacturers can charge? What?) He contrasts this with the National Libertarian view, which sees “dismantling the regulatory state as its top concern — not because this objective is more important than adopting policies that help workers and manufacturers but because it is the best way to help American workers and manufacturers.” So, then, not a question of prioritization at all. Ramaswamy posits the presence of two sides with opposing theories of the case, but he seems not to understand the other side and has no theory for his own.
The difficulty is coalitional too. “For the first time in modern American history,” says Ramaswamy, “the National Libertarian dream is no longer a fantasy but an achievable reality.” He means this in administrative terms, given recent Supreme Court decisions limiting agency discretion. It’s not clear how less authority in the executive branch leaves a president “more empowered,” seeing as the president is the chief executive. But even if the mechanics work, the politics do not.
Where is the constituency for National Libertarianism?
On one side of the ongoing battle, legacy institutions strain to hold together the so-called “Fusionist” coalition of economic libertarians, social conservatives, and global adventurers. On the other, emerging institutions gleefully defenestrate libertarians and adventurers, welcoming in their place a multiracial working class that is conservative on social issues, wary of foreign entanglement, and eager to see economic forces better harnessed. On one hand, the Fusionist coalition is proven but fading. On the other hand, the working-class coalition has a clear path to a durable governing majority, even if constructing and consolidating it remains a challenge.
National Libertarians lose large swathes of the Fusionist coalition with their restrained foreign policy, their rejection of “neoliberalism” (if not any of the actual economics), and their burn-it-down attitude. But they add few of the working-class voters attracted to the New Right’s focus on workers’ interests, higher wages, domestic industry, and so on. It’s not even clear how many libertarians, famously insistent on ideological purity, are on board with a “National” modifier intended to undermine globalization, free trade, and open borders. Who, besides Vivek Ramaswamy, is a National Libertarian?
The project fails because it was lab-designed to occupy a tactically useful political space, not built on an intellectually coherent foundation or formed from popular demands. Political movements flourish when they help real people solve real problems. “An important part of the reason why the historical neoliberal consensus failed our country was not just that it failed to predict certain adverse consequences of its policy prescriptions,” says Ramaswamy at one point. “The deeper problem with the old neoliberal consensus was the intellectual laziness and capture through which it earned its staying power.” Well, no, the deeper problem was definitely the failure.