ISI’s American Economic Forum was at times hostile to economic liberty, but there may be limited appetite for a conservative version of government planning.
ISI’s American Economic Forum was at times hostile to economic liberty, but there may be limited appetite for a conservative version of government planning.
O pening the American Economic Forum on July 29, Intercollegiate Studies Institute president Johnny Burtka presented the two-day conference as an alternative to the World Economic Forum. Nobody likes those people in Davos, and they’ve earned their scorn many times over. He said the purpose of this conference was to “come together despite our differences to create a new consensus.”
The idea of a new economic consensus on the right has been promoted by some groups in recent years. Support for free markets has animated the conservative movement since at least 1955, when William F. Buckley Jr. wrote in NR’s mission statement that “the competitive price system is indispensable to liberty and material progress.” Some now claim that position is outdated, and conservatives must keep up with the times by supporting more government interventions in the market.
The American Economic Forum gave the platform of ISI, a premier conservative organization for young people, to some of those market-skeptical conservative voices. The ballroom at the upscale Omni Shoreham Hotel in Northwest, Washington, D.C., where the conference was held, was set for about 300 people, but the room was never more than half full. Young conservatives’ supposed enthusiasm for market skepticism had not translated into attendance, at least here.
Yet the message from many of the speakers amounted to an unreserved — and worrying — challenge to economic assumptions that have driven the Right for decades. With a few exceptions, their argument was that conservatives should be open to using the tools of government planning to achieve growth, with one guest even claiming that Chinese communism has lifted more people out of poverty than any other economic system.
The conference began with an address by Samuel Gregg. Formerly of the Acton Institute, now of the American Institute for Economic Research, Gregg gave a speech about Edmund Burke, in part based on his upcoming book, The Next American Economy. At a conference for a new consensus, Gregg gave a very thorough case that the old one, support for free markets, is well-founded in the conservative tradition. Gregg urged conservatives to look to Burke for his economic thought, best expressed in the 1795 tract “Thoughts and Details on Scarcity,” of which Gregg held up a first-edition copy.
Gregg noted that Burke was committed to empirically verifiable logic and information in his political economy. It was based on that, not on abstract dogma, that Burke urged greater economic freedom and the abolition of Britain’s mercantilist economic system. Gregg highlighted that Burke “used economic knowledge to underscore the limits of what governments can know,” foreshadowing Hayek’s 20th-century work on what would become known as the knowledge problem.
Things took a turn after Gregg’s remarks. Next came an interview between Burtka and Kevin Roberts, the president of the Heritage Foundation. He made very clear on multiple occasions that he is not a libertarian. Throughout his remarks, he identified as an Aristotelian, a West Coast Straussian, and a “social and cultural conservative more than anything.”
Roberts called for antitrust law to be invoked against Google, and spoke with passion about what he sees as the depredations of Big Tech. But he also defended Heritage’s opposition to the CHIPS Act, which was a source of controversy in the days before the conference. Heritage opposed the bill because it deemed the $250 billion price tag to be too high and found it lacking provisions to properly address China. Roberts’s argument was sensitive to the public-choice critique of subsidies as well, though he said he does not oppose industrial policy outright.
The dinner session featured keynote speaker Robert Lighthizer, U.S. trade representative under Donald Trump. Burtka introduced him as “one of Washington’s greatest statesmen.” He praised as prophetic a 1997 New York Times op-ed from Lighthizer which said that if China were allowed to join the World Trade Organization, “virtually no manufacturing job in this country will be safe.” (Manufacturing employment in the United States peaked in 1979 and had already been declining, following the same trend as in other highly developed economies. As of 2021, 14.7 million Americans are employed in manufacturing, which is more than in leisure and hospitality or financial activities.)
Lighthizer decried America’s trade deficit and called for imports and exports to equalize, which he called “balanced trade.” He said, “That’s exactly what Donald Trump and I did for four years, and the results were astonishing.” (The month Trump took office, the trade deficit was $43.6 billion. It began to increase at the end of 2017, peaking at $55 billion in December 2018. By February 2020, right before Covid, it was $40.5 billion.)
Lighthizer described the Trump administration’s trade policies as “tariffs, threats, negotiations, and industrial policy.” He said government subsidies throughout American history are a primary source of economic growth.
“Free trade is a philosophy of consumption,” Lighthizer said, describing it as “materialistic.” Free-traders “view us only as consumers,” he said, and “no country ever became great by consuming.” During the Q&A session that followed, Lighthizer said, “The best way to fix consumerism is to raise prices. Is consumption really a problem in America?”
Where Gregg was in favor of economic liberty and Roberts was skeptical of it, Lighthizer was outright hostile to it. Lighthizer said libertarianism is “for stupid people” and described it as “the philosophy that if you do nothing, things will get better.”
A different questioner expressed overall agreement with Lighthizer’s message but asked him what would be done about American workers who would be hurt by Lighthizer’s preferred trade policies, pointing to the examples of steel tariffs causing job losses and the China trade war hurting soybean farmers under the Trump administration. Lighthizer said he had not seen any evidence of steel tariffs causing job losses and said, “If we have the policy I want, there won’t be any workers who lose their jobs.” (Larry Kudlow, Art Laffer, and Steve Moore warned about job losses from steel tariffs in 2018. A Federal Reserve report from December 2019 found that the Trump tariffs made manufacturing employment lower than it would have been without them.)
Lighthizer received a standing ovation. He was easily the most enthusiastically received speaker of the conference.
The first speech on the second day was from Representative Jim Banks (R., Ind.), who spoke about “making Indiana’s economy as recession-proof as Washington’s.” (The D.C.-area economy is sometimes described as recession-proof because its primary employer is government.) That was followed by a 15-minute recorded video on “libertarian populism” from Senator Rand Paul (R., Ky.). The first half of Paul’s remarks was about Anthony Fauci, and the second half was about inflation and the Federal Reserve.
A panel followed about whether Wall Street is good for the country. National Review Capital Matters’ Andrew Stuttaford opened with a defense of America’s financial sector, acknowledging its imperfections but pointing to its contributions to helping the human flourishing that free markets make possible. Longtime Washington financial-regulatory expert Mark Calabria, who was chief economist to Mike Pence, also presented a reasoned defense of Wall Street. Calabria noted that finance allows people to bridge the present and the future through lending and borrowing, but the sector is hampered by government, which creates perverse incentives through subsidies and bailouts.
American Compass executive director Oren Cass responded by saying, “If that was the defense for Wall Street, the prosecution can rest its case.” He said Wall Street is bad for America because it does not allocate capital, talent, or risk well. American Affairs editor Julius Krein dismissed Stuttaford and Calabria’s case as “Adam Smith nonsense.” He and Cass talked about the need to “redirect” people away from finance jobs.
Stuttaford had mentioned how regulatory missteps had contributed to the financial crisis that led to the Great Recession. Cass objected, saying, “It’s not that the financial companies did well for themselves. They ran their companies into the ground.” Calabria responded to Cass by explaining how government regulations and the actions of Fannie Mae and Freddie Mac led to the preference for mortgage-backed securities in many financial institutions.
Next came a panel on immigration. Frank Buckley of George Mason’s Scalia Law School argued for a points system similar to the one in use in his native Canada. Michael Brendan Dougherty of National Review argued against the acceptance of an illegal labor pool in the United States and argued for common bonds between immigrants and the native-born. Helen Andrews of The American Conservative argued for shifting the case for immigration restriction to include high-skilled Asian immigrants as well as low-skilled Latin American immigrants, arguing that Asian Americans vote about 70–30 for Democrats over Republicans.
Moderator Daniel McCarthy, editor of Modern Age, brought up that some Democrats argue for increased immigration because they believe it will help them electorally, and he pointed out that that is the flip side of Andrews’s view. Andrews approved. Buckley said, “Well then you’re just like them,” meaning the Democrats. “And that’s not a compliment.”
The afternoon began with a panel on a right-wing approach to environmentalism. National Review’s Nate Hochman used Roger Scruton’s thought to justify a conservative approach to conservation. Karly Matthews of the American Conservation Coalition argued that conservatives should “find a balance” with progressive environmentalist groups, and that the issue is crucial to winning younger voters.
Emmet Penney, a nuclear-energy advocate associated with Michael Shellenberger, an author and independent candidate for governor of California, was on this panel as well. He told the story of how he had lost his job and was able to remake his career with Shellenberger’s help; Penney now edits Grid Brief, an online publication about the energy industry. A questioner asked him about the preceding day’s comments from Lighthizer about the need to reduce consumption and how that relates to the energy conversation. He replied, “I’ve been too broke in my life to ever support that,” which was greeted with applause from some attendees.
The next panel, on foreign policy, was largely focused on China. Michael Anton of Hillsdale College’s Kirby Center and Asia Times columnist David Goldman spoke mostly about what they considered the “existential threat” from China. Will Ruger, president of the American Institute for Economic Research, warned against justifying broad protectionism with national-security logic. Of Lighthizer’s comments about lowering consumption with rising prices, Ruger said, “It’s hard to imagine that being an exciting agenda.” Ruger was one of the only speakers to explicitly push back on Lighthizer’s remarks and the call for more protectionism.
Next came a speech by Phillip Blond, director of British think tank ResPublica, about Red Toryism for America. Blond was wearing a sky-blue suit with a sky-blue shirt and a darker-blue tie and gave an esoteric speech against liberalism and against nationalism, which he considers an outgrowth of liberalism. He decried “free-market monopoly” and said liberalism always results in oligopoly. “At best, in all of its foundational texts, liberalism is the denial of every other standard except unconstrained human will,” he said. He also said, “National conservatism is not conservative and does not conserve the nation.”
He viewed politics through the lens of class, saying, in the Q&A that followed, “In America, class is almost caste,” and said that is truer here than in England or France. He argued for the need to “recraft conservatism as a redemptive project that rescues people from their lot.”
A questioner inquired as to some positive aspects of economic liberalism, and mentioned that liberalization had coincided with more people escaping poverty than ever before in human history. Blond replied, “That’s not true. The social system that has lifted more people out of poverty than any other is Chinese communism.” That comment provoked no reaction from most attendees, with a few approving nods.
Blond returned for the conference’s closing panel, with Gregg and former senator Rick Santorum. Santorum came with his book, It Takes a Family, which was published by ISI. He essentially gave a stump speech from his 2012 presidential campaign, shouting at times. He mentioned that his idea for blue-collar conservatism was brought to fruition by Trump and argued that it is the future of the movement. “We are a party of blue-collar workers,” he said. “We are a party of people who aspire to marriage.”
Santorum thinks blue-collar workers have to be the foundation of the conservative movement because the suburban middle class is lost. “They have gone woke. They have bought into the ideology of materialism and self,” he said. Of abortion, he said, “The Left is right when they say, ‘You only care about them when they’re born, not after they’re born,’” and argued for more social spending. He said that people speak ill of Hungarian prime minister Viktor Orbán because Orbán “stands up to the Left.” Santorum dominated the panel and was second only to Lighthizer in his reception by the audience.
Despite 40-year-high inflation, there was no panel or speaker on monetary policy, besides Paul’s brief comments about the Fed in his video. The looming recession was mentioned by Banks, in the context of mocking the administration for its definition games around the two quarters of declining GDP, but didn’t receive much attention otherwise. Supply chains weren’t discussed. Few speakers mentioned welfare, and there really weren’t even any irritable mental gestures toward welfare reform. The decline in the labor-force participation rate and the labor shortage that has resulted did not come up. High gasoline prices were mentioned by Roberts in the context of Biden’s regulatory policies around energy, but they weren’t a focus of conversation either.
Instead, the overarching message from most speakers was about saving Americans from their own choices. What are we going to do about Americans choosing to work in finance, Americans choosing to buy imported goods, Americans choosing to use products from Big Tech, Americans choosing to hire immigrants, etc.? And the antecedent of “we” in that question was nearly always the government.
Take Lighthizer’s line about libertarianism as “the philosophy that if you do nothing, things will get better.” Though libertarians likely wouldn’t use this formulation at all, it would be closer to the truth to say that libertarianism is the philosophy that if government does nothing, things will get better. The entrepreneur and the private charity hardly existed at this conference.
Conservatives would do well to remember the antecedents in statements about economic policy. If “we” is consistently the government, it’s the same trap the Left falls into, and it will yield similarly disappointing results.
The grammatical point may seem pedantic, but Adam Smith saw a relationship between writing and liberty. In The Theory of Moral Sentiments, he wrote, “The rules of justice may be compared to the rules of grammar; the rules of the other virtues, to the rules which critics lay down for the attainment of what is sublime and elegant in composition. The one, are precise, accurate, and indispensable. The other, are loose, vague, and indeterminate.”
The precise, accurate, and indispensable rules of justice, when upheld, allow for liberty. When talking among themselves, conservatives ought to be debating the loose, vague, and indeterminate rules that admit of gradations, with a common grammar grounded in the ordered liberty of the Anglo-American tradition. Instead, this conference was often in need of a grammar lesson.
According to the World Economic Forum, ordinary people are helpless bystanders who must be saved by the wisdom of technocrats guided by their notion of the common good. According to the American Economic Forum, ordinary people are helpless bystanders who must be saved by the wisdom of conservatives guided by their notion of the common good. It’s central planning with conservative characteristics. Free markets, entrepreneurship, and, fundamentally, liberty are not top concerns.
That’s a major redefinition of conservative economic thought in America, especially since ISI was founded by Frank Chodorov and William F. Buckley Jr. in 1953 as the “Intercollegiate Society of Individualists,” committed to defending free markets and individual liberty.
There’s nothing inherently wrong with entertaining new perspectives on economic policy. Conservatives are at their best when they debate among themselves because those debates sharpen our ideas. But the Left’s government-knows-best approach to economics isn’t wrong only because it comes from the Left; it’s wrong because government does not know best.
America needs relief from government planning, not a new conservative flavor of the same failed prescription.