This off-shoring/out-sourcing trend, when combined with environmental concerns, is limited not just to production but also to basic resource acquisition. Consider that U.S. leaders have neglected to maintain the country’s access to the critical minerals and materials necessary not only for retaining our military advantage but also for high-tech manufacturing and renewable energy technologies. Without these resources, twenty-first-century industrial leadership and real economic progress itself become impossible. America closed down its own primary rare earth minerals mine in Mountain View, California in the 1990s. Since then, China has come to account for 90 percent of global rare earth production, establishing its dominance in both mining and refining and leaving America to depend on a strategic competitor for 80 percent of its critical mineral imports. Once again, the Department of Defense has sounded the alarm on this matter, also noting in its 2020 Industrial Capabilities Report that:

[Emerging] technologies pose new problems for defense contractors and for the Pentagon in securing a trusted supply chain for critical items such as processed rare earth elements and microelectronics, where gaps and unanticipated interruptions can be triggered by the loss of a sole supplier for purely economic reasons, or by an embargo or military action by an adversary. Events of either type can jeopardize a sustainable industrial base.

The United States—having shorn its industrial-technological capacity and forfeited control over key resources and supply chains—is thus ill-prepared for an era of great power strategic competition. The ongoing Russo-Ukrainian War—arguably a de facto proxy war between the West and Russia over Ukraine’s agricultural bounty, energy and mineral resources, industrial base, and ability to project power over certain geographical regions—illustrates current circumstances. Whether it be in ammunition, shipbuilding, or weaponry, it is now reasonable to worry that the United States does not have the material capacity to fight a large-scale industrial war.

…and the Danger to American Democracy

But perhaps most damning of all—even more than wrecking the industrial basis necessary for the United States to remain a pre-eminent geostrategic and economic actor in international affairs—is what the failure of the neoliberal agenda has meant for the U.S. political system itself.

When first established in the United States, corporations were oriented toward encouraging national development and pursuing economic achievements that no individual or family firm could do alone. Consider, for example, that Alexander Hamilton, the first U.S. treasury secretary and the father of U.S. finance and industry, helped co-found the Society for Establishing Useful Manufactures in 1791. This early corporation aimed to promote industrial development along the Passaic River in New Jersey, resulting in regional industrialization for over 150 years.

However, this model ran into problems from the 1880s through the 1930s. Corporations, simply put, were spectacularly successful—too successful, even. Such was their financial and industrial power—and their consequent political power—that they began to supersede or even capture the power of the state. The resulting situation, with a handful of individuals wielding disproportionate influence over the levers of government and public policy, was antithetical to republican governance.

Elected politicians of the time period were keenly aware of this in their efforts to restrain corporate power. Senator John Sherman, the statesman behind the eponymous 1890 Sherman Anti-Trust Act, declared, “if we would not submit to an emperor, we should not submit to an autocrat of trade.” Senator Joseph O’Mahoney stated in 1934 that “many of the modern corporations engaged in interstate commerce are greater and more powerful than most of our sovereign states.” President Franklin D. Roosevelt’s attorney general, Francis Biddle, declared in 1944 that “When the industrial life of a country passes into the hands of a few individuals, their power over the direction of public affairs exceeds the power confided by the people to their elected representatives in the government itself.”

It is with great trepidation then that we hear contemporary elected officials talk about multinational corporations in the current political environment. Senator John Kennedy in 2019 declared that Google and Facebook “aren’t just companies. They’re countries.” Large commodity traders can determine the fate of entire nations through their control of energy and food. A number of banks and financial institutions are so powerful that they are, as the term goes, “too big to fail.”

It is through this lens, then, that the ongoing political debate of U.S. economic policy and the mission of American Compass, Oren Cass, and his various allies and followers must be understood: at stake is not only the future of U.S. geoeconomic (and thus, geopolitical) power, the livelihood of its citizens, and the fate of the current international order, but also, implicitly, the fate of the United States as a sovereign republic.

Can America Save Itself?

The challenge that Oren Cass and his colleagues have undertaken is thus great but not insurmountable. If anything, several recent political trends are in their favor.

Abroad, the war in Ukraine put the reality of America’s poor military-industrial situation in stark relief, triggering something of a political awakening. Leading Washington think tanks, from the Center for Strategic and International Studies to the Center for New American Security, have published reports and studies of varying quality proclaiming the newfound need for industrial policy. Elbridge Colby—a former deputy assistant secretary of defense who led the development of the 2018 National Defense Strategy (and is widely considered to be a future secretary of defense)—has been warning that a war with China could be lost if the U.S. industrial base isn’t up to par. For a high-level official (who notably was also special assistant to the president for the defense industrial base in 2017–2018) to issue such warnings is quite telling, especially given consistent signs that he’s correct. Overall, Washington officialdom—and consequentially, policymakers—have suddenly discovered that the industrial base really matters.

Domestically, political progressives focused on economic policy are also beating the same drum as Cass and his followers. This neo-Brandeis movement, focused on reviving 1930s-style antitrust enforcement, has gradually gained power and scored victories. It is telling, as leading antitrust policy wonk Matthew Stoller notes, that the Wall Street Journal editorial page has written 64 attacks on Federal Trade Commission chair Lina Khan in less than two years. Stoller’s own organization, the American Economic Liberties Project, something of a left-wing counterpart to Cass’ American Compass, has also been making great strides in influencing Congress, the Biden administration, and Washington officialdom and policy thinkers more broadly. For once, reforming America’s economic model appears to be a genuine bipartisan cause.

Time will tell how Cass, American Compass, and its ideological allies fare in the coming years. The success of last Wednesday’s forum paints a rosy picture. There remains, however, a few major concerns with Cass’ agenda that this humble observer cannot shake off: a broader reform of American capitalism and its current economic incentive structure will mean addressing thorny political issues.

Consider some practical national security concerns in the world of technology. Google, Amazon, Microsoft, Facebook, and Apple may be hulking giants with more power than some countries, which needs to be restrained. But it is precisely their size and scale that allows them to render services—such as cybersecurity for the ordinary user/consumer—that otherwise wouldn’t be possible. Would a thousand small companies, rather than a handful of large ones, be able to mount a comparable cybersecurity defense effort against foreign adversaries? Would Americans’ personal data really be safer if it were shared with smaller companies, as some argue, if foreign actors could acquire those smaller companies? It is doubtful. Like telecom companies, Big Tech firms may be natural monopolies, requiring political compromise and extremely detailed regulation.

Likewise, consider what the re-orientation of economic incentives in the U.S. economy might look like in practice. The push for globalization and the off-shoring of American industry and jobs, for instance, was driven by the argument that everyone would benefit from lower costs. Yes, jobs are lost, but consumer ultimately benefits from cheap food, consumer goods, cheap labor, and so on. Cass and cohort would propound, correctly, that this trade was certainly not worth it if it came at the cost of American livelihoods and the country’s industrial base (with its strategic value)—to say nothing of American democracy itself.

That is certainly true, but consider what reversing some of this would look like in practice. Suppose, for example, that fair trade laws were to be reintroduced, as Mattew Stoller argues. This would certainly go a long way in checking the power of large retailers and “empowering Main Street over Wall Street,” as it were. But it would also mean an increase in prices for the ordinary consumer, who might very well revolt at the ballot box.

This, perhaps, is the real question that American Compass, and Americans more broadly, must wrestle with: are U.S. voters ready and willing to accept that a higher cost of living and some economic pain in the short and medium term, if not longer, is the literal price for the preservation of U.S. democracy?

It is hard to say now, for this thesis has yet to be tested. Pessimists would contend, not unfairly, that the prospect is dubious. But given Americans’ historical tendency toward grit, endurance, and hope for a better tomorrow, the answer may yet surprise us all.