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Oct. 23, 2024 - Truth Podcast - Vivek Ramaswamy
57:29
FDR’s New Deal: Good or Bad?
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So, one of the more, let's just say, controversial areas of my new book was actually not a lot of the wisdom that I asked of the left, but actually some of the controversial areas of my new book was actually not a lot of the wisdom that I asked of the left, but actually some The fact that there is not one necessarily clear America First movement, but there are many strands of it.
And particularly one of the breaking points that's fascinated me is the distinction between the libertarian-leaning wing of the America First movement, what I call the national libertarians, and the national protectionists.
Both of us reject the historical neoliberal orthodoxies, but on slightly different grounds, right?
The old neoliberal orthodoxy on trade was that somehow we were going to spread democracy through capitalism and capitalism through democracy to places like China, that somehow if we traded with them, they would behave like us.
And what happened in the process is instead we increased our economic dependence on China, which has become our chief adversary, even as our own US military depends on them.
The old neoliberal school of thought had nothing to say about this.
We reject that type of blithe neoliberalism.
But what exactly is the response?
The national protectionist response is to say that we need to onshore everything in the United States and cease our trade relationships in general, China or otherwise, the free trade model is over.
Whereas the national libertarian view is a little bit different than that.
It says that it's senseless for us to depend on China for our modern way of life.
But at the same time, if we're really serious about that, that's going to require expanding our relationships with other countries like South Korea, Japan, India, the Philippines, and so on.
But if we're serious about that, that doesn't quite have the protectionist impact on the prices that American manufacturers are able to command if they're not shielded from the effects of foreign price competition.
That's a fork in the road.
Same thing with respect to the question on immigration.
The old neoliberal view was that the U.S. is just an economic zone, and the more the better, as long as it Increases the size of the so-called economic pie without regard for the effect that has on our national identity.
So the national libertarian, and here's the national and national libertarian, says that, no, the United States is not just an economic zone.
zone, we're a nation bound by a shared set of values, and that we need an immigration system that selects for more than just economic contributions, but civic contributions and ability to assimilate and speak the language of English and pledge allegiance, exclusive allegiance to the values of the United States of America, eliminating dual exclusive allegiance to the values of the United States of America, eliminating dual citizenship That's what that system would look like.
Which is different still yet from the national protectionist view, which says that actually immigration policy is not just economic policy, it is particularly labor policy.
And the job is to protect American-born workers from the effects of foreign price erosion when it comes to the labor market.
A slightly different view than if your top priority is actually focusing on civic integration and reviving our national identity.
And the biggest distinction of all, of course, is in our respective attitudes towards the regulatory state.
I lay this out in a more detailed way in my book, Truths.
Again, most of these are speaking hard truths to the left, but these are some hard truths for us to confront on the right, is the question of how we wish to use the regulatory state to advance our own pro-worker, pro-American, and you could call them conservative ends.
Do we want to replace the left-wing regulatory state with one that advances affirmatively conservative goals?
Or do we actually want to just get in there and dismantle that regulatory state?
You could say this about the regulatory state.
You could talk about it more broadly with respect to the nanny state, which I consider to be the superset of the regulatory state.
It includes the three-letter agencies, the administrative state, but it also includes the entitlement state, the foreign policy nanny state.
Are we actually serious about getting in there and dismantling it?
Or is the purpose instead a newfound purpose to redirect that nanny state or that regulatory state to advance some alternative vision for the good?
Not the left's vision, but a conservative or pro-American vision.
One that would empower the CFPB, the Consumer Financial Protection Bureau, to cap credit card interest rates.
That's a kind of price control that some Republicans are okay with, even as we rail against Kamala Harris's grocery price controls.
Or is the right answer to say that we don't want the CFPB meddling in the private sector, and by the way, telling small businesses as they do, that they've got to report their race and gender data to the government.
My own view on this, and I've been pretty open about this, is I think it's a little bit, not only hypocritical, it's contradictory.
And self-defeating for us to, on one hand, slap the CFPB on the wrist and say, we don't want you going woke and asking small businesses for their race and gender demographic data, which I think is disgusting and they shouldn't be doing, while at the same time saying we want to empower that same agency that Elizabeth Warren led, but now with a different mandate to cap credit card interest rates.
I don't think that we can have our cake and eat it too.
And in some ways, not only are we paving the way for the same shoe to fit the other foot when the left's in power, but we're also in some ways creating the very problem that supposedly we sought to solve.
And these are unresolved questions in the conservative movement, not exactly the stuff of cable news television discussions at night in the lead up to an election.
We are a couple of weeks away, and that's the most important thing for the future of the country, politically speaking right now.
But on the other side of the election, I do think a lot of these questions are going to percolate to the surface.
And I think the America First movement and the Republican Party and the conservative movement and the United States of America are all going to be stronger.
If we're able to have those discussions in a thoughtful, nuanced and And unafraid manner.
And to that end, it's why I've invited on today's podcast a guy who I've really grown intellectually respect over the years, become a kind of intellectual friend that we've actually never met in person.
It's only ever been in remote contexts like this one, though we intend to change that.
A leading thinker on the new right and the leading thinker behind even some of the premises undergirding the America First movement.
My friend Sarabh Amari.
And Sarabh, I'm excited to have you on.
And I know you've been paying attention to some of these conversations that both you and I have been having in recent years.
And I'd love to pick up where I left off and to hear your thoughts on first, how you would define the new right and what brought you to your own set of convictions.
And then we could talk about this distinction between what I think of as the national libertarian strain versus the national protectionist strain of America First.
And map out what each might mean for the future of our movement.
It is very good to join you, Vivek.
And like you said, we've always done these conversations remotely, so I look forward to doing them in person once and soon.
Look, the term the new right Is so sort of over-determined and laden with multiple factions' interpretation of it that I really don't know.
And by the way, the New Right today is the successor to other versions of the New Right, other movements that called themselves the New Right in decades past.
It's all a bit complicated, but I'll lay out my own trajectory and maybe that will shed some light on it.
So I began my journalistic career and my ideological sort of maturity on the Wall Street Journal editorial page.
I spent five years there preaching the gospel of Lower marginal tax rates, free trade, and an assertive American foreign policy in every corner of the globe.
And around 2015-16, I and my colleagues watched with horror as this guy, this former New York City real estate developer turned reality TV star.
This guy.
Absolutely.
Started, you know, saying things that completely defied all of our orthodoxies.
In my case, I was based in London at the time.
So I felt like I had been sent to, you know, fight this war for this set of ideas in foreign lands.
And then back home, the party, the Republican Party, was betraying them by embracing Donald Trump.
You know, he said...
I'm not going to touch your entitlements.
I'm going to protect your entitlements.
And the crowds roared.
The base of the Republican Party roared.
He questioned the Iraq war and said it was a disaster.
And the crowds roared.
He even hinted at a public option in healthcare in a famous exchange with Ted Cruz where he said, I'm not going to let people die on the streets.
To which Senator Cruz replied, well, that means you're a socialist.
Are you a socialist?
And he just said, I'm not going to let people die on the streets.
And again, the crowds roared.
And it was very disorienting, you know, because this was not the conservatism that I had made my own and promoted for a few years.
But then I tried to sort of get into the mindset, like a lot of people in the mainstream media, both the center left and center right media, there were a couple of months right after the President Trump's first election, where in 2016, where the media was like, well, what is happening with the working class?
Why are these people so, you know, why are they such malcontents?
And a lot of reporters and writers just moved on.
You know, by February, March 2017, it was full on waging kind of lawfare and backing the lawfare and attempting to undo the outcome of the 2016 election.
But I didn't move on.
I tried to think about what it is that where, for me, I had come as an immigrant to this country when I was 13, 14 years old.
We started out, you know, kind of very, very poor when we first moved here.
But within a decade, I was writing editorials for the Wall Street Journal and not even based in London.
But for lots of like my fellow citizens, that had not been the story.
It had been a story of Of dispossession of the loss of stable union, good paying union jobs, the loss of stable moral coordinates, the fact that working class has become synonymous with out of wedlock births and fentanyl addiction and opioid addiction.
And various other sort of dysfunctions and social pathologies.
So I stayed on that.
You know, sort of parentheses there.
I also became Catholic in those years.
And Catholicism, as you know, has this much more comprehensive account of what the state is for and how to organize.
And what was your religion?
What was your faith before that?
Basically nothing.
Everyone thinks because I was born and raised in Iran, people assume I was Muslim.
But I came from a very typical religion.
Super secular Iranian family.
Even when we were living in the Islamic Republic, my parents drank alcohol and watched foreign movies and read Western books and ideas.
So I wasn't pointing to Allah and then turning to Catholicism.
I came from nothing.
And it was a long process of reading and thinking and going to Mass and so on.
But Catholicism has this account, which it draws from the classical tradition, from Aristotle, of what the state is for.
Why do we form political communities?
And it is not to maximize individual liberty, but rather to secure the common good of the whole.
So the combination of the Trump phenomenon and then my own kind of faith journey and intellectual journey led me to a kind of conservatism where, fast forward now what has been seven, eight years, Unlike you, I think that the administrative state has troubling aspects.
There are things that need to be reformed.
It's certainly not beyond reform, but it is necessary, given the complexity of the economy and the power disparities it generates between workers and consumers on one side and producers on the other.
I take a favorable view of labor unions.
That doesn't mean that I'm happy with the fact that the American labor movement is so beholden to the Democratic Party and so into its kind of cultural agendas.
That's something that I've sought to change.
But I also understand why, given the history of the Republican Party, the labor movement finds itself the way it does.
I think that's something that can be changed.
And folks like Obviously, J.D. Vance and Josh Hawley and Senator Marco Rubio are trying to change that dynamic.
In some ways, you could describe me as a sort of...
European-style Christian Democrat, which is a tradition we really don't have in the United States.
But when it comes to the economy, that's a good way to describe it.
I'm also an adherent of the wisdom of the New Deal order, the New Deal order being that period roughly between 1945 and 1975 when the United States obviously had actually a very dynamic economy, contrary to some of the A sort of history that was told afterward, a productive economy, a manufacturing-based economy, where in short, and I'll wrap up very quickly, that's when you had what's called the Great Compression, where you had this sort of relatively mild redistribution.
Mainly through good wages and industrial jobs.
A middle class was created where your grandparents were able to, for the first time, take real vacations, enjoy disposable incomes, and access healthcare and so on and so forth.
So that doesn't mean we have to recreate every element of the New Deal order.
The macroeconomic conditions have changed.
I recognize that.
But the simple premise That an economy that works for working people should be the lodestar of a conservative movement, that this is actually a conservative goal, because just giving in to the market's wild kind of capacities to disrupt and sort of demolish certainties Is not necessarily a conservative view and hasn't been, certainly in continental Europe, has not been what is thought of as on the right.
But lots of people in the American tradition who were on the right came to accept this.
Dwight Eisenhower, President Nixon, who I think is actually a great underrated president, but we don't need to go into that.
But the bottom line is that that journey that I described led me to this place where I often find myself at odds with the libertarian wing of the right, even as people describe me as a sort of populist intellectual.
Well, look, one of the reasons I was looking forward to this conversation with you is that you're, perhaps because you're not in partisan politics or electoral politics, able to actually explain what your views are, rather than having to shoehorn them into what is palatable while also trying to have an ideology you're trying to backdoor in.
And I say that because at least you're open about a few things you just said, which I respect immensely, that You do think that some level of the continued existence of the administrative state is necessary, that you do respect the New Deal order.
These are things that I think many Republicans in elected office or pursuing elected office who share some of your convictions would find that difficult to say because of the position they're in.
But they act on it.
They don't act on the state or whatever.
Yeah, yeah.
Well, yeah, I mean, I think we...
That's actually my great frustration is people would say that they want to dismantle the administrative state, but don't.
But I'm actually saying something quite different is even on the new right political coalition, I think you're able to be far more...
Lucid in your statement of what actually it entails rather than effectively representing the vibe of that new right, but then walking it back because that's what the Overton window of the current Republican Party dynamic allows for.
And I think so.
Forget whether or not this is even conservative ideas or not.
I think you can make the case of whether these ideas have been on the right or on the left.
But let's just talk about the content of the ideas themselves.
Let's start with the topic of tariffs, okay?
So that's obviously been a big subject heading into this election.
There's actually not that for all of a big subject it's been where the left is trying to hit Trump on it.
The reason they can't is Biden actually kept all of the Trump tariffs that Trump put in place anyway.
So it's not a particularly distinguishing issue in this election.
But I think it will be an important issue for economic policy going forward.
I view the tariff discussion as falling into three separate possibilities of what your view of the future could be, right?
One possibility as you go to the libertarian fantasy land that the United States should operate as though we live in a global free market, even under conditions where other countries are not actually playing by those same set of rules.
So I had an exchange actually just the other day on a campus I visited with a Hayek adhering libertarian.
I like Hayek too, but he self-described adhering of Hayek, who said that he was his words, not mine.
I said, what do you think if the other countries on the other side of these trades are engaging in state subsidies when we're not?
Are engaging in indirect tariffs while we're not applying the same level of tariffs to them or even direct tariffs to us that we're not applying to them?
What do you think the right approach is to the United States?
I don't call that free trade.
And his word was, you know what?
I'm going to be honest with you.
I think we should still turn the other cheek because it's still value maximizing.
So it was sort of the turn the other cheek version of approach to tariffs.
That's what the classical older variety of what somebody thinks of themselves as a libertarian purist might say.
I reject that.
There's a second category, which is the one that I find myself drawn to from a policy perspective, is the idea that we really weren't really ever operating in a true global free market anyway, because the other trading partners we're trading with are playing by a different set of rules than we are with respect to state subsidies, with respect to tariffs they apply to us.
And so it's perfectly fair game for us to say that if you're going to do that and trade with us, it's not capitalism If one side is mercantilist on that trade, that's not real capitalism.
We have to play by the same set of rules.
So we'll apply the same tariffs, direct or indirect, that you apply to us, that we apply to you.
But the best solution for all might be to get rid of them altogether.
But so long as you're not doing it, we're not going to turn the other cheek.
We're not going to have our heads stuck in the sand.
We're going to demand that you play by the same set of rules and hold you accountable.
And that's really what I saw out of a lot of Donald Trump in that first term, which I respect and I'm on board with.
That's still quite different, and to smoke out this difference, from the idea that let's suppose we did have the other countries and our trading partners playing by the same set of rules.
What you might have is lower incremental labor costs in the trading partner country in India or China or whatever.
And China's complicated because they're an adversary now.
But suppose it wasn't even the CCP in charge, right?
And it was just a trading partner, but that was democratic for all intents and purposes, like an India situation, or you could take the Philippines or Vietnam or whatever else.
Even under those conditions, the true protectionist view is that even if the other side is playing by the same set of rules, rules, we want to apply a different set of rules ourselves to advantage American workers and American manufacturers who aren't forced to compete under the economic conditions set effectively by the sum total of our trading partners, which is a coherent view, but it's different than the category two, my view that I laid out.
And as I understand you and many others who would classify themselves in the new right, you're probably in category three I'm in category two.
We both reject category one, Blythe neoliberal libertarianism, because, you know, for the reasons I just laid out, but on slightly different grounds.
And yet we haven't really had that distinction between Category 2 and Category 3. And President Trump is unique as a leader in building a coalition that includes both of those strains in the same movement that we call America First.
So I want to give you a chance to react to that and parse what you see as the distinctions between those views and maybe make the argument for your side.
Yeah, to be honest, I think that I'm somewhere between two and three, and you'd be surprised the extent to which I'm not full three.
But here's what I'll say for starters, is that for most of its history, for most of its history, the United States has been a protectionist country, specifically concerned about import substitution, and especially concerned with import substitution in manufacturing.
Alexander Hamilton founded something that's called the Society for Useful Manufacturers.
Of course, it was about promoting domestic manufacturing.
And this regime that he created, the Hamiltonian system, It wasn't just about tariffs.
There were other elements to it as well, but tariffs were a very important dimension of it.
It was obviously, as you know, historically, always the agricultural South, which didn't have a manufacturing capacity that opposed historically opposed the tariff regime.
And those are the fights between, you know, throughout the 19th century between between pro and anti tariff Americans.
But it's important to note that the immense industrial capacity that the United States had states had built up had been built up in the context of tariffs being the norm.
But I think we I you know, so so and so insofar as that's the case today, I think we are whether or not we like it or not.
I think much of the West is moving away from number one.
Not just the United States under both presidents Biden and Trump, but even a lot of our European partners are looking at a Sort of smaller globe, and they're thinking, they're more and more going back to thinking of the globe as blocks, B-L-O-C blocks, right?
Because of the experience of the pandemic when we suddenly realized that, oh, shoot, we can't manufacture our own masks.
We can't We still, even to this day, some of the most basic components that go into our medicines are still manufactured in China.
We can't manufacture personal protective equipment.
What happened to our manufacturing capacity?
So there's that kind of strategic fear that states have, all states have, and which, you know...
Led to a condition in which the Biden administration, as you noted, kept in place President Trump's tariffs and indeed expanded them in the case of electric vehicles and electric vehicle components.
So I think that's the general trend that we're moving toward.
The question is, okay, where do we hash out the details?
And the thing to remember is what are tariffs for?
Are aimed at promoting certain domestic industries.
It's basically saying, what do we want to produce in this country?
What products do we not want to give up the production of in this country?
Whether that's for strategic reasons, whether it's because, and I believe this, that manufacturing is associated with just a different kind of job, right?
Gigified, precarious service jobs don't have the same stability and dignity and actually, frankly, higher wages that are associated with manufacturing jobs.
So that's part of it.
There's a pro-labor component to it.
There's a national security component to it.
And there's just industrial know-how, right?
What we learn as we're trying to, for example, arm Israel and Ukraine is that, you know, even as Congress is Throwing more and more money.
Whether you agree with those policies or not, I don't want to get into the substance of it.
But even as Congress is throwing money into the Pentagon to build more shells and stuff, it takes time to ramp that up.
Why?
Because for two decades, we neglected our industrial base.
And we have workers whose skills have atrophied, who've lost the game in terms of workforce development.
So...
These are the goals that you want to address with tariffs.
And if you have that in mind, then you can be strategic about it.
You can say, okay, well, on some areas, yeah, we still want to be able to take advantage of comparative advantage, especially when there's, as you say, a real fair trade policy.
You have a fair play going on and not one side playing a mercantilist game while we're pretending like we live in Milton Friedman's utopia.
Fine, we can have that.
As long as, for example, those third countries that we consider allies don't become platforms for Chinese investments that are aimed at doing the same thing they were doing before, which is undermining our industrial base.
Fine, we can have that discussion.
Can you define industrial base?
Because that word gets bandied around a lot.
And sometimes I think we're maybe non-specific about what it actually means.
It's plants and the entire kind of apparatus that goes around for a plant to be able to produce whatever it is, what X industrial good you care about.
It involves infrastructure, roads, supply chains, all those things that make it possible for raw materials, et cetera, et cetera, to go into the plant and for the product to come out.
It's not just the plant itself.
It goes with a wider sort of ecosystem.
Maybe think about it as an industrial ecosystem.
And that's been eroded.
And its erosion is apparent in, you know, figures like the fact that today, depending on whom you ask, manufacturing makes up 8% to 11% of American gross domestic product.
For Germany, it's 24%.
The OECD average, the organization, economic, whatever, the OECD average is 18%.
So the goal here is to...
And what was it in the United States in like 1990?
I believe it was closer to the average.
I'm almost certain it was closer to the 18% average.
I'm sure it was further back in time.
I'm actually like much more interested in like the 1990s.
The turn in 1990s.
Probably the most damaging effects came with NAFTA in 1994, I believe.
And then the entry of China into the World Trade Organization in 1999-2000.
Those are when you'll see the drop-offs.
And by the way, if you take a map of the counties in the United States that today are the most...
Sort of exposed to fentanyl and the sort of various kind of opioid pathologies that we associate with the Rust Belt.
And if you overlay a map of counties that were most exposed to the China trade shock, it would be uncanny how much overlap there is between those two maps.
So manufacturing, it creates a certain kind of community.
The local industrialist has a different relationship with his community Frankly, than leaders in distant Wall Street or Silicon Valley.
They're the ones who...
That's a claim.
That's an assertion.
I think it's probably true.
Manufacturing bosses were the ones who would sponsor the local theater, the local library, the local arts group.
It's a whole...
Way of life that goes with the production of tangible goods that you just don't get in other modes of production.
I want us to lead in finance.
I want us to lead in high tech.
But I just don't want us to lose manufacturing, either because it's just a source of...
National strength of good, stable jobs, etc., etc.
But just to go back to your question, basically, I'm kind of a 2.5.
Libertarian, one.
Vivek, two.
National Libertarian, two.
And then full-on hard autarchy.
Of course, that doesn't sound right to me.
I'm somewhere between two and three.
I think the key is in the coming years to just...
You know, carve out a smaller block, BLOC block, right?
Where that includes...
We have to think about whether the allies we're dealing with are...
Whether they're democratic, whether they really have free market societies, as you said, because if we have a free market society and they're, you know, pumping, you know, billions and billions in subsidies, that's a problem.
That's not a free market.
I'm sorry.
Whether or not we are prepared to combat it if they allow their territories to be used essentially as Chinese platforms.
See, I think so much of what happens with our discussions on the right, and it'll happen in this case of this discussion on tariffs, I see a similar dynamic on immigration, which I'll tell you about in a second, is that we use our shared vehemence of opposition to the yesterday view.
either neoliberalism or even liberalism outright, To avoid a little bit of the discomfort of crossing the terrain that you and I are crossing here of actually parsing out where we land and the actual substance of our policy.
So we both agree that that, like, blithe neoliberal vision of somehow believing that if another country were playing according to state-sponsored subsidies and applied high tariffs to U.S. goods, that somehow we're engaging in free trade if we apply no tariffs back to them and aren't subsidizing our same industries.
That's not.
And we reject that.
But I think that the vehemence of our agreement there I think risks confounding, I think a slightly different worldview that you and I have with respect to conviction in an actual fair market, which is not what we have right now, an actual free and fair market, for what that would do for American manufacturers and workers versus this,
what I take to be, and I say this to be, you know, overstate the case of confrontation here, but to be able to elicit a response to get your view on the table, overstate the case for some sort of narrative of like an idyllic If I may say, hand wavy account of, yeah, we had this era of some industrialist and because he's making things there, the local theater is also better off.
I mean, those are just not the kinds of claims that are sufficiently reliable around which we can actually build a sustainable, credible economic policy.
Also, the question of how much.
I mean, right now, if we open the door to say, okay, well, Yes, we want to play by a level playing field.
I can tell you what a level playing field looks like, is that the other countries play by the same set of rules that we actually do.
Climate regulations aren't disproportionately applied to the U.S. versus another country.
Tariffs aren't applied disproportionately to the U.S. manufacturers versus other countries' manufacturers.
They don't get to subsidize an industry when we don't.
Level that playing field.
I can tell you what that looks like.
But then we need to go further and have some type of more muscular state sponsorship and or regulatory and or New Deal vestige apparatus.
I think demands an answer of at least how much and how do you know which is the right amount of that?
And how do you know whether you're going to get the result of the local libraries and theaters being sponsored just because some guy happens to make something in a particular location?
Like, what if that doesn't follow and you're left with a guy who's coming out of Silicon Valley or a financial industry that's actually sponsoring the theater in Cincinnati, Ohio instead?
I just want to understand.
With greater specificity, how you translate your desired end with the policies that you would propose to actually get there.
I'm not contesting the end.
I'm contesting whether or not we have the specificity of actually having kind of policies that restore that more idealized vision you've laid out.
First of all, on the point about manufacturing employers being anchors historically of their community, that's not the primary benefit.
I mentioned that as a side thing.
It's not like I'm saying now there's going to be a...
Well-funded public theater group in every town.
I mean, that's...
However, it is true.
We can go to towns where historically there were, you know, manufacturing employers and they were associated with a kind of philanthropy and a kind of culture.
It wasn't just that sort of, that was the factory.
It was the associated union hall, which was a place not just of, well, that's where we go to like lay out collective bargaining, but also it was A place of community and solidarity, et cetera, et cetera.
That's all been decimated.
And there are towns I can tell you to go to, like Steubenville, Ohio, where you see what it looks like when that's been lost.
And we agree that that's not an end state that we want.
Of course.
Maybe we're talking about competing visions of how to actually...
The local libraries thing was not my main contention.
Fair enough.
Illustrative, though.
And then, you know, on the other point, I mean, look, I think For starters, the tariffs that we've put in place under the Trump administration and maintained under the Biden administration, because we're talking about protection here, right?
I would maintain those.
And I'm worried about the fact that Kamala Harris, I think, comes closer from the neoliberal wing of the Democrats than the kind of wing of the party that Biden Whether it's Biden himself or whoever was around him calling the shots, prioritize.
And I always joke, I would have an easier time.
I would do a better job laying out what Bidenism got right than Kamala herself.
She's saying tariffs are a tax on consumers.
It's terrible.
She doesn't know what she's saying.
Do you know your own administration imposes tariffs?
Yeah, I mean, the existence of Kamala Harris, I think, is a great risk for us, not because I think we're going to lose electorally.
We'll find out if I'm wrong about that, but I don't think so.
But because it actually, like the level of intellectual clarity about her own party or supposed movement's goals is It's so obfuscated that it actually sets such a low standard of what we can expect for ourselves and stops us from having intelligent debates on the right because we just end up falling into the trap of dunking on Kamala Harris, which is just too easy to do.
But let's just take this question on what accounted for that loss of the industrial base.
Because part of it, I would put at the feet of the idea that the US was held at different regulatory standards than other countries, and the US was over-regulated in the first place that caused many of those manufacturers to go to conditions where they could either be in less regulated or more You know, more business friendly environments,
not just as it related to labor costs, but even as it relates to things like emission standards, if you're tracking that in the United States, but not in another country, that's actually part of the reason, among other regulatory factors, too, that account for the industrialization as they move to countries that were closer to the Wild West of what the United States used to be during the time that we had, the first time we had a frontier, and the first time we had an industrial revolution, when those were not constraints on US businesses.
And so I guess part of my objection then to the vision of believing in muscular state intervention, and even in part backstop by some level of a regulatory state to create that optimistic vision of re-industrializing America, is that that was the very source for the de-industrialization in the first place.
And we can't possibly trust that bureaucracy to somehow Magically willing to existence an alternative vision when, in fact, that was at least among the causes for deindustrialization in the first place.
So what would be your response to that national libertarian claim from your vision for what you think is the right kind of industrial policy we need in this country?
Well, I mean, we've...
Tariffs aren't necessarily industrial policy.
They can go hand in hand.
So we've see into industrial policy and maybe the existence of the regulatory state as such.
I welcome that.
But let's just be clear about that.
It's an adjacent topic to the tariff topic.
There's a guy, his book is off the frame here, but his name is David Harvey.
And he also agrees that there was too much sclerosis, regulatory sclerosis, and even he would say that American unions were too inflexible during that key period of the 1970s when the real transformations began to happen.
David Harvey happens to be a Marxist, but I think he's like an eminent Marxist.
But just to your point that, you know, if you take my view, you don't have to say I'm going to defend every element of the regulatory state.
So here's what I would say.
But complex economies always go hand in hand with complex administration.
This is unavoidable, right?
Because complex entities like nation and indeed globe-spanning corporations have such complex operations and their interests and the interests of the wider national community are so intertwined that you cannot but have an administrative state.
The question is, you know, what we do with that administrative state and is it sufficiently responsive to the political demands?
So here's my general stance on the administrative state.
On the one hand, when people say, I want to collapse the administrative state, I want to destroy the administrative state, the first thing I'll say is like, okay, well, you take the first flight after the FAA has been abolished, because I would be hesitant to do that.
Or you eat the first can of can, you know, can of sausages after we've been liberated from under the tyrannical yoke of the Food and Drug Administration.
I'm not going to do that because it's going to be scary.
And there was like a reason why all this sort of apparatus was built up in the late 90s.
But what about the 50th?
What about the 50th can or the 50th flight?
You know, that might be...
That's a different story.
Well, no.
What you're saying is basically some people will crash and die and then we will make different choices about which...
But people are crashing and dying already anyway, is part of my point.
Is there a transition cost to a new equilibrium?
They'd be dishonest to say that there couldn't be.
But the question is, are we going to be in a better place where that's actually governed through other forces Right.
Right.
If you believe it's better, then it's a question of what transition cost.
We went through this in the 19th century, in the late 19th century and 20th century, and the nation decided in a pretty decisive way, beginning under, in some cases, under Republican administrations.
For example, Hoover had elements of the New Deal, certainly Wilson, and then, of course, the New Deal.
That became so embedded as a necessity for dealing with modern capitalism that it's never going to happen.
To me, debating the administrative state is like debating the weather.
I don't like that it's rainy today, but the fact that I gripe about it doesn't mean it's going to go away.
However, there are things we can do.
Just to Build agreement rather than sharpen disagreements.
I do agree and I think you would agree that one initial step that everyone on the right and even maybe some people on the left agree with is that we want greater political control over the administrative state.
So I'll give you a funny example.
I was on a An interview with PBS about J.D. Vance.
My segment didn't air, but they asked me, we've heard J.D. Vance...
You're too smart.
I don't know.
We've heard J.D. Vance say that he wants the president to have control and sort of...
Over the administrative side?
I'm like, well, you understand the administrative is an extension of the executive branch.
Of course we want that.
And it's...
You would agree on this.
It's a bad thing that the chief executive cannot exert his will over the bureaucrats.
And I think we should change that.
If he wants to be able to fire them, I'm all for that now.
I think, like, talk of mass firing of bureaucrats or, like, de-authification is...
Crazy and it's not going to happen and it would result in a lot of bad things.
But the point is, I'm willing to say, let's adjust the administrative state.
You're right.
If we want to have industrial policy, some of the environmentalism has to give.
I'm open to that because I'm not a green alarmist.
And that's one of the shortcomings of the Inflation Reduction Act.
This is the Biden industrial policy in a way.
So much of the investment is going toward green kind of investments rather than other things.
So anyway, I think that's the bottom line.
And here, your listeners should know that I'm sort of definitely the outlier here because even the most...
Sort of more of a protectionist America first, as you mentioned, are fairly hostile to the administrative state.
Because of my job, I'm not a politician.
I'm not an office seeker.
I'm just a writer, you know, whatever.
I could just say, like, I just don't think dismantling the administrative state is ever going to happen.
So, like, ever.
Yeah, so I think the question of, I hear this argument a lot about, is it going to happen?
And the American people decided, they decided in like 19...
I mean, starting with Woodrow Wilson and Coleman further extending through FDR and then further even through LBJ in some ways through Richard Nixon.
That doesn't mean that those decisions of the past were the right decisions then.
That doesn't mean that even if they were partially the right decisions then that they're necessarily the right decisions now.
And just because those decisions have been made in the past, we've radically reordered a lot of things in this country that were unimaginable back then, or what they did back then was unimaginable 100 years before.
So this idea that it is or isn't going to happen, I think, is, for me, less interesting than the question of whether it should happen.
The fundamental reason this came about is because modern capitalism is not the kind of agrarian Arcadia that is described in most Econ 101 textbooks that Econ 101 students Read in college.
I don't know if they read textbooks in college anymore, but there used to be kids, something called textbooks that you read and got information from.
And in Econ 101, the picture that is painted, it's a kind of neoclassical tradition, whatever you want to call it, it has different names, libertarian, etc., is basically that, you know, every market Is intensely competitive.
There are numerous sellers and buyers on every side.
And the fact that there's this much competition means that you can always find a better deal elsewhere.
Therefore, markets, all else being equal, markets are generally non-coercive.
Now, there was a period in the development of capitalism when this was true.
Like I said, in the late 18th century, there was this period of called the masterless men, artisans, yeoman farmers, etc., who would deal with each other at arm's length.
And really, that picture that I just described really described the reality.
But ever since the Industrial Revolution, most sectors are dominated by a handful of large players.
The name that the economist Joan Robinson coined for this is oligopoly.
It's not monopoly.
Even free marketeers agree that monopoly should be curbed.
It's oligopoly.
It's just two or three players.
So that by the late 19th century...
Otis Elevator controlled 90% of its market.
British American Tobacco controlled 70% of its market, etc., etc.
When you're dealing in a situation like that, the economy is coercive because the price is no longer this pristine index of supply and demand, but rather an index of relative bargaining power between consumers and sellers, between employers and employees, and so on.
Can I pause with you?
Because I think you and I are tracking each other well.
Now...
Isn't your claim of this vision a little bit in tension with your view of inhibiting competition in the form of international sellers in those same markets into the United States of America?
So on one hand, if our concern is the concentration of market power, and yet on the other hand, our concern is not enough American manufacturers are doing it, therefore we need to protect from the effects of the competition.
Isn't there a bit of talking out of both sides of the mouth?
I don't aim for going back to a...
I don't think it's possible to go back to that Arcadia of many, many sellers, many, many buyers in every market.
It's just not possible.
It is not rational to have...
Many sectors organize that way anymore.
In the late 19th century, you had this sort of bloodbath of railroads, and as few railroads emerged out of that.
Why?
Because you either have factory effects or network effects, and in both cases, they actually promote bigness.
In factory effects, that just has to do with increasing returns to scale.
It's why, you know, you don't really have like tire manufacturers that are mom and pop shops.
Tire manufacturing has to be on an enormous scale.
Or the network effects are industries that sort of connect people and goods in different ways.
So, for example, a railroad, it doesn't make sense for 100 railroads to connect 200 different towns.
It's much more rational for like two or three lines connecting each about 70 of those towns in some regional formations.
So that's the reality of modern capitalism.
And that's fine.
Like I said, it's rational in many ways.
We don't want intense price competition, all that kind of 19th century capitalism, because it's destabilizing and all the sort of wild cycles and so on that we lived through in the 19th century.
So we realize we're going to have these kind of consolidated, enormous concentrations of power.
However, if we're going to have them, then we should countervail their power by other forces in society.
Labor unions, one, and of course government, administrators, and so on, regional wage boards, civil society, non-profit.
This is the model of mid-century America, which coincided with this period of great, like I said, productivity and dynamism and mass prosperity.
I don't see how in 2024 conditions have changed.
Capitalism in an industrial age will just involve large concentrations.
And we need socially to be able to sort of exert our will over these entities, even as they benefit us.
And I realize that they benefit us.
So that's the theory.
And I just don't think you say, well, just because it was enacted in 1934 doesn't mean that it's...
Well, the basic kind of conditions of industrial capitalism haven't changed.
I drew two possibilities back then.
One is it was the wrong...
Policy at the time and the second is even if there were aspects of which it was right, it's a different economy today.
I think both of those are my beliefs.
I think that the idea that just because you had, obviously the Econ 101 text is not, the people who take that as a description of the way the real world actually works are missing the point.
It was offering an intellectual framework from which to have a discussion.
At least that's what I think it should have been intended to do.
It's a spectrum of whether or not you live in a truly liquid, fully competitive market on both sides of the trade where everybody's a price taker versus some people who are price makers or price setters or exercising market power.
It's a spectrum in between, right?
It's scalar.
It's not a quantum choice of one or the other.
Now, the question of whether or not that state of affairs – And I'm also with you to sort of sharpen our agreement rather than disagreement, that the further you get towards a monopoly state of affairs, the less ideal that is in terms of overall social welfare.
The question, though, is certainly it points along that spectrum short of monopoly, because that's a whole separate discussion.
But as you veer away from the spectrum of a truly liquid...
Infinitely competitive market to a monopoly, but getting somewhere at least into the zone of what you would even call oligopoly.
And what you call oligopoly, is it two?
Is it ten?
You know, what counts as oligopoly?
And does it matter if it's an American-made oligopoly alone or if it consists of some international actors?
If you veer into some territory that's a little bit murky, the question is whether the cost...
What you and I will agree is that's a less than perfect system.
But in a menu of least imperfect options, how do you pick the one that's least imperfect?
Not to say the most perfect, but the least imperfect.
And the question is whether the cost of regulating that Will systematically, at least in principle, if not in practice, exceed the benefit of doing so time and again?
And I think that's the question we've got to ask.
Not wishing into existence some sort of idealized vision of the past, which I do think has a rose-colored vision.
You know, lens through which we've used some sort of past where you were able to have living in harmony through some sort of state-sponsored capitalism that corrected for these failures.
But the question is whether the cost of doing so would actually exceed the benefit of trying to correct for that oligopoly state of affairs as well.
And I think that argument I don't think has yet been fully made or fleshed out in this pro-industrial policy vision for the new right.
I say this in hopes that what I think comes out of a good dialogue like this where we're both maybe on the America first right is that we're able to push each other such that maybe there is a sharper case that can be made in the future.
But one of the things that I see is missing is we can't hold this side of the economic debate to a different set of standards for the rigor that we expect by merely indicting the other side for its failed rigor and actually failing to account for its results.
And so I guess I'll throw the question back to you is, how do you make the case that the cost of creating that regulatory apparatus, the very one that you and I will agree has suffered from a failure of democratic accountability and the existence of that bureaucracy itself is in some ways created to avoid democratic accountability and has done things that you and I would the very one that you and I will agree has suffered from a failure of democratic accountability and the existence of that bureaucracy itself is in some ways created to avoid democratic accountability and has done things that
How do you make or what is even the framework for offering an argument that the cost of doing all of those things and the risks you take, including the social risks in the process, still outweigh the benefit of aiming for an alternative vision of the good?
good.
Yeah, look, again, I have history to point to, which is that It's happened in the past.
The social cost of not having one was an unbelievably chaotic economy.
To give you a specific example, in the early Republic, the Hamiltonian system generated this institution called the Second Bank of the United States.
It was a successor To the first bank of the United States that Hamilton himself founded.
What was the problem with the second bank of the United States?
It was seen as the overwinning regulatory entity.
It could be used by certainly advantage like Northeastern elites and sort of large slavercrats at the expense of At the time, the people who were mad at the institution were urban workers, proletarians, and then you had smaller entrepreneurs and Western and Southern smallholders.
But what was the Second Bank of the United States doing?
Well, it acted as a sort of quasi-central bank.
It disciplined the flow of credit because it was the only institution whose notes could We're nationwide, whereas the others, you know, all other state banks were limited by the state lines.
And it was being used, again, by the elites in some ways, but it also was doing a decent job of disciplining the flow of credit and ensuring a flow of credit in a new republic.
The Jacksonians set out to reform this, but Andrew Jackson knew only one thing, and that was how to wallop and smash.
And he did wallop and smash the Second Bank of the United States.
He won what's called the Bank War.
But the result of it was that Basically, you had a period of intense wildcat banking and therefore inflation.
You had a minor depression.
And for about 80 years, the United States didn't have a central banking system of any kind.
And they had a much more fragmented and sort of messy banking system.
Compared to other industrial states about the same time.
And if you look at the chart of banking crises during that period, the United States just had much more frequent banking crises than comparable industrial states like England and France that have more centralized banking regulation.
And then we got the Federal Reserve System, kind of a taboo entity on the right, but basically it came to fulfill the functions of the Second Bank of the United States, but in a much more centralized and direct way.
However, you know, it didn't have that element of, you know, the Second Bank of the United States, which I didn't mention earlier, which was that it was also a profiteering entity in the money market.
So what was outrageous to a lot of people in the 19th century was that the bank both acted as a sort of quasi-central bank and was a...
Itself a money-making, profiteering entity.
So we got the Federal Reserve.
And we've, you know, we've had the financial crisis we had.
But compared to the 19th century, since then, the frequency of banking crises in the United States is lower, much lower.
So...
That's what I turn to you is like, you know, what's the cause of not regulating?
The market can generate kind of pretty wild outcomes.
And, you know, people who are wealthier can withstand, although not even them all the time.
But lots of ordinary people cannot.
And that's why we have this.
So I just would turn around the question and say, what are the costs of not having some oversight over these kind of behemoth entities and market forces?
Look, I think that where we find a lot of common ground in the framing of the discussion is a menu of options of imperfect systems or imperfect alternatives.
Now, I would say that even this gets into sort of deeper vision of Philosophy of virtue, but if our own needs matched our wants, if we wanted what we needed and really there was not a gap between the two, capitalism would be the perfect system, right?
But the gap between what we need and what we want accounts for that delta is this thing we might call an approximation of virtue and I think that a lot that goes wrong with capitalism in part is explained by the way in which our own innate human wants don't always match our needs.
What we actually manifest or revealed preferences in the market don't always actually represent what we ultimately need for a fuller realization of ourselves.
So I think that we agree that as a matter of policy, we're choosing between less imperfect options.
But I do think that the case has at least been more rigorously made over the body of work of the last 100 years of libertarian economic scholarship.
Fantasyland, though some of that may be, in a way that is missing for what the exact quotient would be of exactly how much of a regulatory apparatus without being too much, exactly how much competition we want while also restricting the international dimension of it.
And I think that perhaps that puts the new in the new right, right?
And so perhaps this is being developed, you know, and intellectualized as we speak.
Partly.
On my side, you have to turn to, because the right has, you know, there were conservative or Republican figures who made their piece with the vision I described, most notably, I would say, Eisenhower and Nixon.
And I kind of placed Trump as an inheritor of, he skips over in a way the Goldwater-Reagan, you know, George W. Bush tradition.
Donald Trump is a sort of inheritor as more of a Dwight Eisenhower Nixonian president.
But they didn't theorize what they were doing.
They didn't write down like kind of a book of like, here's why we're doing this kind of strange making of the piece with the New Deal order.
I think partly it was political necessity and partly, you know, a lot of these people had lived through the Great Depression and come to realize why markets need restraints.
But so therefore, who are the people who have theorized the vision that I'm putting forward?
It's actually kind of New Deal economists like John Kenneth Galbraith or historians like Arthur Schlesinger and, you know, Richard Hofstadter.
So it's odd because those are often my touchstones in public writing about these issues.
And, you know, some people will be like, well, you're basically citing a liberal historian.
You're on the left.
That, to me, is not a...
But just to say that there is a body of work that's very rigorous and has a place of eminence on the mainstream or the center-left, but that within the conservative tradition, what I'm trying to carve out is sort of under-theorized, so I agree with you there.
Yeah, it's under-theorized as to how that would otherwise inevitably, a conservative might say, that framework inevitably leads to the advancement of liberal substantive goals.
And is there a possibility of advancing a conservative alternative vision using the same instruments, I think, is maybe under-theorized.
To me, union workers having...
You know, stable jobs, being able to support a family on one or one and a half income, being able to have the peace of mind to go to church, to retire in safety, that's a conservative outcome.
Yeah, I agree with you on that.
I fully agree with you on that.
I think the question is, you have those in the sort of national libertarian strain who might believe that the reason we want to advance these policies is because it's consistent with an ideology.
I reject that.
I don't value these principles because they're more important than looking after the American worker manufacturer.
I care about actually, in part, reviving a vision of true free trade of a kind we don't have.
That's category two that highlighted at the very start, because I think that's the best way to advance the interests of American workers and manufacturers rather than overexpanding the regulatory state.
You know, with that being said, we didn't even get to touch on immigration, which was the topic I was looking forward to getting into.
We're out of time today.
Well, I'll just very say, very quickly, I'm...
Well, I was going to say, if you were open to it, if you were open to it, we could actually have this part two of this.
Yes.
We could have part two of this, you know, because that's going to be a whole separate animal discussion, which I'm really looking...
Exactly.
And I thought all this was the buildup to that, and we ended up taking our near full hour on this alone.
So I appreciate it, Saurabh.
And if you're up for it in the next couple of weeks, let's pick this up where we left off and Same principle of discussion and exchange as applied to the question of immigration.
Let's do it.
I'd love that.
Thank you, Vivek.
Thank you.
Take care, my man.
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