In a new piece for RealClearMarkets, Market Institute President Charles Sauer takes on Vice President JD Vance’s call for a Republican economic agenda that moves beyond the “old free-market consensus” in favor of a more interventionist approach to the economy.
During a recent appearance on Michael Knowles’s podcast, Vance credited President Trump with moving the Republican Party toward what he called an “American-developmental approach” — one that is “more Alexander Hamilton than Milton Friedman.” That vision embraces a larger government role in shaping the economy through policies such as tariffs, industrial policy, and potentially even government ownership stakes in private companies.
Sauer argues that this shift ignores both the costs of government intervention and the role free markets have played in creating the prosperity Vance says he wants working- and middle-class families to enjoy.
“What Vance and other critics of free markets ignore is that the prosperity produced by a free market is what makes it possible for the average person to afford to enjoy leisure time with their families.”
Sauer also challenges the idea that today’s Republican Party has been governed by a rigid adherence to Milton Friedman’s economic philosophy. Friedman opposed deficit spending and corporate bailouts and criticized tax cuts that were not accompanied by reductions in government spending — positions that would put him at odds with plenty of Republican economic policymaking over the past several decades.
More importantly, Sauer argues that replacing markets with greater political control of the economy will ultimately undermine Vance’s stated goal of making it easier for Americans to raise families, participate in their communities, and enjoy a higher standard of living.
“The economic problems currently affecting the American people are the result of government interference in the marketplace.”
From tariffs that raise costs to subsidies that encourage businesses to seek political favors rather than compete for consumers, Sauer warns that an increasingly “mixed” economy means more resources directed by Washington and fewer decisions left to individuals and markets.
He concludes that there is a fundamental contradiction in attempting to advance human dignity through greater government control of economic life:
“The Vice President needs to consider whether a society in which parents lay awake at night worrying about being able to afford to fill up their cars or buy enough groceries for their families is one that is ‘about the dignity of the human person,’ or if human dignity is best advanced by allowing individuals to enjoy the blessings of liberty.”
Read Charles Sauer’s full piece at RealClearMarkets.
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