Welcome to the montgomery Federalist Society luncheon. Im allen mendenhall, dean of the Royal College of business at troy, executive director of the manual Johnson Center for political economy and president of our local montgomery chapter here, the federal society seeks to sponsor fair, serious and open debate about the need to enhance individual freedom and the role of the courts. In saying what the law is rather than it ought to be. The underlying irony behind the aptly named edmund burke foundation, which was founded in 2019 to fund the National Conservative movement, spearheaded by yoram mazzoni. Is that burke widely considered the father of modern conservative political, championed economic liberalism. He was johnson and joshua reynolds, the Literary Club in london that included none other than adam smith among its prestigious members. Burke was smiths friend and favorably reviewed theory of moral sentiments in the wealth of nations. His speech on conciliation america and speech on american taxation reveal the extent to which he believed that the American Revolution involved disputes in fact escalating british restrictions on trade imposed by the navigation of 1663, 1673 and 1696. The sugar act of 16 seems to be 1764. The stamped act of 1765. The townshend duties of 1767. In 1768, the boston port act of 1774, among others, whipped the colonists into a patriotic frenzy. Such tariffs and taxation flew in the face of the free trade advocated by scottish contemporaries adam smith and david hume, who was also a member of the Literary Club the american colonist, the founding era, the 16, 17, 16, excuse me, through the early 18th, hundreds instituted quality diet of changes in government and culture that differed both from the class european styled conservatism and the violent utopian radical ism that beset the french revolutionaries. The practical and pragmatic industrious and optimistic the colonies. And later, several states rejected the tradition and legal regime of hereditary that characterize 18th and 19th century european conservatism. Jefferson and madison sought to abolish the feudal practices of intel and primogeniture. For instance creativity and deliberate, characterized the founding which involved robust debates about constitutionalism federalism concern of the governance, separation of powers, individual liberty, the relationship between church and state and the public versus the private sphere. Owing to expanding literary literacy rates, extensive records from that era, we can study the prevailing political and governmental theories of the founding generation in ways that are not possible for previous eras. That left fewer records from fewer individuals. One reason the stamp act was so offensive to colonists is that it regulated paper on which naturally they disseminate information regarding law polity, current events, finances, education and so forth. The stamp act was an affront to. The republicanism represented proliferated by written letters and, essays. The 19th century solved the the rise of the socalled american system of economics epitomized by protectionism, mercantilism and centralized Alexander Hamiltons report on the subject of manufacturers published. 1791 inaugurated this tradition that frederick list and Henry Charles carey later championed john quincy adams. Henry kent. Henry clay and Abraham Lincoln are the most notable politicians associated with this system, which eventually influenced the works projects regulatory, schemes and infrastructure investing roots of fdr. New deal deal. The report on the subject of manufacturers reflects the prevailing mercantilist views of the 18th century and advocates for trade. According to the infant industry theory, which holds that nation, countries or industries require import duties and tariffs until they achieve economies of scale necessary to compete. Other countries and industries. The america of hamiltons era was quite different from 19th Century America when essay reached print not years had passed since the tree of paris in 63, which secured dominance over france and spain in the new world, and both that era in 19th century are far different from our present era. Today we hear cries from both the right and the left for a return. The american system and industrial policy, and for the rejection of Free Standing against trend is dr. Samuel. Dr. Samuel gregg, author of the book the American Economy nation, state and markets and an uncertain. Dr. Gregg is a distinguished fellow in political economy and Senior Research faculty at the American Institute for economic research. He has a doctorate in moral philosophy and political economy from Oxford University and a masters in political economy from the university of melbourne in australia. He has written and spoken extensively on questions of political economy, economic history, monetary theory and and natural law theory. He is the author of 16 books, two of which have been shortlisted for conservative book of the year. He is a fellow of the historical the Royal Historical society an affiliate scholar, the acton institute, a fellow, the center for the study of law and religion at emory university, a visiting scholar at the Heritage Foundation, a member of the montpellier and society a member of the Royal Economic Society and a member of the philadelphia society. He served as president from 2019 to 2021. Before i call him up here, i would just everyone to silence your phone so we dont have any ringing while the cameras are on. And after the talk. If you have questions, if you wouldnt mind lining up at the microphone over here to ask those with that, please join me welcoming dr. Samuel gregg. Thank you, alan, for the kind introduction and thank you to the Federalist Society for the invitation to speak to you all here today. So in one sense this is a talk about my book, the next American Economy, which came out in october last year. And its still doing the rounds. So i guess it must played into something. But while this is a talk about my book, its also, i think, a time to talk today about another phenomena that i think characterized American Economic debate, and particularly American Economic debate among american conservatives over the past eight years. And im sure youre all aware this and that is the breakdown the breakdown in the. Post 1970s consensus concerning proper stance of conservatives in america vs of the economics and Economic Policy, it became very evident to me back in 2015, i think for obvious reasons that the american right who wanted a better expression was starting to fracture around the topic of Economic Policy, especially trade policy, and that a consensus, this free market, economic liberty free trade consensus, which some people on the American Center left, people like president clinton had to an extent shared in this consensus was starting to break. So what was this consensus . Well, basically, it an emphasis upon the value of free. An attention and appreciation, rigorous competition at home and a commitment to expand free trade abroad, as well as an associated commitment to limiting the governments into the economy, especially the reach of the federal government. Now, i think there, was a gap and a pretty significant gap sometimes between conservative rhetoric on these matters and conserva tive reality. When it came to actual policy achievements, but with some notable outliers, that was the consensus on the american right regarding Economic Policy. And it started very publicly disintegrating. In 2015, although i think and i talk about this in the book, early signs of that break up had been there all along for those with eyes to see all the way back to. Pat buchanans 1992 campaign for republican nomination to become president of the united. And you remember that one of the key planks, buchanans platform was we need to stop the playing the free trade game. Now i have many thoughts about the hows, whys of the breakdown of. This particular consensus. And im not going to dwell on those this afternoon. You can read the book if you want to know more about that, but its safe to say that there is a lot of to spare to it to spend around. And that includes, by the way many of my fellow free marketers, those free marketers who took too much for granted, those free marketers who assumed that the idea bad all about economics and Economic Policy had been one or those marketers who had bought into the end of history arguments that were associated with the political scientist Francis Fukuyama and his book the end of history the last man that was very popular in the early 1990 is in which led many and not just people on the right but even people on the left who believed started to believe free markets and liberal were simply inevitable. And it was a question of how fast different got their. Now i could spend a lot more time talking about the past, but i want to say about the consequences, the serious consequences. I think of the breakdown of this consent is on the right concerning economics and Economic Policy because the consequences are not just limited to intellectual squabbles or debates about economic the consequences think are actually very real and very damaging. So let list just a. First of all, Many Organizations that were once reliably free market in their Economic Outlook are no longer so now that consequences for what they teach conservatives in america about economics. It also has consequences for they advise legislators when they think about and vote economic matters in. Second. Many, if not most of the new conservative organizations have come into existence over the past ten years, have tended and sometimes than tended towards nationalism in their economic positions. Now that too obviously consequences for what many younger conservatives are being taught about in terms of economics and Economic Policy. Third, some republican politicians had publicly stated their openness. Theyre willingness to consider particular forms of intervention by the federal government commonly known as industrial policy, and even in a few cases, some have actually argued that we should be more like china in that to be even more concrete. Some republican politicians policy positions on a good number of economic subjects, and now not that different in their substance from the economic articulated by people like senator bernie sanders, senator Elizabeth Warren, both those latter two senators are very much economic nationalists. And if you compare their policies to some pretty senior wellknown senators, theres little difference forth this collapsed consensus about Economic Policy means that there is much less resistance on the part of conservatives to expand of state power into economy. In some cases that even extends to a stated willingness by some conservatives to use an even expand the Administrative State to try and realize some specific economic goals with failed to win back the Administrative State, the argument goes that we may as well use it to achieve our own ends. Now that outlook is remarkably wide spread today on american right, despite the fact that a good deal of american conservatism wants to find itself in terms of opposition to progressives and modern liberals who have always seen the Administrative State as way of the future. In other words, a good number of conservatives have effectively progressives in the way they think about and view the Administrative State. But its not just the political and policy realignments. I think we have to be concerned about. We should also be concerned about the implications of this shift for the country, because as a country, we have been declining in critical areas Like International competitiveness, but also broad measures of Overall Economic freedom. Since 2008. So back in 1995, the Heritage FoundationFirst Published its index of Economic Freedom. And when that was published in 1995, america was ranked as the worlds fourth freest economy. Today. In 2023, the same index tells us that america. Ranks 23rd. So thats a substantial down to fall in of our Economic Freedom vis a vis other countries. And over the past ten years, once you take the sudden declines and surges associated with the impact from and recovery from covid, americas average growth rate, economically speaking, has been miserable has been terrible by international standards. And thats a problem because anemic Economic Growth translates into a weaker economy and a weaker economy translates into weaker country. And above all, americas economy is drifting more and more in the direction of i call in my book state capitalism. So you might ask, what is state capitalism . Well, state capitalism is an economy in institutions like private property and market transactions are maintained in place. But in which Government Programs and regulations permeate every sector of economic and in which we put our faith in tech and the crafts to try engineer specific outcomes in different economic sectors despite all the documented failures of such approaches and despite all the well known dysfunctionality issues that come along with those types of policies or, lets take another angle. Prepandemic, Us Government spending between 2015 and 2019 averaged between 35 and 36 of gdp american gdp. Thats a lot. But in that light, i dont think we should be surprised that nine of the 20 wealthiest counties in the United States today are located in or around washington, d. C. , which produces nothing. Im serious. Nothing. Its government. Government is industry. In other words, cronyism is flourishing in america. And i dont think conservatives should be the business of proposing policy. Hes whether its tariffs, subsidies, industrial policy or ever increasing regulation that exacerbates this problem. So put another way, the reality of america and capitalism today is very far removed from the less safe mythologies that we hear propagated by american progressives. But now also some conservatives. And i think the last thing we need today is for significant numbers of conservatives to be advocating for state capitalism, lives for that is to the mindset of progressive. And progressives are in the business of putting as much distance as possible between the principles of the american founding and. The trajectory of contemporary america. I say again Economic Policy shows Many American conservatives are turning into progressives in the way they think about the state and Economic Policy. And this brings me to yet another reason why i think we should be about this turn away from markets by Many American conservatives. And the reason is its damaging a american conservatives policy integrity and that turn reflects, i think, an unhealthy desire for power and an unhealthy willingness to sacrifice truth to the attainment of. Let me give some examples. We have been informed by, some conservatives, that adams only applied his free trade principles to domestic investor. Thats simply untrue. Just read the wealth of nations. Other conservatives are now us that the new deal was a marvelous thing. Now this is despite the mountains of evidence assembled by economic historians, including by a good number of progressive historians indicate that the new deal did not, in fact, get america out of severe recession. Yet other conservatives echoing made by progressives 15 years ago insist that we learn something from Chinese State capitalism. Now this flies in the face of growing evidence, which i think beijing is trying to hide that the wheels are falling off that particular chinese wagon and some of those same conservatives are associating themselves with some people who regard the american experiment in selfgovernance as fundamentally flawed and the roots of our present woes in many cases they are articulating a vision of america that is as directly and esthetical to the founding as that of woodrow wilson, the progressives of the late 19th century and. 20th century. So having depressed you all, whats to be done . How does one rehabilitate the case . Free markets among american conservatives . Again, i have many thoughts about this in the second half of the book is really about that. But here are a few thoughts id like to offer you today. First, many things are already being done like engaging and contesting economic nationalists and policy debates. I think those should be continued. That means promoting the of rigorous economics that highlights the will establish most welldocumented problems with economic nationalist policies. There is, for example, a consensus in the economic literature that shows how free trade grows and economy over time, and also shows the deep econom