A Classical Liberal Case for America 2.0
The concepts of conservatism and liberalism are increasingly outmoded in today’s politics. One side now professes belief in a kind of ethnonationalist, big-government, protectionist, America First ideology. The other too often pushes social and economic ideologies that focus excessively on group claims, redistribution, and suspicion of wealth creation.
It is now heterodox to advocate for limited government, pro-market economics, free trade, and a socially centrist politics that recognizes and respects diversity while still taking majority well-being seriously. Limited government does not mean a weak or indifferent state. It means a state constrained by law, disciplined in scope, resistant to capture, and capable of performing its legitimate functions well.
Pro-market economics does not mean pro-corporate economics. It means moving away from crony capitalism, where large businesses use legislative and regulatory capture to amplify their natural market advantages, and toward a genuinely open market system in which small businesses, entrepreneurs, and new entrants can compete on a relatively level playing field. The failure is not capitalism but regulatory capture, monopoly power, rent-seeking, and political influence by concentrated wealth. This is a distinction that runs through the work of Adam Smith, Hayek, and Ostrom: markets require rules, competition, dispersed knowledge, and institutions that prevent power from becoming entrenched.
To rebuild the political center, we must understand what makes America a great country. This is a list rooted in the liberal constitutional tradition of Locke, Smith, and Madison:
- A focus on individuality, personal liberty, and individual agency
- Democracy and constitutional government
- Separation of church and state, with secular government that protects freedom of religion and freedom from religion
- Pro-market economics
- Free trade
- Entrepreneurship
- Immigration and openness to talent
- A global rules-based order supported by a powerful military, a broad network of alliances, and American soft power
- The rule of law: restraining arbitrary power, protecting property rights, making contracts enforceable, and punishing embezzlers and fraudsters
The engine of American greatness formed through the nineteenth century and solidified through the twentieth. It was built on the nine pillars above. The postwar period established an America that dwarfed every other country and, even today, remains the world’s largest economy.
But that preeminence is being threatened by forces from both the left and the right. On the right, the danger is attacks on the rule of law, ethnic nationalism, protectionism, and retreat from democracy and internationalism. On the left, it is distrust of entrepreneurs, distrust of markets, and a growing tendency to treat unequal outcomes as proof of systemic failure rather than as problems requiring careful institutional analysis.
While there are serious challenges facing America — poor healthcare outcomes, weak educational performance, insufficient protection against catastrophic economic and medical shocks, a higher infant mortality rate than other advanced countries, elevated poverty compared with other OECD countries, poor infrastructure, and an increasingly fractured society — none of this disqualifies the nine pillars.
What it shows is that there is a sclerosis in our political system that prevents us from adapting to a changing world and addressing fundamental problems. Our taxation system is broken. We equate a social welfare system with socialism, which is nonsense. Our immigration system is a mess. We equate capitalism with low taxes. We treat facts and science as elitist. We elevate emotion over reason. We push ideology into our schools instead of knowledge. And we no longer even share a common ground truth.
But this is not a problem with the nine pillars. It is an opportunity to introduce a tenth: good governance.
On our 250th anniversary, it is time to think seriously about how to fix America: an America 2.0.
To start, we must abandon the reckless attacks on the nine pillars. They work. We do not. The failure is not that these principles are wrong, but that they have been corrupted, selectively applied, or detached from the institutional competence required to make them work.
To fix America, we must begin laying the foundations of good governance. This means a system that:
- Is not heavily influenced by the powerful or wealthy
- Maintains the independence of its institutions from executive and political influence, and remains secular and free from religious or ideological capture
- Provides a basic floor of security: food, shelter, healthcare, and education
- Punishes corruption and self-dealing, and makes insider dealing by public officials a crime
- Improves democracy through ranked-choice voting, limits on gerrymandering, and easier voting access
- Improves government transparency by identifying funding sources, contract awards, and channels of influence
- Improves basic education and media literacy
- Extends property rights to information property
- Guarantees a truly independent Supreme Court that is not beholden to the left or the right, but to the rule of law
Improvements to governance help the majority and impede bad actors. Unfortunately, our system often works the other way around: the majority suffers while bad actors prevail. The super-wealthy control large parts of the media ecosystem. Healthcare is shaped by private equity and insurance companies instead of providers. The corrupt use taxpayer funding to enrich themselves. Authoritarians usurp institutional constraints. And opaque private organizations exert undue influence over government policy.
Fixing America does not mean throwing aside what made it great. We are a nation of immigrants, a nation of free thinkers, and a nation of entrepreneurs. Let us now build the tenth pillar: good governance. Achieving this will require both statutory and constitutional changes, and it is perhaps the greatest endeavor we can undertake. It should not be a partisan issue, but a new American project.
These ideas are not new, but they do reflect a renewed institutional way of thinking: one that connects institutional design to actual policy outcomes. This tradition can be seen in Acemoglu and Robinson’s Why Nations Fail, North’s work on institutions, and Easterly’s warnings about the pitfalls of technocratic development policy.
Until the issue of governance is resolved, we will struggle to address the nation’s many other problems — and we will weaken our ability to use the nine pillars to remain the preeminent power for the next 250 years.
