• All economies are planned, the conflict is between who gets to make the plans: individuals or a centralized few
  • A segment of conservatives are embracing “common good capitalism,” which is just warmed-over central planning and protectionism
  • There are several critiques of this movement, this article focuses in on three major flaws

All economic activity is planned. Buying, selling, saving, investing, and all other activities are the result of someone’s plan.

Perhaps the most impassioned — and at times violent — debate of the past two or three centuries has been over who is to do the planning.

As Friedrich A. Hayek wrote in his 1945 essay “The Use of Knowledge in Society”:

This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.

As such, every public policy decision pushes society in one of two directions, closer to determining who is to do the planning: individuals or a centralized authority.

There has emerged of late a segment of conservatives desiring to override free-market capitalism —characterized by allowing individuals to craft and pursue their own plans freely — with a strain of centralized planning they label as “common good” capitalism.

While selling it with such noble desires as strong families, communities, and civic engagement, advocates for common-good capitalism seek policies that would move our economy in the direction of central planning, which they justify on the false notion of a “common good.” Central planning based on the common good often serves as a pretext for left-wing tyranny.

While the arguments for and against common-good capitalism are numerous and often lengthy, this article will focus on three key points.

There Is No Such Thing as a “Common Good”

As I’ve written previously, a “good” can only be experienced by the individual. Each person has unique desires, values, needs, and priorities; there is no such “good” that can be enjoyed equally by everybody in common.

Scarce resources and the results of productive processes are valued and perceived differently by individuals. One man’s junk is another man’s treasure, and vice-versa. Even something seemingly innocuous like warm sunlight on a summer day is experienced differently by unique individuals. To one it could present a soothing warmth, but it could represent a health threat to be avoided by a fair-skinned melanoma patient.

When it comes to politically chosen ends, the “common good” is typically determined not by a majority within society, but by the most powerful members of the ruling class, designed to serve their preferred set of outcomes.

As George Mason University economist Donald Boudreaux recently wrote, “(t)he hubris here is undeniable”:

“Common good capitalists” not only presume to have divined which concrete ends are best to guide the actions of hundreds of millions of individuals, nearly all of whom are strangers to them, but also are so confident in their divinations that they advocate pursuing these with the use of force.

Every economic public policy decision pushes us closer to either central planning or a free market, and the willingness by common-good capitalists to use government coercion to achieve their desired ends decidedly pushes us closer to central planning. Whose plan is being carried out in the name of the “common good”? Not the people’s.

Why Force Manufacturing Jobs?

A common refrain from the common-good capitalists is that America needs to increase its manufacturing jobs and output significantly. To folks like American Compass director Oren Cass, manufacturing jobs are the key ingredient in rejuvenating families and ensuring more workers are earning their “fair share” of the nation’s economic growth.

Cass readily admits, however, that his favored industrial policy promoting manufacturing “has nothing to do with the most efficient allocation of resources at any point in time.” Rather his concerns focus on supposed respect for workers and the promotion of strong families.

How favoring manufacturing jobs over other types of professions promotes strong families goes largely unexplained. Moreover, the admission that a government-subsidized and protected manufacturing industry is not the most efficient allocation of resources suggests that Cass and company are fine with a lower standard of living for American workers, because such inefficiency leads to lower wages and overall output in the economy.

How does forcing more financial stress and inability to access goods and services through lower wages promote stronger families? This question, too, goes unanswered.

There is also a tendency to romanticize a past in which manufacturing jobs were the backbone of the economy. But how do we know people would be more satisfied with physically challenging and repetitive manufacturing jobs than they would with what jobs are available today?

By imposing a centrally planned industrial policy that favors manufacturing jobs over others, many workers will see their primary job choices taken away, only to be sent begrudgingly to the shop floor.

“National security interests” are also often invoked as an excuse for forcibly beefing up domestic manufacturing. American consumers are said to be too reliant on “hostile foreign powers” to produce the goods they purchase.

But free exchange between the members of different nations encourages cooperation and diminishes the incentive for a nation to aggress against a key trading partner. As the old saying goes: “When goods don’t cross borders, soldiers will.”

Faulty Justifications for Trade Restrictions

Perhaps the most favored policy prescription among the common good capitalism crowd is trade restriction.

Oren Cass summed up their argument in a 2019 New York Times op-ed: “More trade is good, if that trade is balanced. But huge trade deficits represent supplies [produced by] foreign workers entering the United States market from afar with no commensurate rise in foreign demand for what American workers produce.”

The assertion is that trade deficits represent a diminished demand for U.S. made outputs. As such, if the government erects barriers to foreign-made goods, demand for domestic goods will rise and create more of the cherished manufacturing jobs, according to their theory.

This claim, however, “is both factually false and rooted in a mistaken premise,” writes Boudreaux.

“It’s factually false because most dollars that foreigners do not spend buying American exports nevertheless return to the US; they do so as investments,” he explains.

These investment dollars fuel demand for American-made products, either directly when a foreign company uses U.S. dollars to build a new store, or indirectly through the purchase of government bonds, the proceeds of which are spent domestically.

“(F)oreigners are just like us,” Boudreaux concludes. “(T)hey produce and sell in exchange for dollars only because they want to spend or invest those dollars, ultimately in the U.S. And the spending and investing of dollars by foreigners creates demand for American labor no less than does the spending and investing of dollars by Americans.”


The stated goals of those promoting “common-good capitalism” are laudable. Strong families and communities combined with greater civic engagement are no doubt worthy aspirations. Their preferred means of attaining such goals, however, miss the mark.

The result would be a greater concentration of economic power in the hands of the elite few, and the corruption and poor economic results that follow. Poorer households with fewer choices and greater financial anxiety do not make for stronger families and communities.