Kamala Harris is beginning to offer the first definitive clues of a new economic vision — one with the potential not only to offer a unifying vision for the Democratic Party but also to serve as the foundation for a governing philosophy that crosses party lines.
In recent years, both parties have broken with a markets-know-best default setting. The question is, what comes next?
One influential school of thought, advanced by Ezra Klein and Derek Thompson, argues for increasing the supply of essentials such as housing, health care and clean energy, in part by using government to break the choke points that make these goods too scarce and costly in the first place. This has truth — the much-criticized million-dollar-toilet problem gets at something real.
But it doesn’t fully reflect the realities of how powerful interests hold captive parts of our economy, and then our political system. A second intellectual camp focuses on these forces, and its avatars include Lina Khan, the chair of the Federal Trade Commission and the modern antitrust movement, and the U.A.W. leader Shawn Fain and re-energized labor unions. Yet it, too, is incomplete as a governing wisdom, as it lacks affirmative answers for our largest challenges, like how to decarbonize quickly and at scale, and how to contend with a rising geopolitical competitor in China.
Ms. Harris’s early proposals suggest she is drawing from both strands in telling a more holistic and entirely new story about how the economy works and the aims it should serve. Put differently, her slogan “We’re not going back” might well extend beyond political and social rights to include a different brand of economics.
This new story has two themes — call them “build” and “balance.” The first focuses on pointing and shaping markets toward worthy aims; the second corrects upstream power imbalances so that market outcomes are fairer and need less after-the-fact redistribution.
Let’s start with “build.” On one level, it literally means building things again — rebuilding America’s physical, technology and energy infrastructure, using trillions of dollars in public investment to stimulate private dollars and create good unionized jobs to boot. This modernized revival of industrial policy is the heart of the Biden administration’s legislative legacy, one that Ms. Harris can rightly take credit for.
Ms. Harris deepens this story in two ways. One is her plan to build more housing — she pledges three million new homes during her first term. But the big unfinished business is to invest not just in things but also in people. The Biden administration tried, but its initial legislative package, which included investments in education and efforts to defray caregiving costs for children and seniors — was quashed by opposition to the overall price.
Strengthening our care and educational systems are a clear passion for both Ms. Harris and Tim Walz and how they could burnish a distinctive legacy. Beyond Ms. Harris’s plans for an expanded child tax credit, this could mean the institution of universal pre-K and free school lunch. Not only do these measures lower costs for working families; they also pay for themselves in a stronger work force, higher productivity and lower welfare and incarceration costs in future years. Instead of smugly denouncing “childless cat ladies,” Ms. Harris and Mr. Walz could present a positive agenda to allay the very real concern of U.S. demographic decline.
Whether things or people, “build” also gets at a bigger point: Markets are a tool, not an end unto themselves. And our government’s job is to set national aims and then shape markets to serve them. While traditional markets are fine for many, even most, things, the weight of experience over recent decades suggests they can miss some essentials — decarbonization, a stable manufacturing base, sufficient quantities of quality housing and child care — and need to be organized and supplemented by active government policy.
Historically, the federal government has done just this. Abraham Lincoln’s transcontinental railroad opened vast interior regions to farming and created new industries, including steel and retail. Dwight Eisenhower’s interstate highway system gave rise to commercial trucking and all the industries it fed. Across most of U.S. history, the federal government has set the gaze of markets and has proved pretty adept at it.
“Balance” is to argue that markets, left on their own, often tend to concentrate power. As a result there are fewer options, worse service, higher prices, lower pay, less innovation and generally less control of our economic lives. It is the job of government to correct these power imbalances — whether between bosses and workers, finance and the rest of the economy, big corporations and their smaller competitors and consumers, or China’s state-driven economy and its trading partners.
Strong antitrust policy is necessary to prevent large corporations from wielding their market power to hurt competitors and customers, especially when trillions of public dollars are flowing into them. The Biden administration made robust antitrust policy one of its hallmarks, this month’s victory over Google among its largest wins. While some well-heeled donors have pushed back on this effort, Ms. Harris’s call to ban price gouging suggests this basic shift is safe.
This same logic extends to trade. Few think that Ms. Harris will break with the Biden administration’s position that targeted export controls and tariffs are necessary to counter what China has built through heavily statist industrial policies multiplied by a population of 1.5 billion across two decades. Yet here, too, there is unfinished business uniquely suited to her. The United States needs to pair its policies with an affirmative vision of how to work with allies. In particular, the focus needs to be less on lowering tariffs, which remain low by absolute and historical base lines, and more on helping U.S. allies to pull off versions of their own green and technology-minded industrial policies. Having briefed Ms. Harris ahead of her first trip to allies in Asia during my time in the White House, I know that the question of this affirmative vision has been on her mind for years.
The main pitfall to avoid is breaking the tenets of “build and balance” into something more à la carte. Take child care, for instance, long a signature issue for Ms. Harris. Ensuring quality child care from birth to kindergarten will take more than just child tax credits. It will require contending with the reach of financial power and market structure, because eight of the top 11 child care businesses in the country are now owned by private-equity firms.
Many of these firms recently lobbied against a broad-based federal child care benefit because, as one noted, it could “place downward pressure on the tuition and fees we charge” and “adversely affect our revenues.” It resulted in higher fees and worse care for families and abysmal wages for workers. This is classic corporate extraction, with an economic toll topping $200 billion a year. Ms. Harris (and Congress) could end it by closing the carried-interest loophole as part of the looming tax fight next year.
The other risk for Ms. Harris is that Donald Trump and JD Vance could claim the “build and balance” vision as their own. This vision is finding adherents on both sides of the aisle. Mr. Trump and Republican leaders such as Marco Rubio, Josh Hawley and Mr. Vance have been courting organized labor since Mr. Trump outperformed among union members in 2016. And while Mr. Trump’s current message focuses on foreign threats crossing U.S. borders, whether low-wage immigrants or cheap Chinese goods, the broader ranks of the “new right” also embrace stronger antitrust measures and industrial policy.
One obvious question this “build and balance” vision raises: Hasn’t the Biden administration been pursuing a version of this? Many of its policies have done just that. But policies do not make a story — and many of its benefits will arrive only on the next president’s watch.
It is early days, of course, and this sketch is in pencil, not pen. There will be many who will seek to erase the inconvenient parts. But what it has going for it is authentic roots in the records of Ms. Harris and Mr. Walz. And it has a broad appeal — across both the left and the right.
Jen Harris served as the senior director of international economics on the National Security Council and National Economic Council. This article originally appeared in The New York Times.
