The Techno-Industrial Policy Playbook, published by American Compass, The Foundation for American Innovation, The Institute for Progress, and New American Industrial Alliance (NAIA) Foundation, is being sold as a bold new blueprint for American renewal. It proposes that the federal government directly invest in politically chosen “strategic sectors,” led by a National Investment Council and a presidential Chief Investment Officer.
The message is simple: America must compete with China, rebuild its industrial base, and restore national greatness. But the policy prescription is anything but conservative. It’s industrial policy — a warmed-over central planning scheme that expands government authority in the name of economic vitality.
As someone grounded in free-market economics and classical liberal principles, I have three core objections to the playbook, each based on sound economic theory and real-world evidence.
First, the playbook misdiagnoses the source of American industrial decline, blaming free markets for problems caused by government failure. Second, it wrongly glorifies manufacturing as the benchmark for national success while ignoring technological progress and worker preferences. Third, it proposes top-down interventions that will entrench bureaucracy, reward special interests, and ultimately slow economic growth. This playbook doesn’t revive “conservative” economics — it replaces it with technocratic nationalism that looks more like progressive central planning than anything resembling liberty or limited government.
Let’s walk through each issue.
National conservatives claim that free markets abandoned America’s heartland. In reality, government failure drove investment away. Rust Belt cities like Detroit, Cleveland, and Buffalo didn’t wither because of capitalism. They collapsed under decades of poor policy choices: excessive taxation, inflexible labor unions, hostile zoning rules, bloated public payrolls, failing schools, and declining public safety. Businesses didn’t leave out of disloyalty — they left because politicians made it unprofitable to stay.
Meanwhile, jobs and capital flowed to states that protected economic freedom and other countries where it was more profitable. States like Texas, Florida, Tennessee, and even Colorado have outperformed many of their peers through stronger spending limits, more predictable tax environments, and competitive labor markets. Where policymakers trusted people over bureaucracies, prosperity followed. That’s not a failure of capitalism — it’s a case study in how markets respond to better limits on government, though those states could use more limits.
The playbook also claims that manufacturing is the backbone of national strength. That’s a romanticized notion more than a modern reality. America hasn’t deindustrialized — we’ve modernized. The US remains the world’s second-largest manufacturer, accounting for about 17 percent of global output. Real manufacturing production has nearly doubled since the 1990s. What’s declined is manufacturing employment, largely because of productivity gains. Machines now do what workers used to. That’s not a decline. That’s economic progress. The push to bring back those jobs, even through heavy subsidy or coercion, misses what most Americans actually want. They don’t long to return to factory floors. They seek flexible, meaningful, and often service-oriented careers in tech, finance, or entrepreneurship. We shouldn’t funnel workers back into yesterday’s economy. We should expand their freedom to pursue tomorrow’s opportunities.
Then comes the playbook’s solution: scaling up Washington’s power to steer markets in the name of national interest. But no matter how strategic the branding, this is just central planning. And it’s built on a false premise — that bureaucrats in DC can outthink millions of decentralized choices made each day by individuals and businesses. History has repeatedly shown what happens when the government takes the reins. Solyndra wasted over $500 million in taxpayer funds. The CHIPS Act has been a disaster. COVID-era spending lost more than $200 billion to fraud and waste. And DOGE.gov has flagged over $165 billion in wasteful government spending — more than $1,000 per taxpayer. These aren’t outliers. They’re baked into the cake of central planning.
The Department of Government Efficiency (DOGE) found wasteful spending of $233 million in DEI grants, including a $1 million program on “Antiracist Teacher Leadership.” The Department of Defense admitted to $80 million in wasteful spending. One government contract paid $181,000 for a climate advisor in Central Africa. More than 500,000 government credit cards were found active across 32 agencies. The estimated savings so far are $165 billion, or more than $1,000 saved per taxpayer. While this didn’t reach the $2 trillion proposed by Elon Musk, that wasn’t going to happen because doing so would require reducing welfare spending on mandatory programs like Social Security, Medicare, and Medicaid. Congress must act now.
Friedrich Hayek explained why in The Use of Knowledge in Society: central authorities simply cannot gather and respond to the complex, dynamic information embedded in market prices. Even well-meaning planners can’t substitute for the distributed intelligence of free people responding to real signals, especially well-functioning market prices. James Buchanan’s public choice theory adds another layer: government actors are not immune to self-interest. They face incentives to reward donors, expand budgets, and serve entrenched interests, not to maximize efficiency or innovation.
So what should we do instead?
The answer isn’t to direct the economy from the top down. It’s to remove the barriers keeping people and businesses from thriving, as advocated by classical liberalism and embodied in many ways by freedom conservatism principles. Rather than expanding the state, we should limit it, sharpening its focus and unleashing its citizens.
That starts with sustainable budgeting. Government spending should be reduced and grow thereafter no faster than the rate of population growth plus inflation. Several states — like Texas, Iowa, North Carolina, and Colorado — have successfully implemented this principle, keeping government growth aligned with the average taxpayer’s ability to pay for it. We also need serious federal tax reform. The current code is riddled with carveouts, subsidies, and disincentives to save and invest. Flattening the tax structure and moving toward a consumption-based system would support long-term growth and reduce political manipulation. Extending the Tax Cuts and Jobs Act and spending less are keys for this year, but longer term, there is a need to substantially improve the tax system to fund only limited government spending.
Education is another cornerstone. Universal Education Savings Accounts (ESAs) by states, as the federal government should get out of education altogether, let parents — not politicians and bureaucrats — choose the best path for their children. That may be a government school, private school, homeschool, or trade school. Real choice drives real results. Healthcare deserves the same treatment. This includes restoring the doctor-patient relationship and lowering costs through no-limit Health Savings Accounts, Medicaid block grants to the states, and deregulated provider markets.
Perhaps most importantly, we must return to competitive federalism. Washington doesn’t have all the answers — and never will. States should be empowered to lead, compete, and innovate. That’s how policy improves and liberty expands. This means the federal government must reduce its roles in the executive, legislative, and judicial branches. Real community, too, can’t be centrally managed. National conservatives often argue that markets corrode culture. But in truth, voluntary exchange and personal responsibility create the conditions where community can thrive. Families, churches, and local institutions aren’t built by mandates — they’re built by people who are free.
The Techno-Industrial Policy Playbook represents a fundamental shift away from this understanding. It proposes that the solution to government failure…is more government. But those of us who believe in freedom know better. Liberty doesn’t need a five-year plan. It needs guardrails, not gates. It needs accountability, not committees. And it needs trust — in people, in markets, and in the timeless truth that free societies produce the most prosperous, dynamic, and moral outcomes the world has ever known.