Grand Next Party: American Politics in the Age of Nonalignment

American government is crippled, but not for the reasons most people think. Hopeful talk of an imminent American political realignment too often elides its premise: that an alignment exists to be rearranged. Of course, this assumption holds for the electoral aspects of American politics. Running on that endlessly renewable energy that aims not so much to inform as to entertain, the cottage industry that spins polls into prophecies will always have the latest map to work with. But as at least one or two (though still too few) commentators have pointed out, shifting red and blue patchworks seethe like froth atop the deeper and more determinative currents of power controlled by corpo­rate coalitions.¹ In divining the governing alignments that matter most in the long run, it is more important to understand the incentives of the Fortune 100 than the hundred desks in the U.S. Senate.

The dysfunction characterizing contemporary American politics is best understood not as the consequence of any specific alignment be­tween corporate America and U.S. political institutions, but rather the current lack of any meaningful alignment between them at all. We live in an age in which corporate America has both lost its historic use for an empowered government and continues to see little benefit in re-empowering it, a situation that—all other things equal—appears likely to persist indefinitely. Consequently, the decisive question is whether either major political party—though most likely the Republican Party, as neoliberalism’s current party of the opposition—can implement a timely strategy to short-circuit corporate drift and bring this era to an organic conclusion: some measure of corporate alignment with govern­mental institutions and the citizens they purportedly serve.

The Age of Nonalignment

Put too glibly: there is no power in American politics without corporate sponsors. Unlike software (a capital-light, high-margin product), durable political movements are capital-intensive, low-margin propositions. In the long run, legislative seats are like vote factories requiring reliable, long-term financing and incentives. The highest-visibility mani­festation of corporate power’s influence over government lies in active lobbying efforts, but as the literature on lobby efficacy demonstrates, the link between these activities and particular regulatory outcomes is likely more tenuous than popularly conceived.² Indeed, the success of business lobbying groups appears to lie primarily in their aggregate scale—there are simply a greater quantity of them than citizen‑backed groups, redounding to what Pepper Culpepper describes as “quiet politics”—a kind of muted corporate influence favoring a hospitable and predictable business regulatory environment.³ Visible corporate lobby­ing efforts, in other words, might best be understood as a superficial manifestation of deeper influence rather than its determinative tool.

Enduring “realignment” victories, then, are the result of ascendant corporate coalitions either actively coordinating or, more powerfully, positioning themselves to exert passive, enduring influence to protect their interests—a “governing consensus” that, over time, generates a new bipartisan center. In the modern era, this has happened two, or arguably three, times: first with William McKinley’s associationalism in 1896, next with Franklin Roosevelt’s New Deal in 1932, and third—the arguable case—with the Reagan-Clinton neoliberalism of the 1980s and 1990s.

Functionally speaking, that last identifiable “realignment”—neo­liberalism—inaugurated not so much a new corporate arrangement as a de-arrangement, an age of corporate nonalignment. Through the 1960s and 1970s, for reasons having to do with both shifting global macro­economic conditions and intentional foreign policy decisions, the détente that the New Deal brokered between labor and capital broke down as the returns to domestic industrial production began to dimin­ish. Consequently, the paradigmatic incentive structure for corporate America shifted away from capital investments in new domestic pro­ductivity gains and instead to different forms of government-enabled (and later, even encouraged) arbitrage: substituting domestic labor for inexpensive foreign alternatives, domestic capital investment for cheaper foreign partnerships, derivatives engineering, and share repurchase programs.

Simultaneously, and perhaps more importantly, corporate structures themselves began to shift. The vertically integrated Fordist models of the early to mid-twentieth century were abandoned in favor of “Nike-fied” structures that isolated intellectual property as a pure rent in asset-light holding companies and subcontracted most operations, heavy capital investment, and labor liabilities to “commoditized” low-margin firms. The net effect: far from trickling down, as neoliberal theory predicted, wealth largely flowed uphill and melted into the air above southern Manhattan, enriching an ever-shrinking number of Americans through the course of the 1980s to 2010s.

Decade by decade, however, the tradeoffs began catching up with us: domestic working-class wages began stagnating in the 1970s, followed by the less discussed stagnation of professional-class wages in the early 2000s. Neither kept pace with the costs of the “milestone” goods that traditionally characterized middle-class American lives: family formation, home ownership, healthcare, and education.

Along the way, government attempts to correct for the “externali­ties” of the neoliberal shift have mostly failed, leading to the system’s partial collapse in 2008. “Demand-side” corrections—various forms of debt-fueled “redistribution”—have either been inflationary or insufficient, and any benefits of “supply-side” counterparts—usually in the form of tax cuts—have redounded mostly to the wealthiest members of the shareholding class. The clearest benefits of the “Age of Nonalignment” for most Americans—cheaper consumer goods—have been meager compensation for the compounding losses of so much else. Especially following the 2008 financial crisis, the stagnation affecting so many individual lives has certainly inflamed (if not caused) a host of social and cultural problems plaguing the country today: diminishing social mobility and a staggering wealth gap, massive regional imbalances, an increasingly insular and defensive ruling elite, hardened identity politics, and racial animus. To make matters worse, recourse to govern­ment institutions, lacking the needed support of now nonaligned cor­porations, has to the public long felt like an exercise in futility, an appeal to so-called guardians that seem increasingly feeble and incompetent. Seen this way, the electoral turbulence of the last decade is best diag­nosed as the depressing finale—not the cause—of the despair and general bad feeling that for decades had boiled, repressed, beneath the surface of the public square.

Despite the failure of tinkering at the margins of the neoliberal model, no practical alternative has formed because there is no corporate constituency interested in driving one. This is for two related reasons. First, capital is currently interested in American citizens primarily as consumers, not as producers (the necessary foundation for both asso­ciationalism and its New Deal descendent). Second, maintaining its U.S. consumer base does not require capital to support any coherent positive agenda within the government, only that the Federal Reserve continue to jealously guard the dollar’s status as reserve currency—a relatively low bar, at least in the near term. All other things equal, the nonaligned stance is corporate America’s lowest net cost option, and thus its most predictable course.

Put in slightly different terms, almost no capital interests are aligned with increasing investment and productive capacity within the United States and, by extension, in American workers primarily as units in their productive processes—the alignment required for generating an alterna­tive governing model to neoliberalism. Conversely, in the event that some critical mass of the nonaligned corporations could be induced to enter a beneficial policy compact with the state, those corporations would in turn have incentives to support a coherent, positive policy agenda: one that would protect their new productive interests domestically and, in foreign policy, guarantee stable demand and set more balanced terms of exchange in markets abroad. Further, this new political coalition could serve as the requisite beachhead for negotiating a broader suite of reforms—in administrative governance, labor regula­tion, family policy, and so forth. If reform movements fail, it will not be for lack of strong critiques of the current system, compelling theoretical counter-models, or articulate exponents, it will be because they neglect­ed to attract—or more tragically, never sought out—a capital constituency to serve as aegis and partner.

Whether some reformers overestimate the degree to which popular sentiment drives changes in governance, or underestimate the degree to which corporate power historically underwrites government power, too many continue to believe politics is more like software than industrial production. In one application of software-as-politics, many reformers seem to believe either that relatively capital-light political campaigns and cults of personality can exert charismatic influence that scales—like a software adoption curve—into effective party structures. In another version, others believe that capital-light policy shops can download their agendas into parties over time.

Despite neoliberalism’s obvious failures to secure either performance or popular legitimacy, these mental models may explain why contemporary reform movements have been—and may continue to be—so dis­appointing. In both their right- and left-wing permutations, any spo­radic electoral success they may enjoy in coming years will sour into frustration if they continue attempting to exercise de jure legal power without de facto economic power. Additionally, the elite orientation of the administrative state, which many reformers have identified as a pos­sible counterweight to corporate power, does not exempt it from these same natural laws. Righteous wrath may serve as a disruptive force for a season or two, but it cannot provide enduring fuel for an alternative to neoliberalism. In the long run, capital can be steered by government, but not overcome.

Building a Corporate Coalition

Within the age of nonalignment, the Republican Party has become neoliberalism’s current party of the opposition. After the Clinton administration’s courting of Wall Street and Silicon Valley, the Democratic Party grew culturally hegemonic within the most powerful insti­tutions in America: the university system, mainstream and elite media, Hollywood, and among members of professional sectors like consulting, finance, and law. Even as the Democratic Party has drifted far from the substance of the New Deal, it retained, more successfully than Republicans, its generally progressive spirit and adapted it to contemporary managerial imperatives.

Thus, in policy terms, the Democratic Party is now the primary guardian of the core neoliberal structures that enable corporate non­alignment while promising (but rarely delivering on) progress at its margins. Ironically, because Democratic politicians and operatives are the beneficiaries of nonalignment, when they hold electoral power they are incentivized to be less than energetic in advancing anything resem­bling a real progressive agenda: aggressive tax reform and collection, entitlement expansion, or administrative reform. Neoliberal Democrats engage in little more than pushing the largest possible appropriations bills through the same faulty plumbing, an outcome that nonaligned corporate America can live with (and often even profit from).

To be sure, there is a substantial neoliberal-skeptical reform faction within the Democratic Party, but it is likely to continue playing the same role vis-à-vis the moderate establishment faction that social con­servatives played in the Reaganite “three-legged stool” coalition, extract­ing occasional concessions while leaving the core economic structures untouched. Any meaningful reform movement emerging from the Demo­cratic Party will likely not originate in Washington, but rather through state governors who oversee and understand successful, cutting-edge technocratic regimes—Jared Polis of Colorado being foremost among potential bellwethers. But this outcome is more to be hoped for than expected. For Democrats, even those as capable as Polis, the incentive structure weighs heavily toward status quo maintenance.

The Republican Party, meanwhile, has no durable corporate con­stituency, leaving it as the most likely partner for some new corporate coalition focused on domestic investment and production. Some reformers have called for the GOP to become a “multiracial, working-class party,” implying that it should fully embrace the role of neoliberalism’s American Labour Party to the Democrats’ Tories. While an admirable end goal, the strategy seems to lack the requisite means.

Without strong, preexisting labor unions or urban machines, this version of the Republican Party will either be permanently marooned—perhaps supplying occasional ammunition for ongoing cultural con­flicts—or forced to wait indefinitely for these institutional footholds to emerge. Even if all this were to occur, such a version of the GOP would likely fight a grinding war of attrition to extract concessions from a unified opponent: an undifferentiated, nonaligned corporate sector. A crusading GOP positioning itself to fight a forever-war against the Democrats, the “elite,” the media, the university system, Hollywood, China, and corporate America might sound heroic to some, and might even have some basis in theory, but seems highly unlikely to succeed practically.

Advancing an Alternative Agenda

In generating an enduring alternative to neoliberalism, it seems far more profitable to focus on splitting off a corporate coalition to serve as a partner. Driven by recent global events, four fissures have emerged in the neoliberal nonalignment agenda. These emergent trends represent points of leverage for coordinating a successful corporate coalition—one with profit-based interests in a partnership with the American government to drive domestic investment and productive capacity.

First, the Russian-Ukrainian war has foregrounded clear policy tradeoffs between energy security and environmental issues. The result­ing energy shock is forcing policymakers to confront the underlying tensions—even paradoxes—that the previous decade of cheap fossil fuels covered over. Second, the Covid-19 pandemic has spotlighted policy tradeoffs between rigid public health regulation and efficient health care outcomes, forcing apologies by American public health authorities and delegitimizing a return to the policy status quo ante. Third, the ascent and hostile behavior of China has heightened the contradictions between strategic U.S. industrial autonomy, on the one hand, and, on the other, high levels of Sino-American economic entanglement. Fourth and final­ly, the above three trends, combined with domestic political tensions, have promoted a newfound consciousness about the role that corporate governance frameworks play in properly balancing competing societal goals.

In light of these considerations, the most likely candidates for generating a “post-neoliberal” corporate coalition are as follows: (1) oil and gas, nuclear energy, mining; (2) emerging biotechnology, nonincumbent tech; (3) regional financial firms; (4) defense primes. Amplified and led by a disciplined counter-elite, a clear, digestible, effective policy agenda might look something like the following:

National defense and economic security. To prevent Chinese hegemo­ny in Asia, the United States must harden its defense perimeter by accelerating the arming of regional allies and partners for self-defense. In partnership with U.S. defense primes, who would exchange short-term incentives for medium-term ones, the GOP would coordinate an increase in top-line defense spending with preferential contracting treat­ment for primes. Such a policy package could take the form of direct budget increases within the U.S. Department of Defense and, potentially, indirect increases by financing allied defense budgets to effectively increase their real purchasing power.

In exchange, the primes would support the foundation of a “Defense Industrial Bank” to fund and scale the next generation of high-value military technology projects, some of which would inevitably translate into dual-use civilian applications. Ideally, in partnership with darpa and arpa-e, Congress would capitalize such a bank and ensure dedicated funding streams to a broad spectrum of companies—from established primes to start-ups. Should such an approach prove political­ly infeasible, however, alternative means for creating such a bank via executive power bear further exploration. For example, the Departments of Defense and State, through their jointly facilitated Defense Security Cooperation Agency (DSCA) programs, such as the Foreign Military Sales (FMS) and International Military and Training (IMET), might have the rulemaking latitude to facilitate a bond purchase program for funding foreign defense primes to continue arming their own countries in the medium term. These assets might then be functionally lent against, effectively expanding the U.S. defense R&D budget via leverage.

Depending on structure, regional financial firms—smaller fund man­agers based in cities like Dallas and Denver—might be given priority over multinational banks for jointly overseeing lending terms and matching funding, given their connections to and familiarity with local military bases and defense-adjacent structures and personnel.

National energy security. As the party of smart conservation, the GOP would champion oil and gas as the present and future guarantor of American energy security: supporting extraction of fossil fuels in the present (ensuring price stability in an uncertain world) while, simultaneously, laying track for a real transition to clean nuclear energy within a few decades. In policy terms, oil and gas would receive a long-term, renewable, guaranteed purchase and revenue agreement from the federal government to dramatically expand the Strategic Petroleum Reserve (SPR)—both to protect American consumers from price shocks and to facilitate more LNG sales to European nations weaning themselves off Russian reliance. The fossil fuel industry—especially shale drillers likely facing exhausted well inventories within the next decade—is in search of its next financial paradigm. An attractive alternative model based on an investment partnership with the federal government could be designed and facilitated by the GOP.⁴

Such a policy could take two possible forms. One approach would feature Congress passing legislation modeled on a “Farm Bill” for the fossil fuel industry, which would authorize federal funds for purchase agreements between producers and refiners administered by the Depart­ment of Energy, which has jurisdiction over the SPR. As part of these negotiations, Congress might need to consider raising the authorized volume of the SPR, which is currently capped at one billion barrels by statute.⁵ Alternatively, as suggested by Alex Williams, Arnab Datta, and Skanda Amarnath of Employ America, another approach could feature the Treasury Department using the Exchange Stabilization Fund (ESF) to guarantee forward demand and thus de-risk investment in new pro­jects. Deploying a combination of both put option purchases and loan guarantees, Treasury could effectively lower industry investment hurdle rates (the return rate firms require to justify greenfield investment) to facilitate drilling for smaller and more speculative well projects.⁶

In either case, in exchange for the federal government underwriting these new revenue streams, oil and gas would agree to divert some percentage of those revenues to funding next generation nuclear energy projects, the intelligent reregulation of which the GOP would priori­tize. At the state level, the GOP would fund candidates and lean on state legislatures in favor of reversing moratoria on new nuclear energy facilities, which are currently active in twelve states. Modeled on extant red state policies incentivizing data center investment, passing state level legislation to further incentivize nuclear investment via tax credits would make a natural addition to state GOP platforms.

Simultaneously, at the federal level, the party would prioritize con­firming commissioners to the Nuclear Regulatory Commission (NRC) who favor the repeal of the highly restrictive “As Low As Reasonably Achievable” (alara) standard for regulating radiation exposure. Intro­duced and codified in the 1970s, alara has effectively strangled new nuclear projects, even in jurisdictions where they are legal. Even though a recent, expert-backed NRC petition to repeal the standard was unsuc­cessful, alara continues to fail the test of common sense and is a target ripe for the GOP to attack. As Emmet Penney has put it: “if we used alara for any other industry, we would shutter the airlines immediately, evacuate every Colorado mountain town, and bulldoze the DeVargas Skate Park in Santa Fe, New Mexico, which sits on a granite deposit shot through with uranium. All three of these expose portions of the population to elevated levels of radiation on a regular basis. But we don’t do that for any other industry, just nuclear.”⁷ Moving beyond this standard is the key regulatory enabler for a GOP-led effort toward a long-overdue revolution in American energy production.

In addition to financing the nuclear projects themselves, new infra­structure projects necessary to retool the electric grid and to service new reactors would be of interest to the aforementioned regional finance firms, smaller outfits which could again be granted state contracting priority over multinational banks, justified by the former’s greater state and local expertise and relationships with regional utilities. The U.S. mining industry would also benefit from the spillover effects of these policies; mandating domestic production and refining of the rare earth elements necessary for widespread buildout would require federal re­regulation and, potentially, financing. The Treasury Department’s Exchange Stabilization Fund (ESF) mechanism could also be applied here to pull demand forward and lower hurdle rates for new rare earths projects.

Finally, placing the GOP’s full weight behind a nuclear transition could split the corporate governance thought universe, providing a spine upon which to build practical ESG criteria advanced as an alternative to Wall Street and Democratic Party–backed commitments to unreliable renewables and a “marginalist” approach to environmentalism. While the efforts of West Virginia State Treasurer Riley Moore’s coalition to pull red state funds from ESG-influenced institutions might check ESG overreach at the margin, the GOP might profit from having more than just a negative thesis on corporate governance. In fact, an alternative, positive framework favoring GOP-backed nuclear energy could be a vehicle for advancing other coalition agenda items, such as investment terms favoring family policy, labor regulation, and national security objectives (call it, say, “CSG” or Conservation and Security Governance). Further, in foreign affairs, such a framework could also generate an alternative to onerous IMF and World Bank ESG-laced loan terms for the developing world “swing states” at the center of competition with China.

National health security. Better protecting Americans from future pandemics (and driving down the cost of health care as the Medicare budget expands with Baby Boomer retirements) requires championing the model pioneered by the most successful U.S. government program of the twenty-first century: Operation Warp Speed (OWS).

As David Adler has pointed out in American Affairs, the success of OWS was predicated upon its effective use of two government contracting mechanisms: Other Transaction (OT) agreements, which permit greater speed and flexibility in finalizing government contract terms, and Emergency Use Authorizations (EUA), which trigger accelerated (but still rigorous) FDA evaluations to permit products to go to market while awaiting “full” FDA approval.⁸ Taking care to address well-founded concerns over these mechanisms’ abuse, the GOP would prioritize expanding these authorizations or adapting their structures for statutory reforms.

A GOP-led effort to reregulate pharmaceutical biotechnology test­ing and production on the OWS model is of high material interest to insurgent biotechnology and dissident tech circles within greater Silicon Valley, which might drive use cases for more speculative but potentially profitable industries like bioprinting, bio-brewing, and an expanded 3-D printing industry. Further, under the banner of national security, the GOP could play a policy role in solving the “scale-up” problem for reshoring generic pharmaceutical and pharma commodities manufacturers—large government contracts could justify new investments in domestic supply chains that venture capital, which is primarily interested in software products scaling at zero cost, declines to fund.

Relatedly and notably, Republicans have been unwilling or unable to replicate the successful Clinton Democrat courtship of ascendant 1990s industries for the contemporary moment. The GOP has overwhelmingly failed to cultivate a broad donor class within greater Silicon Valley. This seems like an overlooked opportunity, to put it mildly, as the group is much more variegated in its politics and attitudes than the hostile, monolithic caricature presently lodged in the Republican mind. That Peter Thiel remains so singularly prominent as a “defector” from this powerful socioeconomic group should strike GOP leaders as strategically unhealthy, especially as greater Silicon Valley enters into a period of economic and political transformation. Induced by the global crises of the past few years, especially the rise of a more hostile China, the political allegiances of this group might increasingly be up for grabs—as evidenced, for example, by the exodus trend from California to more business-friendly red states like Texas and Florida, tweets from venture capitalist Marc Andreessen (who once argued against Peter Thiel’s thesis on technological stagnation) favorably highlighting the theories of James Burnham, and the popular success of projects like the All-In Podcast, which features a quartet of prominent tech investors critically discussing American politics while positioning themselves as “centrists.” For the next GOP, a commitment to tech policy reform— which could certainly include antitrust action but should not be narrowly limited to it—might serve as a basis for facilitating substantive engagement with this patronage class.

Real Realignment

Presented separately, these policy proposals are likely to wither on their own vines. But pursued in combination, and perhaps championed by a future GOP presidential campaign, some version of this agenda might broadcast the required demand signal for enough molecules in corporate America to cease drifting, cloudlike above the country, and instead condense and fall back down to earth to pursue government-enabled profits in the real economy.

The specifics may shift as different fissures in the neoliberal model appear and recede over time, but the singular goal will always be clear. Turning the page on corporate nonalignment requires that one party first generate a corporate alignment: that oft-elided premise for the “realignment” so many correctly think necessary. Then, and only then, might new foundations for somewhat saner and more constructive po­litical cycles begin to reemerge.

This article originally appeared in American Affairs Volume VII, Number 1 (Spring 2023): 147–58.

Notes