Washington Monthly - The Secret to Reindustrializing America Is Not Tax Cuts and Tariffs. It’s Regulated Competition.
The Washington Monthly published a timely new cover story on June 2, 2025, by Phillip Longman, policy director at the Open Markets Institute and senior editor at The Monthly, titled “The Secret to Reindustrializing America Is Not Tax Cuts and Tariffs. It’s Regulated Competition.” In the piece, Longman challenges the dominant political narratives about how to rebuild America's industrial strength, arguing that both Republican and Democratic strategies miss a crucial, historically-proven ingredient: market-shaping regulation.
As the U.S. confronts the urgent need to revive domestic manufacturing, political leaders have largely converged on a limited set of tools—tariffs, tax incentives, and public subsidies. Longman’s deeply researched essay argues that these are insufficient on their own. Drawing on economic history and fresh policy analysis, he asserts that America’s 20th-century rise as a capitalist superpower was powered not by deregulated free markets, but by a robust system of regulated competition—a set of rules that structured industries to ensure innovation, investment, and broad access to economic opportunity.
“This isn’t about rolling back the clock,” Longman writes. “It’s about understanding that our most successful economic era was governed by a uniquely American system of industrial governance—one that can and should be adapted for the 21st century.”
In his editor’s note, Paul Glastris writes of Longman’s article:
What Democrats need is a vision for reviving the American dream that is more convincing than Trump’s, but more robust and understandable than Biden’s. In this issue...Longman offers one: regulated competition...it was precisely the system that built the United States into a capitalist superpower while delivering broad-based prosperity. It did so, Longman explains, by catalyzing a virtuous cycle of innovation.
Longman spotlights the historic success of regulated competition in sectors like aviation, where federal rules created the conditions for explosive technological innovation, widespread air service, and thriving aircraft manufacturing. Longman traces how the Civil Aeronautics Act of 1938, far from stifling the airline industry, actually rescued it from chaos and collapse by fostering sustainable competition, ensuring public service, and channeling investment into innovation.
Through notable historical examples, Longman shows how similar regulatory frameworks supported America’s dominance in railroads, energy, shipping, and telecommunications—and how their abandonment starting in the 1970s contributed to economic decline, regional inequality, and oligarchic power.
With reindustrialization now a rare point of bipartisan focus, Longman’s article is an essential contribution to the national debate as he calls on policymakers to revisit and reimagine a tradition of democratic market design that once made America the envy of the industrialized world.
Phillip Longman is the policy director of the Open Markets Institute. He is the author of numerous books on public policy, including Best Care Anywhere, currently in its third edition, which chronicles the quality transformation of the Veterans Health Administration in the 1990s and applies its lessons for reforming the U.S. health care system as a whole.
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