Issue No. 3, Summer 2016

Enterprise Report Restoring Liberty, Opportunity, and Enterprise in America

Articulating the “Why” and “How” of AEI By AEI President Arthur Brooks

Every year, I have the opportunity to travel the country and speak with a wide variety of Americans. I meet with AEI supporters, state-based groups, local leaders in business and government, journalists, academics, policymakers, students, and con- cerned citizens from both sides of the political aisle. All these individuals’ ideologies and political opinions are as varied as their backgrounds. Indeed, as an abundance of research shows, America is dramatically more politically polarized today than in the past—a trend that spans citizens and leaders alike. These seemingly deep divisions can make bipartisan policy reform appear an impossible goal. But I believe that progress is possible. Achieving it won’t mean setting aside our core philosophies, but it will mean consciously choosing to focus on a core moral consensus built on two shared goals: human dignity and human potential. These twin pillars stand beneath AEI’s work. They constitute our “why.” Our mis- sion and our work promote human dignity and human potential through our belief in democratic capitalism and limited government; American strength and global leadership; and a pluralistic, entrepreneurial culture that insists on special care for people at the periphery. But—importantly—this shared moral vision does not neatly align with any party line or conven- tional political perspective. My colleagues and I are committed to making the intellectual, moral, and practical case for expanding personal freedom, increasing individual opportunity, and promoting free enterprise here in America and around the world—not scoring political points. AEI scholars engage in this pursuit with academic freedom and a passion for vibrant, heterodox debate. This is the “how” of AEI. Our scholars independently pursue innovative and unexpected ideas that fuel a robust competition of ideas, both inside our walls and out in the wider world. They are free to decide which questions to answer, how to answer them, and what their answers will be. The con- clusions they reach are driven by quantitative rigor and the best available evidence, not by prevailing fashions or partisan considerations. Arthur Brooks AEI President and We do not merely tolerate searching and self-critical examination—we welcome it, from allies and Beth and Ravenel Curry adversaries alike. We know that a competitive market in ideas is the only way to reach the fullness of Scholar in Free Enterprise truth and understanding. In the pages of this newsletter, you will see both the “why” and the “how” of AEI in action.

• AEI’s new Open Source Policy Center is encouraging transparency, collaboration, and a real competition of ideas through its open source economic simulation models.

• Under the direction of Michael Strain, AEI’s deputy director of economic policy studies, AEI has produced two important new edited volumes. One enlists some of our nation’s top political scientists to explore ques- tions of economic freedom and human flourishing; the other features prominent economists with varying views on key questions regarding the labor market.

• In April, AEI cosponsored a major event with the White House and New York University’s Brennan Center for Justice to discuss America’s criminal justice system. I had the opportunity to offer introductory remarks and discuss the moral and economic costs of large-scale incarceration—and opportunities for the left and right to collaborate on solutions.

• Within AEI’s own walls, three of our scholars have very different opinions on whether Britain should leave the European Union. AEI has produced a series of videos with John Bolton, Desmond Lachman, and Dalibor Rohac to articulate their diverse positions and help interested individuals on all sides understand the conse- quences of Britain’s upcoming decision.

• AEI greats Charles Murray and Nick Eberstadt both have new books coming out this summer. Charles has updated his bold idea, first laid out a decade ago, for giving all Americans the opportunity to build truly satis- fying lives. Nick’s book is a compilation of his most groundbreaking work over the span of his 30-year career.

• In this edition of Q&AEI, AEI’s Karlyn Bowman shares her take on this year’s presidential election and what the polls are telling us. She also sheds light on her major collaboration with demographers at the Center for American Progress and the Brookings Institution, which yielded interesting theories about what America’s demographic future implies for the political parties.

• And through AEI’s growing Academic Programs and Leadership Network, AEI is finding ways to work with groups, conservative and liberal, that care about advancing a robust, civil competition of ideas. We are collaborating with leaders from universities and states across the country, sharing our scholars’ bold ideas and principled solutions—and searching for common ground in the fight to defend human dignity and expand human potential.

When I share the “why” and “how” of AEI around Washington, many don’t believe me at first. It’s unique in this town to truly em- brace the competition of ideas, to offer scholars intellectual and academic freedom, and to genuinely see policies as mere means in advance of a better life for all people. Thank you for your interest—and your support. Only your generosity makes all of this possible.

Arthur Brooks Enduring Ideas by AEI Scholars AEI Sparks Revolution in Public Policy Modeling

In an effort to make policymaking administrative state.” The Washington at all levels of government more trans- Post also praised the OSPC, noting that W. H. Brady Scholar Charles Murray and parent, accountable, and collaborative, it is a much-needed addition to the Henry Wendt Scholar in Political Econ- AEI launched the first-of-its-kind opaque world of policy scoring. omy Nicholas Eberstadt both have new Open Source Policy Center (OSPC) In the coming months, Matt Jensen, books coming out this summer. on April 7. TaxBrain, the OSPC’s first the director of the OSPC, will provide Murray has updated his radical plan, project, allows journalists, policy- training workshops to journalists, first laid out a decade ago, to replace all makers, and the general public to policymakers, and political campaigns. of America’s income-transfer programs— simulate the effect of changes to tax Members of these groups have including Social Security, Medicare, policy using open source economic already expressed interest in the and all forms of welfare—and give every simulation models. The OSPC is a OSPC and even assisted in the American age 21 and older $10,000 a leading example of how AEI fosters a beta-testing process. year for life. Next month, AEI is releasing competition of ideas through rigorous, Former Chief Economist of the an updated edition of In Our Hands: innovative, and open research. House Ways and Means Committee A Plan to Replace the Welfare State, The OSPC has the potential to be and Resident Scholar Alex Brill has which reflects economic developments a revolutionary tool for policymakers. already demonstrated the useful- since Murray first described this plan. Currently, policymakers submit tax ness of the OSPC’s TaxBrain tool He has rewritten and added new and other policy plans for scoring to a by using it to analyze the tax and chapters, updated the data, and few organizations that wield proprietary economic consequences of various written a new introduction. and nontransparent models, which are approaches to middle-class tax relief. Murray’s goal is a society in which not subject to peer review or oversight. You can find his report here: everyone, including the unluckiest Their policy conclusions are often widely www.aei.org/publication among us, has the opportunity and reported in the media before under- /understanding-middle-class means to construct a satisfying life. going scrutiny from other experts. The -tax-cuts/. He argues that the welfare state OSPC seeks to change this dynamic by degrades the traditions of work, thrift, jump-starting an open source communi- and neighborliness, which then spawns ty that produces transparent economic social and economic problems that models to spur open debate about the society is powerless to solve. potential economic impacts and trade- Eberstadt will be releasing a offs of policy proposals. To learn more about the OSPC, visit special compilation of his most The OSPC has already received www.ospc.org. groundbreaking work that spans his positive attention from top news 30-year career. The volume includes outlets, including an endorsement a foreword from former AEI President from the Wall Street Journal’s editorial Christopher DeMuth and an afterword board. In an April 3 review, the from Arthur Brooks. Wall Street Journal called the OSPC To request copies of either book, “an essential step toward holding contact Spencer Moore at spencer. accountable the increasingly powerful [email protected] or 202.862.5835.

3 Economic Freedom and Human Flourishing Perspectives from Political Philosophy

Is economic liberty necessary for individuals to lead truly flour- “Rousseau on Economic Liberty and Human ishing lives? How should we think about the relationship be- Flourishing,” by John T. Scott tween economic liberty and human flourishing? In the forthcom- “ Adam Smith and Human Flourishing,” ing edited volume, Economic Freedom and Human Flourishing: by Ryan Patrick Hanley Perspectives from Political Philosophy, Michael Strain and fellow “Economic Liberty and Human Flourishing: Kant on AEI Scholar Stan Veuger commissioned nine essays from leading Society, Citizenship, and Redistributive Justice,” contemporary thinkers to explore these questions through the by Susan Meld Shell lens of some of history’s greatest philosophers. Through this unique volume, some of our nation’s top “Edmund Burke’s Economics of Flourishing,” political scientists grapple with higher-order questions that will by Yuval Levin help academics, students, local and state leaders, and policy- “Capitalism as a Road to Serfdom? Tocqueville makers develop a deeper understanding of these issues and a on Economic Liberty and Human Flourishing,” more theoretical underpinning of their policy positions. by Steven Bilakovics The volume’s chapters and authors are as follows: “John Stuart Mill on Economic Liberty and “Economics and the Flourishing Life,” Human Flourishing,” by Richard Boyd by Harvey C. Mansfield “Economic Liberty as Anti-Flourishing: Marx and Espe- “Hobbes, Locke, and the Problems of Political cially His Followers,” by Deirdre Nansen McCloskey Economy,” by Peter Josephson

Prominent Economists Address Key Labor Market Issues

In the forthcoming edited volume from AEI’s Michael Strain, 21 of our nation’s top economists from several universities and • How can we make work pay? public policy research organizations address nine key questions (Justin Wolfers; Glenn Hubbard) on labor market issues about which prominent economists • Do implicit marginal income tax rates from safety- often disagree. net programs significantly diminish labor supply? In a true competition of ideas, each issue is addressed (Casey Mulligan; Robert Moffitt) by economists with different but well-supported opinions, • Should we be concerned about the state of econom- elevating the public policy debate. AEI will host policy forums ic mobility? (Miles Corak; Bhash Mazumder) in the months ahead that focus on each of the issues addressed • How can we build workers’ skills? in the volume: (Harry Holzer; Peter Cappelli)

• Would cutting the corporate tax rate significantly • Is productivity the most important determinant of increase jobs in the US? (Marty Feldstein; Betsy compensation? (Dean Baker; Robert Lawrence) Stevenson and Jason Furman) • Should we be concerned about income inequality? • What should we do about those Americans who (Larry Summers; Tyler Cowen) are especially hard to employ? (Tim Smeeding; • What are the economic effects of lesser-skilled Richard Burkhauser and Mary Daly) immigration on lesser-skilled native workers? (George Borjas; Madeline Zavodny and Pia Orrenius)

If you would like copies of either of these volumes, please contact Spencer Moore at [email protected] or 202.862.5835.

4 Criminal Justice Reform AEI Cosponsors Summit with the White House

On April 25, AEI partnered with the and formally incarcerated. The Doe Fund White House and New York University’s helps them put their lives back together Brennan Center for Justice to discuss by helping them understand that our so- America’s criminal justice system and ciety needs them and needs their work. the economic effects of our inefficient While Arthur was visiting the system. The event brought together Doe Fund, a man named Richard senior administration officials, scholars, showed him an email from his boss that journalists, business leaders, and econ- read, “Emergency bed bug job on omists to highlight a forthcoming report criminal justice system is a proxy for E 66th Street. I need you now.” As he by the Council of Economic Advisers something much deeper—building a explained to Arthur, this email was the on the economic consequences of the system that more effectively serves both first time in Richard’s life that anyone had criminal justice system. The conversation the human dignity and human potential told him he was needed. allowed AEI to present the conservative of vulnerable people. In the year ahead, you will see case for criminal justice reform, advocat- AEI scholars are working with some much more from AEI on criminal justice ing for work, education, and personal of the best nonprofits in the country reform and how good policies can responsibility as the underpinnings of to learn how to better integrate the emerge from a moral consensus any reform effort. most vulnerable and marginalized dedicated to lifting up all members As Arthur Brooks pointed out in his citizens back into civil society. One of our society. To watch Arthur’s remarks remarks, beyond the enormous material example is the Doe Fund, an organi- at the White House event, visit price our society pays for this human zation based in New York City that www.aei.org/press/the-economic capital tragedy are the moral costs. works with men who are homeless, -consequences-of-criminal-justice- The economic case for reforming our not working, addicted to substances, brooks-speaks-at-white-house/. Brexit AEI Scholars Weigh In with Divergent Views

referendum and the ramifications for the Europe and spur a global economic United States. crisis. From a political viewpoint, In a series of “In 60 Seconds” videos Britain’s exit would fan the flames of on AEI’s YouTube channel, AEI scholars the populist movements across Europe explain their views. Bolton attests that and would further fracture the EU. the United Kingdom should vote “leave,” Rohac attests that Britain’s exit so as to assert its sovereignty from would not be a political or economic increasingly powerful EU bureaucrats disaster for the UK, but he also On June 23, Britain will vote on whether and diplomats in Brussels who have believes that leaving would not solve to leave the European Union (EU) marginalized the British parliament. the problems that some associate in a national referendum. Debate Lachman explains that a British with EU membership. He agrees about the merits of remaining in the exit from the EU is the last thing that with Lachman, however, that a bloc membership or exiting the union Britain needs from both a political and Brexit would strengthen the centrifugal has divided Britons, as well as AEI economic point of view. Europe is still populist forces all over Europe that scholars. John Bolton, Desmond recovering from the great economic are already undermining the EU’s unity. Lachman, and Dalibor Rohac each recession, and Britain’s exit would To view the videos, visit have a different opinion on the renew the sovereign debt crisis in www.aei.org/tag/brexit.

5 Clinton against Donald Trump, he has beaten her in only five. Eighteen states Q&AEI with Karlyn Bowman and the District of Columbia have voted Democratic in each of the past six elec- tions, making up 242 of the 270 electoral Karlyn Bowman is a senior fellow and research coor- votes needed for victory. Trump claims dinator at AEI, where she studies public opinion and he could flip some of those blue states demographic change. She joined the institute in 1979 with large numbers of electoral votes, and was managing editor of AEI’s magazine Public including New York. We shall see. Opinion and the first editor of the American Enterprise. She helped launch AEI’s popular Election Watch Series How will Donald Trump affect in 1982, now the longest-running election analysis down-ballot contests? program in Washington, and inaugurated a series of AEI Public Opinion Studies in 2002. She also pub- Republicans in the Senate are more lishes AEI’s monthly polling newsletter, Political Report. vulnerable than Democrats because they Bowman has often lectured on the role of think tanks in the United States and writes have 24 seats up against the Democrats’ a weekly column for Forbes. 10. Already some vulnerable GOP senators have announced they won’t What has surprised you the most about perhaps causing problems for Hillary. attend the Republican National Conven- this US presidential primary season? But the divisions on the Republican side tion to insulate themselves from the man are also deep. With Trump the presump- at the top of the ticket. Democrats could Going into this election, we knew that tive nominee at this writing, some Repub- retake the Senate. It is harder to imagine many Americans were deeply dissatisfied licans appear ready to bolt the party or that they could pick up the 30 seats with the way things were going in the stay home in November. How the party they need to regain control of the House. country, but the intensity of their feelings comes together is unclear now. Filing deadlines have passed in more surprised many. Much of the dissatisfac- than 350 districts, limiting Democrats’ tion stemmed from the 2008 financial What issues or messages are resonat- opportunity to recruit talented challeng- crisis and recession. Dysfunction in ing most with voters this election cycle? ers to Republican candidates. The Washington also emerged as a top GOP should retain the majority of public concern. These attitudes pro- The economy, the economy, the governorships. duced support for outsider candidates economy. It tops the issues people are such as Donald Trump and Bernie Sand- concerned about in almost every national What does America’s demographic ers. I think many Republicans expected poll, followed usually by terrorism and future portend for the nation’s political someone from their impressive roster health care. The nature of economic parties and politics? of senators and governors to be the concerns this year is different from The major demographic changes we nominee, but the mood and the non- previous election years as a result of have seen recently favor Democrats. stop media coverage and media eleva- the 2008 financial crisis and recession. Minorities will make up a larger share of tion of Trump hurt officeholders. Although some recent surveys show the electorate going forward, possibly hints of optimism and economic im- 30 percent in 2016, and they have been Based on your polling analysis, how provement, most Americans don’t feel voting heavily Democratic in recent elec- deep are intraparty divisions in the it yet and aren’t confident their children tions. Whites have declined as a share Republican and Democratic parties? will do better than they have done. Peo- of the electorate by about 2 percentage ple have little confidence in either party Both parties have divisions right now, points in each recent four-year cycle. to address problems and thus, and only time will tell whether they will Also important to what the Democrats their support for outsiders. be healed before the general election. call the “The Rising American Electorate” People voting in Democratic contests this Could Donald Trump scramble the are Democratic-leaning young people year have been more liberal than voters in electoral map? and single women (many of whom are Democratic contests in 2008, propelling young). Republicans need to do bet- Bernie Sanders’ candidacy forward. He Polls have greater predictive value as we ter among minorities to improve their has a war chest and passionate followers. get closer to Election Day. That said, in chances of winning national elections in He will advocate very liberal positions, the last 50 national polls pitting Hillary the future.

6 Academic Programs by the Numbers AEI Hosting Top Students June 2015–May 2016 for Summer Program 5,000 students are participating in the Student In a time of increasing intolerance and per class, participants have plenty Network, an increase of hostility to an open competition of ideas of opportunity to interact closely 26 percent from the previous on college campuses, AEI’s Academic with scholars. academic year. Programs team is hosting 150 top college In addition to in-depth study on students from around the country for our their chosen topic, students share 85 campuses have Executive sixth annual Summer Honors Program. meals with leaders from inside and Council members. The program, which runs between outside AEI, including Danielle Pletka, May 30 and June 24, is a fully funded Ambassador Norm Eisen, Stan Vueger, opportunity for students to immerse and Norm Ornstein. They are also going 332 students participated themselves in a chosen public policy on site visits to the Washington, DC, in Executive Councils, an issue with AEI scholars and other leading offices of Facebook and Uber and increase of 22 percent from the previous academic year. practitioners, for an unparalleled mix of attending a resume workshop with high-level academic instruction on free AEI’s human resources staff. enterprise principles, policy analysis, Past Summer Honors Programs 234 events were organized and practical experience. With more have received overwhelmingly positive by Executive Councils. than 400 applicants, among those feedback from both the participating accepted are students from Harvard students and their instructors. After College, Yale University, Princeton seeing the results of an assignment he faculty participated 391 University, Claremont McKenna, gave to his seminar students, AEI Scholar in the Faculty Network, an increase of 26 percent from Stanford University, and Notre Dame. Nicholas Eberstadt remarked, “To the the previous academic year. This year, the program is offering best of my knowledge, no tenured six different week-long sessions includ- economist or think tanker or government ing “War and Decision Making” led by official has ever discovered what our 18,847 students attended Fred Kagan, “The Building Blocks of students are discovering right now events organized or supported Human Flourishing” taught by Charles about the dimensions of this problem.” by AEI Academic Programs. Murray, and “Democratic Capitalism, To learn more about the Summer Principles, and Practices” with Michael Honors Program, visit www.aei.org/ Strain. With only 20–30 students summer-honors/.

Student Leaders Gather at Princeton

In early April, AEI held a policy summit Auslin and Michael Rubin on flawed the Academic Programs staff to say, “The bringing 80 Executive Council members assumptions in US foreign policy. speakers were incredibly engaging, and (groups of up to six students who coor- AEI Academic Programs staff also the opportunity to meet with fellow stu- dinate AEI outreach on their campuses) trained students on how to act as dents and also to see more of the work from across the East Coast to Princeton effective ambassadors and student you do at AEI was so exciting. It was University for two days of policy lectures, organizers for the free enterprise definitely a highlight of the semester!” high-level networking, and leadership message on their campuses. In the next academic year, Academic training. Topics and speakers included This summit enabled Executive Programs will hold two policy summits, AEI Scholar Robert Doar on what actually Council leaders to interact directly one on the West Coast and another on works in helping the poor, Princeton’s with AEI scholars and meet their the East Coast, offering Executive Coun- Robert George on academic freedom counterparts from other colleges in the cil members a chance to connect with on college campuses, and AEI’s Michael region. One student wrote a member of scholars and peers in their region.

7 AEI Hosts Leadership Network Summit

“[AEI is] the epicenter of thought-provoking leadership and is exactly what our country needs if we are going to realize our full potential.” —ALN Summit Spring 2016 participant

Spring 2016 AEI Leadership Network Summit participants.

In late April, AEI hosted more than evening sessions included Charles people who need it the most than I have 80 leaders for our spring 2016 AEI Lead- Murray on the fraying of America’s ever had in my entire career.” ership Network Summit. The Leadership social fabric, Jonah Goldberg on the Arthur Brooks led two sessions for Network is an exclusive program that 2016 political environment, and former Leadership Network members, one on reaches leaders from across the country US House Speaker Newt Gingrich on free enterprise and living a life of moral representing nonprofit and community transformational leadership. purpose and one on communicating organizations, business, and state and During the course of the event, more effectively. Following the presenta- local government. To date, more than participants heard from AEI’s Maura tion on effective communication, partic- 200 distinguished leaders are part of Corrigan, Kevin Corinth, Robert Doar, ipants were challenged to demonstrate this network. Rick Hess, Andrew Kelly, Gerard Robin- their skills in an interactive “elevator pitch” Taking place April 27–30, the summit son, Katharine Stevens, Michael Strain, competition, convincing the audience of convened a personally, professionally, and Stan Veuger. They also heard from their point of view in under 60 seconds. and ideologically diverse group of Grant Collins, who serves as senior leaders for an honest and open discussion vice president of Fedcap’s $73 million If you would like more information about on increasing opportunity by focusing on workforce development practice getting involved with this exclusive poverty alleviation, education reform, and area. One participant in a recent AEI network, or if you would like to a strengthened free enterprise system. Leadership Network Summit said this recommend a possible member, please A wide array of AEI scholars delivered about the experience: “I have had more contact [email protected]. presentations and hosted breakout conversations since the summit about discussions. Speakers at the main free enterprise as a way to lift up the

Save the Date AEI Annual Dinner 1150 Seventeenth Street, NW Washington DC 20036 Please save the date for AEI’s Annual Dinner on September 28, 2016, at the 202.862.5800 | aei.org National Building Museum in Washington, DC. Further details are forthcoming.

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