Rural America is in crisis. One of America’s most provocative economists says the fix isn’t manufacturing—it’s something far less obvious

By Eva RoytburgFellow, News
Eva RoytburgFellow, News

    Eva is a fellow on Fortune's news desk.

    Bryan Caplan looks smilingly at the camera
    Bryan Caplan is an established member of anarcho-capitalist circles and a professor at George Mason University.
    Courtesy of Bryan Caplan

    Bryan Caplan doesn’t mince words: “Protectionists are just fools,” he said.

    But the first protectionist whom the economist, who runs a widely read blog, ever knew was his own father. At 87, Caplan’s dad still runs a used car parts business and remembers the 1950s as America’s golden age. 

    “Anger is his muse,” Caplan said, describing how his father spends hours listening to talk radio, furious at foreigners “for selling us stuff.”

    The elder Caplan’s nostalgia is familiar across the Rust Belt, where officials in President Donald Trump’s administration promise that tariffs and factories can revive lost prosperity. But the younger Caplan, one of the country’s most prominent libertarian economists, and also one of its loudest champions of housing deregulation, insists that’s the wrong lifeline. 

    The real path to millions of blue-collar jobs, he argues, is letting Americans build more homes. He thinks that housing deregulation is an “almost perfectly tailored fit” to address the plight of the non-college-educated male, a significant demographic in the Rust Belt states. 

    Caplan’s desire for freer housing markets isn’t necessarily surprising, given his background. He’s an established member of anarcho-capitalist circles that desire to see all regulation banished, pretty much everywhere in the economy. He’s written a massive master file on anarchism for George Mason University’s notoriously libertarian economics department, where he is a professor. 

    To be clear, he’s also penned many texts on tamer subjects, including a graphic novel on housing deregulation. Caplan is a champion of the YIMBY (Yes, in my backyard) movement, which argues that restrictive zoning rules, and local opposition with aesthetic concerns, are the main culprits behind stalled construction. Above all, the movement opposes the scourge of NIMBYism, where development gets stalled by a “Not in my backyard” attitude.


    YIMBYism has tended to cluster on the coasts, especially blue cities plagued by housing crises and chronic underbuilding over decades, but Caplan has thought (and written) a lot about what he calls the “lost middle,” the people who live in tent cities because they narrowly can’t afford the cheapest housing possible. He is unashamed to say that we should build cheaper, lower-quality housing for this middle, or that we should give them decaying housing.

    Recently, a cohort of well-known liberal politicos have jumped onto his bandwagon, making arguments for broad deregulation to achieve economic abundance. But Caplan’s been fighting the same fight as he has for years.

    Why construction fits, and manufacturing doesn’t 

    Factories, Caplan thinks, are a dead end. U.S. manufacturing output is near record highs, but employment has collapsed, he noted: not because of China, but because of machines.

    “Automation has made every manufacturing worker extremely productive, which means there just aren’t going to be a lot of jobs there,” he said. “It’s like agriculture; we can produce more food than ever, but we don’t need millions of farmers anymore.”

    Housing, by contrast, is bursting with “pent-up demand,” Caplan said. Millions of Americans want bigger, cheaper homes, but zoning laws, parking requirements, and minimum lot sizes keep supply limited. 

    Construction already employs more than 10 million people, 80% of them non-college-educated, 90% male, Caplan noted. With deregulation, the industry could double.

    “We could do everything national conservatives hope to do for America’s non-college males, but through building, not factories,” he said.

    Tariffs under Trump have created at best a few hundred thousand manufacturing jobs, Caplan said. Deregulation, on the other hand, could create millions. And unlike tariffs, which raise consumer costs and risk trade wars, housing abundance would lower the single biggest expense, by far, for most Americans: rent.

    That argument makes Caplan a contrarian not only to Trump, but to many conservatives who see protectionism as the answer to Rust Belt decline.

     “Politics is social,” Caplan sighed. “Even if protectionism is a bad bandwagon, everyone gets on it together.”

    Which regulations we should pull back 

    If Caplan could scrap just one housing rule, he said, it would be minimum lot size: the requirements in many suburbs that each home sit on an acre, or even five acres, of land.

    “Builders will always put as many houses as they’re allowed to. If you force them to space homes out on an acre each, obviously you’re going to build far fewer,” he said.

    By contrast, many older homes sit on a tenth of an acre or less, proof that larger lots are more of an artifact from previous regulations rather than a demand consumers have. 

    Next on Caplan’s deregulation list are bans on multifamily housing and strict height limits in cities. If land is valuable, people will naturally want to build apartments and townhomes, but currently builders are forced to leave land empty. 

    Parking minimums are the last policy, one which he admits is “incredibly popular.” In many cities, developers are required to build two or three spaces per apartment unit, even if renters don’t own cars, driving up the price of every individual unit. 

    Though these policies might seem like trite technicalities, to Caplan, they are the bottlenecks keeping millions of homes from being built, and non-college-educated men from finding work building them.

    Here, Caplan finds an odd bedfellow in his YIMBY coalition: popular liberal economics writer Matt Yglesias, who has criticized parking minimums ever since his days blogging for The Atlantic and the Center for American Progress. (That was long before Yglesias became one of the most successful Substackers going with Slow Boring, or even before he cofounded Vox with Ezra Klein.)

    However, there are other clear factors in the stickiness of housing inflation; namely, that the industry recovered extremely slowly from the crash of 2008. After the industry collapsed, small homebuilders died, and the rest of the industry’s titans consolidated, producing fewer homes but more profits than ever before.

    Housing demand

    Caplan acknowledges that it is precisely in rural areas where demand for housing is nonexistent. But he argues that rural Americans don’t need to live close to a skyscraper to secure a construction gig and benefit from deregulation. 

    Instead, they could commute to nearby growth hubs, places like Madison, Wis., or parts of Ohio and Pennsylvania where housing demand is strong.

    “Even if you live in a town that’s declining, you might drive 50 miles and be on a booming construction site,” Caplan said. “That’s already how construction works. The jobs are mobile.”

    He imagines a kind of cascade effect, where experienced workers would return to the industry as wages rose, while others could start in entry-level laborer roles. From there, the job site becomes the classroom, with workers teaching one another—the way that “most jobs work,” Caplan said.

    For those willing to relocate, deregulation could also ease the very barrier that makes migration costly: high rents in booming cities. Caplan envisions temporary worksite housing to solve that problem. 

    “It’s a chicken-and-egg problem,” he said. You can’t build more housing without workers, and you can’t get more workers without housing. Deregulation solves both.

    The result, he argues, would be millions of non-college-educated men doing work that feels tangible and high-status.

    “I think construction is even more emotionally satisfying for this ideal of manhood that a lot of people still have,” Caplan said. “You wake up, grab your tools, and build something outdoors—that feels higher-status than being stuck inside on an assembly line.”

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