In times of uncertainty, the pressure to “do something” is real. But too often, that instinct leads policymakers to turn to government intervention that risks undermining the very system that has driven American prosperity.
From housing to health care, policymakers are increasingly turning to centralized solutions that replace political judgment with market forces. Conservatives have long understood the risk: government intervention shifts decision-making from markets to bureaucrats, discouraging investment and ultimately leaving consumers worse off.
Take housing. The Senate recently passed legislation that would restrict institutional investment in single-family rental housing. The goal is to improve affordability, but economists project that this policy would reduce new construction by tens of thousands of homes annually — raising rents and limiting options for the working families it aims to help. We can’t solve supply shortages by restricting supply.
Or consider proposals to import foreign price controls on prescription drugs. Europe and Japan once led the world in pharmaceutical innovation. That’s not the reality today, in large part because price controls reduced the incentive to invest in new treatments.
There’s no reason to believe that adopting similar policies in the United States would produce a different outcome. In fact, economists estimate such policies could cut research investment nearly in half, delaying or preventing the development of hundreds of new medicines over the next decade, meaning fewer treatments for patients who depend on them.
The same impulse toward central control is now shaping proposals to seize pharmaceutical patents and licensing royalties that universities receive from commercializing federally funded research breakthroughs. Today, universities can license their discoveries to private companies, which then invest in further R&D to bring those innovations to market.
That wasn’t always the case. Before the Bayh-Dole Act, Washington bureaucrats controlled the licensing of federally funded research — and did a lousy job, commercializing just 5% of the 28,000 patents they held. By giving universities the authority and incentive to commercialize discoveries, the law helped launch thousands of startups and fueled a wave of American innovation. Re-centralizing that authority would reverse this progress and leave promising technologies stuck in labs — benefiting our adversaries in the process.
Even more concerning is the growing willingness to blur the line between government and private enterprise. Recent moves toward government equity stakes and expanded control over corporate decision-making risks transforming dynamic, market-driven companies into state-run enterprises — the kind we see in China.
To be clear, the goals behind these policies — lowering costs, protecting taxpayers, and strengthening American industry — are legitimate. But we won’t beat China by becoming China. And Republicans shouldn’t respond to bad policy by tinkering around the edges and calling it a fix. That approach, however well-intentioned, hands Democrats a blueprint they will expand the moment they return to power. Turning away from free-market principles in favor of government-directed outcomes is not a sustainable strategy.
If we want to lower costs, we should focus on removing the barriers that prevent markets from working — whether it’s restrictive zoning laws that limit housing supply or inefficiencies in the drug supply chain that drive up prices. If we want to strengthen American industry, we should reduce regulatory burdens and provide the certainty businesses need to invest and grow.
At its best, government sets fair rules, promotes competition, and then gets out of the way. That model built the strongest economy in the world — and abandoning it now would be a mistake we can’t afford.
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