Make American Companies American Again

Corporate interests were once aligned with national interests—and should be once more.

In 1953, President Eisenhower nominated the president of General Motors, Charles E. Wilson, to serve as Secretary of Defense. The move was notable not only because Wilson was one of the first and only CEOs to be nominated to a U.S. cabinet position, but also because of the significance of his company’s role in American society at the time. GM was arguably the most influential company in the country, producing half of all vehicles sold in the United States (all of them with primarily domestic content) and employing over half a million people (nearly one out of every 110 working Americans). GM had also been a vital supplier for the Allies during World War II and a major technological innovator. In 1955, it ranked number one on Fortune’s first-ever 500 List.

During his confirmation hearing, Wilson faced concerns about potential conflicts of interest. When asked if he could remain faithful to the national interest if a decision might harm GM, Wilson made a statement that would be widely (and inaccurately) quoted for decades: “What’s good for GM is good for America.” Given GM’s support of the war effort and significant contributions to American production, innovation, and employment, a reasonable case might have been made for this version of the statement at that time. But Wilson’s comments sparked controversy nonetheless, and he was compelled to sell his GM stock in order to secure his Senate confirmation.

To Wilson’s credit, his actual statement was more nuanced: “…for years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country. Our contribution to the nation is quite considerable.” His statement started with the inverse sentiment; that what’s good for America is good for GM, and ultimately recognized reciprocal interests between the nation and its companies.

The problem with the misquoted version of his comment is that it sets GM’s interests first, implying the country’s interests were contingent upon those of its top corporation. Unfortunately, many economists and business leaders implicitly adopt this sentiment. For them, what is allegedly good for the nation, its workers, and its communities does naturally follow from what is good for its major corporations and their shareholders. Such a theory was doubtful even in Wilson’s time, but today, under globalized market conditions favoring extraction and cost savings over production and investment, it is especially dubious. Corporations, which are now multinational, routinely shift operations overseas and profits to tax havens while prioritizing short-term gains through stock buybacks rather than long-term investments in infrastructure and human capital. Where GM stood poised 85 years ago to support American war efforts, today’s hottest U.S. company, Nvidia, insists on selling its advanced semiconductors with potential military applications to China, even as it struggles to meet demand for U.S. customers.

These changes in corporate strategy were not inevitable and do not have to be permanent. They were the result of deliberate policy choices made by both major political parties over several decades. After the 1950s, domestic economic policy began to favor financial deregulation, shareholder primacy, and weaker labor protections. Internationally, the United States entered trade agreements with little regard for domestic industry or middle-class jobs. Antitrust enforcement waned, investment plummeted, the tax code allowed profits to bleed offshore, and financial markets began to overshadow the real economy. In short, the United States saw a corporate erosion of capitalism.

The Public Purpose of Corporations

At the time of the American Founding, the economic influence of corporations was far more limited. As Department of Labor solicitor Jonathan Berry has pointed out, corporations were initially recognized as special entities designed to serve a limited public purpose that individuals were ill-equipped to manage on their own, such as building public infrastructure or managing ports. These purposes were laid out in each corporation’s charter, which was established on the state level and could be revoked if a corporation strayed from its terms or violated public trust. To carry out such purposes, corporations were granted novel legal rights such as “corpus habere” and limited liability, which established corporations’ personhood as distinct from their owners and then ensured those owners could not be held responsible for the corporation’s debts or legal settlements.

While government continues to confer expanded rights to corporations, including legal personhood and limited liability, it now demands no explicit public benefit in return. Modern U.S. corporations face virtually no limitations on their purpose, scope, accountability, or the borders they operate within (domestic or foreign). Many now even serve banking functions. Their central mission, often legally codified, is to maximize returns for shareholders even if those shareholders are increasingly foreign-based. The public interest is understood to be the sole concern of government, while corporations, despite their limited liability, size, and other privileges over individuals, are expected to operate solely based on private interests.

The U.S. is unlikely to return to an economy of smaller, limited-purpose firms anytime soon, but it is important to understand that American capitalism today looks very different from that of the Founders and even that of the 1950s. While this may be harder to sense in a city like Washington, D.C., average Americans still intuitively recognize the difference. And while Americans still rightly celebrate entrepreneurship and the contributions of small, local businesses to their communities, there is a vast difference in public trust between “small business” and “big business.” According to Gallup, 70% of Americans express a “great deal” or “quite a lot” of confidence in small businesses, but only 15% say the same about big business.

That striking 55-point gap implies a clear preference for business that is local, tangible, and accountable to the community over opaque multinational corporations with offshore factories, tax shelters in Ireland, and workforces composed of contractors, immigrant visas, and digital algorithms. These instincts are not anti-capitalist; they are pro-American and reflect a continued desire to reward companies for growing the country alongside profits.

New Metrics for “American” Corporations

GM once embodied the kind of firm Americans could reasonably call “American.” Beyond just the size of its headcount, the company’s research and development led to innovations like the electric starter, the automatic transmission, and the catalytic converter. GM’s taxes and investments supported U.S. national defense, infrastructure, and public education. While many corporations may still be headquartered in the United States, few provide public benefits on the same scale. Now, acute supply chain vulnerabilities and the erosion of middle-class jobs have generated sufficient political pressure to reevaluate economic incentive structures. As policymakers reconsider corporations’ relationship to the national interest, they should gauge the following metrics before deferring to corporate concerns:

• Employment: How many American citizens does the company employ? What percentage of its total workforce are U.S. citizens and what percentage are U.S.-based? How many are employed full time and with benefits? How many of those jobs meet American Compass’s “secure jobs” criteria, by paying at least $40,000 annually, including health insurance and paid time off, and offering predictable earnings and a regular or controllable schedule?

• Production: How much of the company’s output is produced in the United States? How much is outsourced to subsidiaries or suppliers abroad? What is the ratio of the company’s domestic to foreign operating expenditures?

• Investment: What share of its profits go toward R&D, capital investment, and workforce development? How much goes toward executive compensation, dividends, and stock buybacks? How much does it spend on lobbying and political activity?

• Taxation: How much in U.S. federal taxes does the company actually pay? Where does the company claim profits from its intellectual property (IP) rents, especially if the research supporting that IP was funded by government or exempted from taxes? How much does the company hold in offshore accounts?

• Ownership: Who owns the company? What share of the company is foreign owned, including foreign ownership through institutional investors?

Perhaps these metrics could be officially tracked and posted on a public profile of all firms chartered in the United States. If companies are keen on marketing their environmental and social commitments, should they not be just as intent on promoting their domestic workforce composition, domestic investments, and tax payments to win the business of patriotic consumers? Furthermore, if charters were envisioned to serve public purposes and still confer public advantages, is it not reasonable to expect greater public transparency?

Adjusting the Landscape

To be clear, the goal is not to attack or punish corporations for doing what the current system encourages—though there are plenty of cases where companies act decisively against the national interest in ways that should in fact be criminal. Nor is it to soak corporations and redistribute their profits while maintaining the failed status quo. The goal is to change expectations and to relink corporate success to national success.

Policymakers are the ones who designed a system in which short-term profit-seeking is rewarded, even when it undermines national strength by diminishing U.S. industry, jobs, and investment. While government’s role should indeed be limited, it is ultimately responsible for setting the rules and conditions under which markets operate, and for enforcing those rules equally once they are set. By setting and enforcing the right ground rules, lawmakers can reward companies that want to be “American”—through hiring, building, and investing in America—while making it disadvantageous for companies to sell out.

U.S. leaders can no longer allow economic policy to run on autopilot while multinational corporate interests steer the plane. Nor can they continue to confuse corporate profits or stock market gains with national prosperity. Instead, economic policy should be guided by a paradigm that aligns the interests of American businesses with the American people, incentivizing greater domestic investment, production, and quality job creation. In the long run, this will put the nation and its companies on a path to greater and more sustainable growth.

During his confirmation hearing, Charles Wilson argued that the interests of his company and his country were largely mutual. That belief was more defensible for a company like General Motors in the 1950s than for most companies today, but under the right market conditions it can be restored. Our leaders can start by pursuing and internalizing answers to the questions raised above. Doing so would help restore the original, more grounded emphasis of Wilson’s statement: that what is good for America is good for its corporations—not the reverse.