Conservatives in Favor of Socialism?

So consider these developments:

–The Department of Defense has used $400 million of taxpayer money to buy shares of MP Materials, makers of rare earth magnets, making the federal government the company’s largest shareholder.

–The Trump administration approved the sale of U.S. Steel to the Japanese company Nippon Steel.  Reports the Wall Street Journal:  “The pact with the Trump administration includes an issuance of a so-called golden share to the U.S. government, giving it authority over the Pittsburgh-based steelmaker’s production and trade matters.”  Trump said that he had the Golden Share, giving him veto power over the company’s decisions.

–The Trump administration will now allow AI-chip makers Nvidia and Advanced Micro Devices to sell their products to China, as long as the U.S. government gets a 15% cut of the profits.

–In order to keep the manufacturing of computer chips in the U.S., the government is considering buying a stake in computer-chip-maker Intel.

–In his negotiations of trade deals, the president is requiring countries to invest money in the United States in order to score lower tariffs.  And he is the one telling the countries what they must invest in.  So far, according to the Wall Street Journal, President Trump is said to have raised $1.5 trillion in promised investment, which he will allot at his discretion.

What would you call this–the government buying ownership of private companies, taking a share of their profits, telling them how they must conduct their business, and telling investors where to put their money–if not socialism?

Actually, there is a better name for it.  “This isn’t socialism, in which the state owns the means of production,” explains the Wall Street Journal‘s Greg Ip. “It is more like state capitalism, a hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises.”

And yet, as Ip shows, this state capitalism is very similar to China’s “hybrid between socialism and capitalism,” though not nearly to the same degree, at least not yet.  The Golden Share is a tactic used by Communist China to keep control of the nation’s companies.

Ip’s article is entitled The U.S. Marches Toward State Capitalism With American Characteristics.  He comments,

China calls its hybrid “socialism with Chinese characteristics.” The U.S. hasn’t gone as far as China or even milder practitioners of state capitalism such as Russia, Brazil and, at times, France. So call this variant “state capitalism with American characteristics.” It is still a sea change from the free market ethos the U.S. once embodied.

It is true that European welfare states often practice this sort of thing.  So do Democrats.  Says Ips,

“Former President Joe Biden went further, seeking to shape the actual structure of industry. His Inflation Reduction Act authorized $400 billion in clean-energy loans. The Chips and Science Act earmarked $39 billion in subsidies for domestic semiconductor manufacturing. . . .Biden overrode U.S. Steel’s management and shareholders to block Nippon Steel’s takeover, though his staff saw no national-security risk.

The problem with state capitalism, says Ips, is that “the state can’t allocate capital more efficiently than private markets. Distortions, waste and cronyism typically follow.”  European and Latin American countries that practice this kind of system have much less economic growth than the United States has had with a free market system.  China has fared somewhat better, though its economy is now facing problems.  In the United States, says Ips, “Interventions made in the name of national security or kick-starting infant industries lead to boondoggles like Foxconn’s promised factory in Wisconsin or Tesla’s solar-panel factory in Buffalo, N.Y.”  Or just about every facet of  Joe Biden’s Inflation Reduction Act.

I suppose the New York conservatives who are going to vote for Mamdani just want to shake things up, as do President Trump and his supporters.  But I’m not sure how a marriage between big government and big business shakes things up.