When The Market Bows To Power Trumps
There was a time when the American state drew a sharp line between public authority and private enterprise. Government regulated, taxed, and occasionally subsidized—but it did not own. That distinction, once fundamental to both capitalism and democracy, is vanishing before our eyes.
Under the Trump administration, the United States is witnessing the emergence of a hybrid economic system: part state capitalism, part personal fiefdom, part political protection racket. Companies that depend on federal contracts, regulation, or industrial incentives are finding that their continued independence now carries a price—and the bill is being paid not just in taxes or compliance, but in ownership itself.
This is not capitalism. It is not even socialism. It is a new kind of coercive corporatism in which the instruments of the state are used to compel companies to cede value, control, or loyalty..
From Industrial Policy to State Capture
In principle, governments can and should use economic policy to strengthen national capacity, prosperity, and the country’s well-being. Faith in and support for free market principles has been a long-standing Republican Party tenet. Remember Ronald Reagan’s determination to free companies from excessive regulation to enable entrepreneurism to flourish and America to grow?
In practice, the Trump administration’s industrial policies have moved from deregulation and fostering growth to become vehicles for state-ownership and control. The clearest signal came in August 2025, when the White House announced that the United States would take a 10 percent equity stake in Intel, converting nearly $9 billion in CHIPS Act funding into shares of the company itself.
President Trump celebrated the move as “America owning part of its future.” But Intel’s filings told a different story: one of dilution, political exposure, and direct state influence. It was a moment without precedent in modern U.S. history—the government becoming a shareholder not through crisis rescue, as in 2008, but through presidential will. The deal blurred the line between public subsidy and private ownership, signaling that cooperation with federal policy was no longer voluntary—it was compulsory.
A few months later came U.S. Steel. When Japan’s Nippon Steel sought to acquire the storied American company, the Trump administration intervened. The deal was permitted only after the government secured a “golden share”—a special class of equity granting veto rights, board appointments, and control over major corporate decisions. In any other era, this would have been described plainly: nationalization in all but name.
The pattern extends beyond marquee names. Through the Defense Production Act and other emergency authorities, the administration has acquired minority stakes in firms mining or refining lithium, cobalt, and rare earths. The justification—strategic supply chains—masks a deeper shift: the bald-faced state intervention in the private sector. Rather than following free market principles, it seems Trump is moving towards socialist government involvement in the economy, or perhaps to something further. In any case, each transaction chips away at a core democratic assumption—that capital and coercive power should not share the same hand.
Coercion Behind the Curtain
These developments would be troubling even if purely designed to boost government control over certain industries, i.e., along the line of socialist policies followed in a number of countries in the last century. But they are not. Many of these deals are shadowed by reports of political coercion—companies pressured to sell, partner, or “invite investment” from Trump allies under threat of investigation or exclusion from contracts.
The same government that declassifies intelligence for partisan ends, that directs prosecutors toward political enemies, and that treats oversight as disloyalty, now wields economic power in the same fashion. What emerges is not a market economy but a marketplace of obedience.
Some corporations appear to have capitulated directly to the president’s circle—ceding value or governance influence to entities aligned with Trump or his family. Others, like U.S. Steel or Intel, have found themselves negotiating not with regulators, but with the White House itself. The message is unmistakable: in Trump’s America, prosperity is contingent on allegiance.
A Familiar Pattern in Authoritarian Economics
Students of political economy will recognize this pattern. It is not communism, which at least nationalizes openly, claiming ownership in the name of the people. Nor is it traditional capitalism, in which competition disciplines both markets and power. It is closer to what history records as National Socialism’s corporatism—private property in form, state domination in fact.
Under Mussolini, the Italian state compelled industries to form “syndicates” serving national objectives. Under Hitler, German firms retained their names and profits but lost their autonomy. Private ownership survived only as an instrument of political loyalty.
The same logic animates today’s version of “America First industrial policy.” The rhetoric is nationalist; the mechanism is coercive. The result is a dependent private sector, existing at the pleasure of the state and its ruler.
The Consequences of a Captured Market
The economic costs are real:
Markets become distorted, inefficient. Productivity, efficiency, and profits suffer.
Fears of political retribution enter into boardroom decisions.
Regulatory integrity erodes when policy becomes transactional.
Innovation falters as loyalty supplants merit.
And rule of law collapses when government officials can use the threat of prosecution to favor competitors to demand equity.
Look back to the collapse of the communist regimes in Central and Eastern Europe. Ending state-ownership and embracing free market capitalism was seen as integral to realizing the vision of Poles, Czechs and others for a prosperous democratic future. Economic independence is a source of oxygen for democracy and freedom. When private actors cannot refuse the state—when capital bends before power—the foundations of liberty crack.
The Warning We Issued
In The Steady State’s 2025 Assessment of Democratic Institutions, we identified this merger of political and economic coercion as one of the “indicators” of authoritarian consolidation. It is now visible in plain sight. The Intelligence and Warning Working Group’s letter to Congress urged legislators to act before industrial policy became a mechanism of capture rather than competition.
That moment has arrived. What began as subsidy has become subordination. The private sector is no longer a counterweight to the state; it is being absorbed by it.
Conclusion: Ownership as Obedience
The theater of power once played out in golden ballrooms and marble bathrooms. Now it is measured in stock certificates and board seats. The Trump administration’s forced equity deals mark not a revival of American industry but its conscription.
Every regime of control begins by claiming it is protecting the nation’s strength. But when the market bows to power instead of being the engine of growth, innovation, and prosperity it should be, there are consequences beyond stagnation and lower living standards. The economy can falter, become an avenue for corruption and patronage, another tool for a despot to employ.
The question now is not whether this is capitalism or socialism. It’s whether it is still America.
Steven A. Cash served as a former prosecutor in the Manhattan District Attorney’s office before joining the CIA in 1994 as Assistant General counsel and subsequently serving as an intelligence officer in the Directorate of Operations. In 2001 he joined the Senate Select committee on Intelligence as Counsel and designee-staffer to Senator Diane Feinstein). He later served as a senior staffer in the House Select Committee on Homeland Security, the Department of Energy, the Senate Judiciary Subcommittee on Terrorism, Technology and Homeland Security and the Department of Energy. In the private sector he has advised on national security, counterintelligence, and technology policy and served on the Biological Sciences Experts Group under the Director of National Intelligence. Mr. Cash is currently the Executive Director of The Steady State.
Founded in 2016, The Steady State is a nonprofit 501(c)(4) organization of more than 360 former senior national security professionals. Our membership includes former officials from the CIA, FBI, Department of State, Department of Defense and Department of Homeland Security. Drawing on deep expertise across national security disciplines including intelligence, diplomacy, military affairs and law, we advocate for constitutional democracy, the rule of law and the preservation of America’s national security institutions.