The differences and intentions are obvious, but under both dems and repubs, the federal government has actively engaged in economic affairs through strategic subsidies, ownership stakes, and executive directives moving our economy more towards China "state capitalism."
A generation ago conventional wisdom held that as China liberalized, its economy would come to resemble Americaâs. Instead, capitalism in America is starting to look like China.
The federal government has often waded into the corporate world. It commandeered production during World War II and, under the Defense Production Act, emergencies such as the Covid-19 pandemic. It bailed out banks and car companies during the 2007-09 financial crisis. Those, however, were temporary expedients.
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. Of that, $8.5 billion went to Intel, giving Trump leverage to demand the removal of its CEO over past ties to China. (Intel so far has refused.)
State capitalism is a means of political, not just economic, control. Xi ruthlessly deploys economic levers to crush any challenge to party primacy. In 2020, Alibaba co-founder Jack Ma, arguably the countryâs most famous business leader, criticized Chinese regulators for stifling financial innovation. Retaliation was swift. Regulators canceled the initial public offering of Maâs financial company, Ant Group, and eventually fined it $2.8 billion for anticompetitive behavior. Ma briefly disappeared from public view.
Trump has similarly deployed executive orders and regulatory powers against media companies, banks, law firms and other companies he believes oppose him, while rewarding executives who align themselves with his priorities.
In Trumpâs first term, CEOs routinely spoke out when they disagreed with his policies such as on immigration and trade. Now, they shower him with donations and praise, or are mostly silent.
American democracy constrains the state through an independent judiciary, free speech, due process and the diffusion of power among multiple levels and branches of government. How far state capitalism ultimately displaces free-market capitalism in the U.S. depends on how well those checks and balances hold up.
Interesting discussion. Builds some of the internal discussions i've had on the failures of capitalism, the conflicts between self interest and cooperation as it relates to the invisible hand.
The idea that some widely accepted truths about our economy are merely assumptionsâones that may actually distort how the economy is meant to function
As discussed, alone, a selfish organism outcompetes. But, as a group, those w less selfish individuals outcompete. Selfishness undermines group welfare. It becomes a cancer - a selfish cell in the body.
The problem isnât with markets themselves, but with the way theyâre structured. History shows that government control of production and supply can be just as problematicâif not worseâthan the issues we see in todayâs capitalist systems.
Rather than corporatism, whereby fewer companies dominate production/supply, and fewer employees dominate the payroll (wage gaps), we need more coops, esopsâ¦to deal with the problem of individual selfishness and excessive accumulation of wealth.
The idea that âgreed is goodâ doesnât have to define capitalism or free markets. But weâand more specifically, figures within the Reagan administrationâdid just that when they framed a companyâs primary goal as maximizing shareholder wealth. In other words, a bad ideology was created and reinforced by us.
Along similar lines, I came across this story,
From the New York Times:
"Running a small wine business speaks to the romantic side of any winemakerâs ambition. Nobody aims to become a cog in a corporate operation, spinning the gerbil wheel of paperwork, committee meetings and goals set by bean counters.
"The aim instead is to express a personal vision through your own independent brand, farming according to your standards, making the wines you want to make, doing things your way ⦠And yet, for even some of the most successful such winemakers, the journey can be riddled with hazards. Financial pitfalls abound as independence might come at the cost of avoiding meddlesome but wealthy investors. Climate change has made each vintage a potential disaster, with once rare calamities like spring frosts, drought, hail and wildfires becoming an annual worry ⦠Add in the current wine economy: decreasing sales, sagging consumption and public health warnings, and youâve got trouble no matter how popular or critically acclaimed your brand might be.
"In Sonoma County, responding to exactly this situation, five independent winemakers have merged into a sort of collective in which ownership of six brands is shared but each brand will maintain its integrity with the founders retaining operative control.
"The winemakers will share resources and expertise, collaborate on unlovable chores like paperwork and other administrative tasks, and aim to achieve greater efficiency and economies of scale by operating as a larger unit.
"The collective includes Martha Stoumen of Martha Stoumen Wines, Noah and Kelly Dorrance of Reeve Wines and BloodRoot Wines, Sam Bilbro of Idlewild Wines and David Drummond of Overshine and Comunità . Mr. Drummond, a former chief legal officer for Alphabet, the parent company of Google, will be the founding partner and primary investor in what is now called the Overshine Collective."
The goal, the Times writes, is the avoid what often seems to be an inevitable outcome - the sale of the business to a corporation or conglomerate, in which personal vision and personality can be subsumed by process, bureaucracy and lowest common denominator thinking.
I think this is smart, and encouraging, and I wonder if it could be a model for other businesses in other segments of the the industry, inn both retail and manufacturing. I'd love it if small and independent companies could find strength in numbers, perhaps developing new alliances and fresh business models that could allow them to remain independent longer.
I took a look at inflation adjusted gas and food prices, compared to the 1970s.
Gas, came in near where we are now, just over $3 a gallon.
Food prices mostly came in lower. L-T affordability of food has improved, thanks to productivity gains, technological advancements in agriculture, and enhanced supply chains, which, at least up to the pandemic, kept food inflation low for the past few decades.
Eggs and milk are slightly cheaper today than their inflation-adjusted equivalents.
Bread is still somewhat less costly today, although close.
Beef is significantly cheaper today, suggesting improved long-term affordability.
Doing the same for rent was a bit alarming.
1975, the median gross monthly rent was about $148 per month.
Adjusted for inflation to 2025 dollars, this is approximately $805 per month. (CPI inflation factor from 1975 to 2025 is roughly 5.43Ã)(bls.gov, in2013dollars.com)
The average U.S. monthly rent in 2024 is approximately $1,535 to $1,650 (ipropertymanagement.com).
Interesting discussion. Builds some of the internal discussions i've had on the failures of capitalism, the conflicts between self interest and cooperation as it relates to the invisible hand.
The idea that some widely accepted truths about our economy are merely assumptionsâones that may actually distort how the economy is meant to function
As discussed, alone, a selfish organism outcompetes. But, as a group, those w less selfish individuals outcompete. Selfishness undermines group welfare. It becomes a cancer - a selfish cell in the body.
The problem isnât with markets themselves, but with the way theyâre structured. History shows that government control of production and supply can be just as problematicâif not worseâthan the issues we see in todayâs capitalist systems.
Rather than corporatism, whereby fewer companies dominate production/supply, and fewer employees dominate the payroll (wage gaps), we need more coops, esopsâ¦to deal with the problem of individual selfishness and excessive accumulation of wealth.
The idea that âgreed is goodâ doesnât have to define capitalism or free markets. But weâand more specifically, figures within the Reagan administrationâdid just that when they framed a companyâs primary goal as maximizing shareholder wealth. In other words, a bad ideology was created and reinforced by us.
President Trump on Monday threatened to punish Russia with heavy tariffs on countries that trade with Moscow if the Kremlin fails to reach a ceasefire deal with Ukraine by September, while promising Kyiv billions of dollars worth of military equipment.
"We're going to be doing very severe tariffs if we don't have a deal in 50 days," Trump said during a White House meeting with NATO Secretary-General Mark Rutte. "Tariffs at about 100%, you'd call them secondary tariffs."
It was his latest warning against Russian President Vladimir Putin, as Trump becomes increasingly frustrated with the Kremlin leader over his continued war in Ukraine.
President Trump explained that NATO countries would acquire U.S.-made weapons, including Patriot air defense missile systems, and that those countries would provide them to Ukraine. (...)
The Invisible Hand is self interest, not greed...unless your economic education comes from Hollywood.
Greedâwhether monetary or politicalâhas been an unavoidable issue of every economic system...none of which are 100% capitalist or socialist.
There are unique problems with capitalism
A hundred years ago, movements emerged to address some of these issuesâthrough unions, OSHA, FTC, banking rules, social programs.
Paradoxically, as socialist states adopted more liberal market economies, capitalist countries seem to be dismantling the very protections those movements fought for.
Perhaps the biggest problem is the excess accumulation of wealth...which is becoming a bigger problem as a result of this dismantling.
Market fundamentalism posits a transformative alchemy, wherein the base metal of selfishness is transmuted into the golden calf of social progress. This ideology is predicated on the notion that deliberate coordination, or central planning, is emphatically unnecessary and, more to the point, deleterious, as it disincentives animal spirits. The almighty âinvisible handâ possesses inherent wisdom, rendering any institutional means of oversight not only superfluous but actively detrimental to its salvational promises.
Idealized postulates or AI or both? The vocab is the clue.
Market fundamentalism posits a transformative alchemy, wherein the base metal of selfishness is transmuted into the golden calf of social progress. This ideology is predicated on the notion that deliberate coordination, or central planning, is emphatically unnecessary and, more to the point, deleterious, as it disincentives animal spirits. The almighty âinvisible handâ possesses inherent wisdom, rendering any institutional means of oversight not only superfluous but actively detrimental to its salvational promises.
These propositions constitute not merely an oversimplification, but a resounding misrepresentation of the actuality of capitalist exchange relations. Consequently, economic activity stemming from such zealous adherence engenders and exacerbates social inequalities, precisely because it deliberately disregards prevailing social conditions. By prioritizing abstract economic models over tangible human experience, it fails to account for injustices and vulnerabilities faced by populations.
In a system where selfishness reigns supreme, the principal aims to maximize their gain, while the agent endeavors to maximize their own. This divergence in objectives, by definition, generates social tension. Two fundamental concepts, not mutually exclusive, elucidate these imbalances: information asymmetry and asymmetric power.
Trump says new tariff deadline 'not 100 percent firm'
"
why would anyone bother with a trade deal? The R is pretty questionable, but the rest of this century is going to belong to the balance of that acronym.
As economist Justin Wolfers keeps pointing out, why would businesses invest in new manufacturing facilities if they can't be sure that tariffs (and thus increased prices) are here to stay? Those kind of investments call for 50-100 year forecasts according to Wolfers.
So this tariff tango dance isn't driving manufacturing back to the US.
