I have long argued that there is more scope for government intervention in the US economy through industrial policy, and that regulation is needed in many areas to align private interests and the public good. But I have always argued that such interventions must be institutionalised, following impersonal, transparent processes that avoid even the appearance of political favouritism.
President Donald Trump claims that electing “socialist” Democrats would put the US on the path to becoming Venezuela or Cuba. But Trump’s own actions, as is often the case, fly in the face of what he says and what his Republican Party supposedly stands for. Far from continuing to champion capitalism and free enterprise, Trump’s GOP no longer supports either.
What has distinguished American-style capitalism is strict private ownership of firms. Under Chinese- and Russian-style capitalism, the government owns seemingly ordinary firms through corrupt arrangements that ultimately serve political leaders and their cronies — a system bearing little relation to the kind of economy that one studies in an introductory economics course. But now, the US is on the same path as Russia and China.
