Contributor: Have Republicans Forgot They’re Capitalists?

When Speaker of the House Mike Johnson hit At last weekend’s “No Kings” protests that will soon reach Washington’s National Mall, he made an old conservative refrain: “They hate capitalism. They hate our free enterprise system.”

I’m sure he’s right about some of the protestors. But this message comes from the leader of a party that stands as President Trump is doing exactly what Johnson rightfully rejects: substituting political control for market choice and rule by executive order.

In fact, what began as a popular uprising against the so-called elites turned into a program of state ownership, price-fixing and industrial control. Take a look.

More recently, the Trump administration quietly converted a CHIPS Act subsidy into an $8.9 billion equity purchase in Intel, making Washington a 10% owner of America’s largest technology company. Commerce Secretary Howard Lutnik insists “This is not socialism“It’s semantics.

Socialism is state control over the means of production. When the government becomes your largest shareholder, that’s a powerful first step.

The Intel case violates two fundamental economic truths. First, no group of officials can ever know better how to direct a complex industry than the millions of private investors, engineers, and consumers who spend their money. Second, the power of “friendship” with business is the power of control.

The more political capital the government invests, the more demands are made in return. It’s only a matter of time until politically favored locations, suppliers or hiring quotas shape Intel’s decisions. This is not capitalism.

Institutions have bought shares in companies before, and probably will again. In July, the Pentagon was built The largest shareholder At MP Materials, considered the only full-scale operating rare earth mine in the United States, the deal guarantees a 10-year price floor for MP production at nearly double the current market price. Parliamentary rivals were rightly surprised.

Yet Treasury Secretary Scott Besant recently told CNBC That Washington will continue to “set price targets” and “promote” commodities “across a range of industries” to encourage more investment in US manufacturing and away from China.

Although it may encourage more U.S. investment in the short term, guaranteeing an unfair advantage over competitors by setting a minimum price reduces the long-term incentives for U.S. firms to innovate and produce better products. Economists have understood for more than a century what happens when the government raises prices above their market level: consumers buy less, sellers produce more, surpluses accumulate and waste occurs. This is the logic of the failed farm-price support in the 1930s.

There are much better options than schemes like this. As for rare earth minerals, the United States is sitting on billions of dollars, yet MP is almost alone in their extraction. This is in part because too much regulation keeps potential underground, preventing investment in innovative mining solutions, processing plants, magnet factories and the skilled workforce to turn our geological abundance into economic value. Deregulation is the way of the free market. Not copying the Chinese model.

If that wasn’t enough, the agency nationalized all but a company named US Steel. To approve the market-driven buyout by Nippon Steel, Trump needed a “golden dividend,” giving him veto power over plant closings, production levels, investment, even prices. The White House effectively dictates how U.S. Steel can operate in the United States.

In the name of economic patriotism, we rebuilt the state-owned enterprise structure that American trade negotiators once fought in China and Europe. The same government that lectured Beijing on state capitalism and non-market behavior is now practicing it at home.

Future presidents of each party will inherit this precedent and stick with it. If the White House can take control of a steel company today, it can take control of a car manufacturer, chip designer or energy producer tomorrow in the name of whatever is considered an emergency at the time.

Republicans once warned that socialism begins with good intentions and ends with bureaucratic command. They were right. If we ever see the Sovietization of American capitalism, it probably won’t be through a labor party or a proletarian revolution. It will most likely come through the people managing the markets.

America prospered because it ruled no Own or direct industry. Entrepreneurs created the modern economy precisely because they were free to invest, trade, and fail when something didn’t offer enough to consumers. Interventionist industrial policy betrays this legacy.

So Mr. Johnson, although many protestors do not share my free market beliefs, it is not clear to me how an organization that sets prices, owns companies, and dictates production, loves capitalism or free enterprise.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with The Creators Syndicate.