America Is Sliding Toward Chinese-Style Capitalism

Who decides whether TikTok stays Chinese, is banned or sold? Washington. Who determines whether an American or Japanese company gets to buy

United States Steel? Washington. Who is giving Intel $8.5 billion to make semiconductors in the U.S.? You get the picture.

Across the U.S., business decisions once made in boardrooms or shareholder meetings increasingly depend on politics. The U.S. isn’t sliding toward socialism, in which the government controls the means of production. It may, however, be slouching toward state capitalism, in which government regularly intervenes in business to ensure it serves the national interest.

The problem, as both the TikTok and U.S. Steel affairs show, is that the national interest is constantly being redefined to fit the political priorities of the day.

While the U.S. has never been a laissez-faire paradise, more than other countries it believed in free-market capitalism and let efficiency and profits determine the allocation of capital.

Neither Donald Trump nor President Biden believe in that. Both are happy to use all the levers of the federal government, whether taxes, subsidies, regulations or the bully pulpit, to tilt business decisions toward their own vision of the national interest.

When the House of Representatives voted to force the sale or ban of TikTok, the short-video app owned by Beijing-based ByteDance, China’s Ministry of Commerce demanded, according to Xinhua, that the U.S. “earnestly respect the market economy and the principle of fair competition, and provide an open, fair, just and nondiscriminatory environment for enterprises from all countries.”