Last year, financier Scott Bessent went before the Manhattan Institute to excoriate the Biden administration for its revival of industrial policy. "History teaches us that prioritizing free enterprise and limiting government's role in the economy are key to raising living standards," he said. Nonetheless, he continued, "the Biden administration chose to put central planning at the heart of its economic agenda," offering tax breaks to companies investing in sectors and projects that the administration considered crucial to the nation's future, such as promoting green energy and jump-starting domestic production of critically important products made almost entirely in China. By injecting the state in what should be left to the market, Bessent concluded, "economic calamity was the predictable result."

That, as the saying has it, was then.

Last Wednesday, Bessent, now Donald Trump's Treasury secretary, said the government would be expanding its actual investments in companies in economic sectors that it considers critical to the nation's future. Where Biden merely sought to boost the private semiconductor industry through grants and favorable tax policies, Trump has had the government take an ownership stake in Intel. Biden certainly backed trade policies to boost the domestic steel industry, but Trump has had the government take a "golden share" (that is, become the chief decision-maker) in U.S. Steel. Under Trump, the government has also become a major shareholder in the nation's major rare earths mining company. On Wednesday, Bessent said the government would be adding to such acquisitions by intervening in five to seven other key industries, including pharmaceuticals, shipbuilding, and arms production.

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All these interventions, Bessent said, were, of course, a response to China's domination of these industries, and its concomitant power to withhold their products from the United States. By recently blocking the export of its rare earth minerals to the U.S., China has made clear it has the power to cripple any number of crucial industries that need those minerals for the batteries that power their products.

"When you are facing a nonmarket economy like China, then you have to exercise industrial policies," Bessent averred, overlooking the fact that that was the raison d'être for most of Biden's industrial policies, too.

This form of state capitalism -- where the government is enmeshed, in one way or another, in leading companies in key industries -- is common in Europe, but has long been outside the pale of American capitalism. Here, we have long relied on private markets, and the myth of private markets, to power the nation's economy. Even as iconic private companies have generally received all manner of governmental assistance -- e.g., our first national corporations, the railroads, which received immense land grants from the government, in return for which they had to fork over only enough to buy occasional congresses and state legislatures -- the ownership of those companies always stayed in private hands.

Bessent came close to saying that shareholder capitalism may not always be the best way to strengthen the nation.

Beginning in the 1880s, it was only the socialists and populists and the occasional maverick liberal who suggested the trains could be run and the work could be done by the government itself. Roughly 65 years ago, the liberal economist John Kenneth Galbraith argued that since the government was the chief, and often the sole, purchaser of the defense industry's products, it might as well just become the owner of Lockheed and Northrop and their peers, rather than see corporate revenues dribble away to some shareholders.

Galbraith's idea went nowhere fast, but Bessent was sounding distinctly ticked at our current arms producers when he spoke on Wednesday. "Our defense companies," he said, "are woefully behind in terms of deliveries." At minimum, he continued, the administration could make the companies spend less on stock buybacks and more on research -- an argument first made more than a decade ago by lefty economist William Lazonick and subsequently taken up by a number of progressive journalists, present company included. (Lazonick's argument extended to all major corporations, not just those in the arms-making business.)

That particular argument marks the leftmost point of Trumponomics thus far -- so leftmost, in fact, that it runs counter to Trumponomics' animating purpose, which is creating ways to further enrich the rich. Every year for the past 35 years or so, the share of corporate revenues devoted to stock buybacks has continued to rise; along with the steadily increasing share of revenues that corporations devote to dividends, it's a leading reason why major shareholders have seen their wealth and income soar while the wealth and income of the vast majority of Americans, those sad sacks who are dependent on income from wages, has stagnated. By the huge reductions in tax rates to the rich in his first term, and by the extension (and in some cases, enlargement) of those cuts in his second term, Trump has focused his economic policies on enabling the rich to claim more of the fortunes they've received, in no small amount, from buybacks.

Bessent came close, in other words, to saying that shareholder capitalism may not always be the best way to strengthen the nation. Then again, it was Bessent who was the chief salesman -- second only to Trump himself -- of the Republicans' tax cuts earlier this year, which had the ancillary effect of enhancing the appeal of buybacks to the rich, not that they needed much enhancing. In short, this is just one particularly glaring way in which the fundamental incoherence of Trump economic policy becomes plain for all to see.

At least a couple of Democrats understand that state capitalism, or better still, actual socialism, can serve public purposes beyond those of blocking dependence on China. In proposing that New York City establish five publicly owned markets in the city's food deserts, mayoral candidate Zohran Mamdani has recognized that access to healthy and affordable food is a public good that private markets haven't always delivered. And last week, California Gov. Gavin Newsom announced that the state's diabetics will be able to buy state-produced insulin pens for $11 (or five for $55) beginning in January, which could compel the mega-drug companies to lower their prices for insulin in the California market, too. (Newsom established a state-owned insulin lab in 2023.) Like Franklin Roosevelt's Tennessee Valley Authority, which brought electric power to the South and compelled private power companies to lower their rates, these two initiatives are rooted in the distinctly progressive belief that state capitalism -- or in these cases, the public options of enterprise socialism -- can address the problems of access and affordability.

Trump's critics, including a small number of old-school conservatives, have noted that his not-notably-constitutional enlisting of the Justice Department, the IRS, and any agency that's handy in his vendettas against his personal and political opponents may open the door for the Democrats to do that against Republicans when they return to power. Even given that opportunity, I doubt many Democrats would do that; it requires not just a willingness to ignore the nation's basic laws but also levels of deranged hatred to which few mortals can rise. But would Democrats cite Trump's state capitalism as a precedent for any of their own critiques of the market's failures to meet the nation's needs, and any of their own efforts to use state power to direct, or even supplant, private companies to better serve the national interest? Of course they would. Not that that would deter the Republicans from accusing the Democrats of communism.

Still, when Republicans do pipe up with such comments, Democrats could rightly cite their tomb-like silence when they've been confronted with Trump's private-sector power grabs, which run counter to everything that the party of Goldwater and Reagan has professed to believe. To whatever extent today's Republicans grapple with this existential 180, they may well tell themselves that it's not really state capitalism that they're supporting; it's Trump capitalism.

I suspect Trump himself believes that: He is the government, and therefore it is his control over these private corporations that he's compelling them to accept: not state control, just Trump's. This has nothing to do with state vs. market, with left vs. right. The very terms "left" and "right" come from the seating-by-ideology in France's National Assembly during the French Revolution, and Trump's model for governance predates all that; it goes back to the prerevolutionary days of the Bourbon kings, when the monarch was the state, when l'état c'est moi, when there was no government as such, but rather, and only, the monarch's court. Secretary, shmecretary; Bessent is just some duke who can be dumped if Trump ever thinks Bessent looked at him sideways. And whatever Trump may be doing, he's not following the counsel of Galbraith and Lazonick. His mentor is Louis XIV.