In George Orwell’s Animal Farm (1945), the animals initially embrace the slogan “four legs good, two legs bad.” But, when the pigs take over and re-establish relations with humans, they modify the slogan to “four legs good, two legs better.” Something similar is happening in the US. A decade ago, conservatives bleated in unison “markets good, state bad.” Now they bleat “markets good, the state better.” Under President Donald Trump, America is embracing a new form of state capitalism, with huge consequences not just for the economy but the health of the republic.

The Trump administration has acquired equity stakes or a “golden share” in companies ranging from Intel Corporation and US Steel to Westinghouse nuclear reactors and Lithium Americas. In a direct echo of China’s civil-military fusion, the US Department of Defense is set to invest $1 billion in L3Harris Technologies Inc. While the collective value of these equity stakes is now in the low tens of billions, Bloomberg Intelligence expects that the administration will continue to tap into the hundreds of billions in federal funding meant for loans and grants to instead secure equity in public and private companies.

© Bloomberg