Trump has made clear what issue he thinks the Republican Party should emphasize in the upcoming mid-term elections. With the election of Democratic Socialists in several local and national elections, Trump believes that a campaign against “communism” will protect Republican office-seekers. Unfortunately, Trump has no idea what the word communism actually means.
The Democratic Socialists elected, such as Mamdani in New York City, have argued that stronger redistributive measures should be pursued in order to protect the interests of non-wealthy people. For example, Mamdani argues for the state to provide child-care assistance, a necessity for working families but one which has become prohibitively expensive. There is little question that such a policy would require higher tax revenues, and that us the basis for charging the Democrats as being communists.
That is a ridiculous accusation. The state provides a great deal of economic assistance to private enterprises, such as subsidies for farmers or tax incentives for fossil fuel companies. All those policies require higher taxes, but few Republicans in Iowa or Texas cry “communism” when they get the money. Market capitalism can handle such deviations in times of stress, as Keynes argued in the early part of the 20th century. The difference between paying for day care or paying farmers not to grow food is merely one of selecting which parts of the economy one wishes to support–not that the subsidies themselves are evidence of communism.
The key distinction between capitalism and communism is whether the decisions to invest in various economic enterprises is private or public. In capitalism, private individuals or corporations make investment decisions; in communism, the state, usually under the rubric of a Central Planning Committee, make investment decisions.
By this measure, Trump himself has become a communist. He has inserted the US government into investment decisions by securing shares in various corporations or by setting policies that directly affect those decisions. The list of state investments in private corporations is stunning:
Critical minerals & rare earths
- MP Materials — rare earth mining in California
- USA Rare Earth — critical minerals
- Lithium Americas — lithium mining
- Trilogy Metals — Arctic-region mining
- Vulcan Elements — critical minerals
- ReElement Technologies — rare earth processing
Semiconductors & advanced tech
- Intel — semiconductor manufacturing
- Nvidia — AI chips (structured deal, not necessarily a direct stake yet)
- xLight — semiconductor/tech sector
Industrial & energy
- U.S. Steel — domestic steel production
- Westinghouse — nuclear energy
Moreover, Trump has become heavily involved in decisions being made by Artificial Intelligence companies. The New York Times reports:
“On A.I., the White House has effectively created and put into effect its own mini-regulatory administration. The Trump administration’s directions to Anthropic and OpenAI follow its release last month of an executive order creating, by fiat, a regulatory framework for identifying “covered frontier models” and steering their release. The order contains some good ideas for Congress to consider, but it does not execute a law passed by Congress; it creates its own.”
Now that the US Government has made these types of decisions for specific corporation, one should assess how those decisions affect competitors in each field. The playing field for competition has been altered, and who knows if the government’s decisions are consistent or not with the supply and demand dynamics of the market. But the possibility of government largesse is difficult to resist.
Finally, Trump is making all sorts of economic decisions with tariffs with no input whatsoever from the Congress (although the courts have retained their voice). All those tariffs have a significant effect on investment decisions, but it is not at all clear that the tariffs have any economic logic or whether they are solely based upon political concerns. Government intervention in the second Trump Administration has been incredibly heavy-handed. Trump has become the sole repository of such decisions in much the same way a Central Planning Committee would make decisions.
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