Have we come full circle now with China inspired by American Capitalism to create their own model of it, that now inspires the Americans to imitate the Chinese?
Yes, we've been copying the Chinese in a few cases in the past 6 years. I think they're the early warning signs of cultural dominance. Sort of like how a tin-pot African dictator in the 1980s would have an over-the-top western-style military uniform.
For all the current US administration has complained about the opposition being “socialist,” they’ve certainly gone all-in on the state partially owning private companies.
Almost like cries of “socialism” have become a dog whistle instead of what the term actually means.
>> For all the current US administration has complained about the opposition being “socialist,”
Not a dog whistle when its actually true. How many more DSA candidates need to be elected before you stop saying this?
Candidates endorsed by the Democratic Socialists of America have scored victories in 35 primary elections so far this year, including upsets against entrenched incumbents.
Norway is far ahead in this, they collect lots of tax from poor and avg. people yet they have the biggest wealth fund in the world. literally only benefits certain groups
There’s a word for such a political system, it starts with an ‘f.’ Expressing opposition to it in the context of current events gets you prosecutorial enhancements.
Really? It is quite fashionable to call the US fascist while going gaga at other countries that have similar or worse conditions. Let me bring receipts.
The most striking difference is that top investors in Europe hold much higher stakes than in the United States. The top ten in Europe features several governments.
Far from the same thing. Most of these are ex government monopolies, some still are. We also don't have dictators taking over all parts of our governments. Hitler did join forces with industrialists.
The term "fascism" has undergone so much memetic drift that it verges on useless, but this does bear a striking resemblance to fascist corporatism [1], at least taken to the logical conclusion:
"A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures."
A lot of dystopian literature has been written with the premise that governments would wither away and end up replaced by mega-corporations that become the de facto law. I suppose the theory where the government just buys all the corporations instead because they control the money supply was generally overlooked by those authors. The end result probably isn't much different, but the path to get there has some differences, I suppose. It also seems reasonable to say that the authors, not being from the finance world (at least that I know of) may not have realized the depths to which financial engineering would sink and the willingness of the governments to participate in it.
Back in the 1980s when cyberpunk was really thriving the government at least made mouth noises about fighting the worst excesses of financial engineering. Whether history bears that out as something they were actually doing, the reader is welcome to come to their own conclusions about. But the government at least tried to look like a countervailing force to financial engineering.
I'll bite, because this is HN and I think there's more space for genuine discussion here, not because I desire to be right.
First, addressing my first point about how this is "the modern equivalent of an ad hominem attack". The commenter is complaining as if Claude basically came up with this entire thing itself. Very very seldom is that actually how things get created, at least in my experience. Yes there's the potential for someone to say something stupid like "Claude, generate me a blog post about something", and Claude can do it. But that's such a weird way to relate to any content that was in-part authored by AI. That just isn't how virtually everyone I know is using the tools, so it's a disingenuous take.
Second, I find your dismissal of the aptness of using the phrase "ad hominem" attack reductive here because yes, AI is not a human, but two points here:
1) I'm going to give the true OP the benefit of the doubt, that they used AI as a tool for helping develop and hone their thoughts, and AI wasn't just set off in a black box
2) AI can produce novel ideas, and can produce the output of thought, even if it isn't producing it the same ways our brains think
Now the government has an extra incentive to get rid of unions entirely so that the company (and the government shareholder) makes more money. So yes, option B.
we're definitely noticing things under Democrats we'd say "sure, let the government figure out" and things under All republicans: "No, fuck that, you're just assholes trying to turn children into well heeled religious fundamentalists".
Socialism is the workers owning the means of production. There is nothing here where workers own it except only incidentally via employers issuing stock options and RSUs.
I've seen this assertion a few times now in the thread here, can you elaborate? The events of 2008 were kind of extraordinary, so I'm not sure we should shape all of our policy based on that - except in terms of trying to avoid another 2008/Great Recession, but I don't see these actions doing that.
So do I. As I understand it, those bills involved incentives that any company could access provided that they met the conditions (manufacture in US, etc). The IRA also provided direct incentives to consumers to spend their money as they saw fit (EVs, solar, heat pumps, etc).
Direct investment by the executive branch is something else entirely. For example, Intel is now blessed and too big to fail. Why would anyone start a competitor to it? If you did start a competitor, your first call would be to Commerce, right? Seems like a heaping dose of moral hazard.
I can understand direct investment in very narrow circumstances, such as rare earth minerals and possibly something like nuclear power generation.
An alternative is a truly-independent sovereign wealth fund, or independently-governed pension investment arm such as the Canada Pension Plan Investment Board. But I doubt, in light of the Humphrey's Executor decision, that it's possible for the United States to create such an entity now.
Just remember Piketty too, Capital in the 21st Century: the purpose is not generate revenue. It's too prevent extreme concentrations of wealth & power, to diffuse the un-democratic dangers hazards and threats.
That's confusing. The rich make their money and hold their assets in economically productive (or extractive) enterprises. Land, factories, services, arms, etc are the real storehouses of wealth. If you take that from the rich, they have nothing.
It creates a lot of perverse incentives, and is probably a bad idea in the long run. If the govt makes more money when intel is successful, then the govt is incentivized to sabotage Intel's competitors (e.g. through tariffs, export controls, and many other powers). This distorts the free market that is (allegedly) at the center of America's success
I read recently that corporate taxes used to be a lot higher on large conglomerated companies, which used to deter monopolization somewhat. Under this automatic-stake idea, it'd be interesting if the government's stake in corporations increased as they got larger? Companies try to avoid this and so don't combine so much?
Of course once the government does have a large stake in the largest monopoly-like companies, it's immensely motivated to keep them large. Hmm. This idea isn't good.
I am not the original commenter, but I interpret it to mean that large corporations can almost always arrange it so that they don't pay tax or don't pay their fair share of tax. 88 companies paid $0 tax on $105B in profit in 2025[0]
I agree that corporate taxes are not working at this time for one specific country. But the claim of "corporate taxes don't work" is much more broad and not something I've seen specific evidence for. My understanding was that historically corporate taxes have been extremely effective, even if those taxes aren't paid the profits of a company are instead redirected as other investments.
If the US government got nonvoting shares in startups along with VC's then that could bring in lots of revenue from capital gains without calling it "taxes."
If it were in return for a tax break then they might even do it voluntarily.
What capital gains? The governments balance sheet doesn't matter...
Think of it like the original Bitcoin wallet, its value is $0 because none of those will ever be sold.
If dividends are involved it could matter but the government basically gets 20% of dividends already and extra 4% doesn't make a huge difference.
Returning to blocking stock buybacks as price manipulation and forcing businesses to give out dividends again would actually impact revenue in a meaningful way in contrast.
Dividends and stock buybacks are equivalent except for the tax consequences. Money is flowing from the company to investors. If, say, the government had 20% of the stock and sold it into the buyback to remain at 20%, that's similar to a dividend.
So this ends up being equivalent to taxes on both dividends and buybacks, except that nobody in particular has to pay the tax.
> I guess preferential treatment could be the only issue?
I'm not sure it's the only issue, but for now focusing only on this issue: it's a really big issue. The R's often complained about Dems choosing winners and losers (IIRC related to the solar industry). This is now way beyond what the Dems were trying to do by advancing solar. The gov can use it's buying power to sway things towards Intel, for example, over AMD.
The other tangential issue is that in some cases these can look like bribes. For example, OpenAI "offering" 5% of their stock to the gov.
The investments listed here in the article make this seem like an effort to shore up or incentivize industries or companies that are integral to national defense. One example, in the ongoing US-China trade war one of the strongest moves China did was put [export controls on rare earth minerals][1] which are essential components across technology, defense, and healthcare to name a few. The government investing in these companies isn't ideal from a free enterprise perspective but seems rational from a national security perspective.
Yes. This is called industrial policy, and there is bipartisan support for this. 2008 changed thinking on both sides of the aisle around leveraging state power to build industries.
Plenty of us Obama and Biden alums are industrial policy fans, and there is a similar cohort across the aisle.
The issues with this are precedent/slippery slope. Today it's a small stake in a small number of companies, but empirically government initiatives almost always grow. Once entrenched, I would be willing to bet that the government will take larger and larger stakes in a bigger and bigger number of companies until this model becomes a non-trivial, potentially dominant, share of the economy. I can see myself becoming a single-issue voter to oppose that future (although given bipartisan support I'm unlikely to have any options; maybe Rand Paul).
Anything is a slippery slope if you resign to it. It's not like governments have never been willing (or forced) to privatize or reduce their roles in markets. We are exchanging ideas on a government initiative
We desperately need a third party to displace one of these two. Having a state interest in industry is of course a great idea—telecoms, power generation, a base level of healthcare providers, pharmaceuticals, base level tech manufacturers are obvious things that should be state owned—but this just seems like an extension of the defense industry corruption (the "military industrial complex") that's plagued our country for many decades. Why am I paying to protect myself from china? Who will protect me from this one?
Exactly, few would oppose a stake in rare earths mining or something, but the more likely endgame of this is a government stake in companies like Google and Palantir. Which will inevitably lead to even more influence and “special access” privileges.
Edit: others have pointed out that the government likely already had investments in most of these tech firms through In-Q-Tel, which is also a potential issue, but that’s funding for small growing companies. It’s another matter entirely when government owns a percentage of our mature technology infrastructure.
We are the country with the proven record as nefarious and backstabbing. This is, in fact, the reason why I am complaining in the first place and don't trust our state to represent our interests (long before I was born—this is a bipartisan problem).
It's quite amazing that we were the target of 9/11 and failed to learn a damn thing that might help us avoid another.
If the left had done this, they would have been attacked for "socialism." But since it's a right wing administration doing it, it becomes "national security industrial policy."
This isn't communism. It's state capitalism that socializes losses and privatizes profits.
It's bad communism and bad capitalism at the same time.
I'd like to call this 'Napoleonism,' after the pig Napoleon in George Orwell's Animal Farm
i think an important nuance and the reason we don't suddenly have a sovereign wealth fund is it’s not a centralized US Gov buying stakes. It’s a bunch of different government entities using different pools of capital
- Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight
- Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions
- Energy dept: Lithium Americas / Thacker Pass, Westinghouse nuclear
Excluding the White House, this is the correct approach. Each department and it's associated agencies have better domain experience in specific niches and access to capital.
This doesn't preclude the creation of a generalized SWF, but there is a difference between an SWF, SDF, and everything in-between.
This is the same approach Japan, South Korea, China, and India use as well.
I am happy with this. There needs to be more democratic control of the economy, as the people who have been running American countries have been consistently making decisions that are against the national interest. There's risk to it, but the status quo is not something to be happy about either.
There was a really interesting episode of EconTalk podcast about 6 years ago which had a guest (woman, if it helps find it) arguing that the US gov should invest in and have ownership of a lot more startups, similar to how they funded Tesla.
Investment is about voting/control, not just money.
From a purely financial perspective, federal taxation on companies would be similar to owning shares (except ≈preferential since the government usually gets paid first).
From a voting and control perspective, we usually don't want the government getting involved (the government should be using industry regulations, and avoiding trying to pick winners).
In New Zealand our government screws up everything it has an ownership stake in (notably electricity and rail).
Thanks for the link - started listening but not my cup of T.
Most thought gets hyperfocused on money, however value is mostly invisible - economic utility and externalities.
Can a government get dollars from progress? No: for example the returns from science or open source are hard to value. The idea of a government owning shares to get a return on investment is extremely silly.
Secondly governments often make huge mistakes if trying to decide on purposeful investments.
Much of the world's wealth has come about despite government choices, and bureaucratic red tape usually hinders true wealth creation.
It is a very hard topic to think about.
And discussion seems to get derailed by focusing on dollars and how to cut the pie up.
I know it is not the same thing, but in case people aren't already aware, Alaskan residents have long owned stocks in private companies.
It is called the Alaska Permanent Fund and a constitutionally established sovereign wealth fund invested in a diversified portfolio and managed by a state-owned corporation, the Alaska Permanent Fund Corporation.
Earnings help fund the state government and annual dividend checks are distributed to residents.
The story is that states have some very large number of little bits of money with and without purpose all parked with investment companies. The total sum was argued to be so large the government owns a large share of the economy.
I like the idea of getting a slice of the action for the country. I mean, to have a nice slice of profits or something would be really nice. You know the equity is nice in that only pays off if there are profits. What would be even nicer is just a nice permanent claim on profits, like 20% or something like that....don't we call that a tax rate? /s
116 comments
[ 0.21 ms ] story [ 81.2 ms ] threadFor all the current US administration has complained about the opposition being “socialist,” they’ve certainly gone all-in on the state partially owning private companies.
Almost like cries of “socialism” have become a dog whistle instead of what the term actually means.
Not a dog whistle when its actually true. How many more DSA candidates need to be elected before you stop saying this?
Candidates endorsed by the Democratic Socialists of America have scored victories in 35 primary elections so far this year, including upsets against entrenched incumbents.
https://www.washingtonexaminer.com/news/campaigns/congressio...
And at what level are they? Aren't there over half a million elected officials, one way or another, in the USA?
There are nearly twenty thousand at state level or above.
https://www.econstor.eu/bitstream/10419/263159/1/1815112018....
https://en.wikipedia.org/wiki/Category:Government-owned_comp...Do you want to apply the word you had in mind to those governments too?
It makes them even worse if you are defining fascism. Look up Italy when fascism was alive.
> We also don't have dictators taking over all parts of our governments
Because they are already in charge.
"A fascist corporation can be defined as a government-directed confederation of employers and employees unions, with the aim of overseeing production in a comprehensive manner. Theoretically, each corporation within this structure assumes the responsibility of advocating for the interests of its respective profession, particularly through the negotiation of labor agreements and similar measures."
A lot of dystopian literature has been written with the premise that governments would wither away and end up replaced by mega-corporations that become the de facto law. I suppose the theory where the government just buys all the corporations instead because they control the money supply was generally overlooked by those authors. The end result probably isn't much different, but the path to get there has some differences, I suppose. It also seems reasonable to say that the authors, not being from the finance world (at least that I know of) may not have realized the depths to which financial engineering would sink and the willingness of the governments to participate in it.
Back in the 1980s when cyberpunk was really thriving the government at least made mouth noises about fighting the worst excesses of financial engineering. Whether history bears that out as something they were actually doing, the reader is welcome to come to their own conclusions about. But the government at least tried to look like a countervailing force to financial engineering.
If you want human attention, expend human labour.
First, addressing my first point about how this is "the modern equivalent of an ad hominem attack". The commenter is complaining as if Claude basically came up with this entire thing itself. Very very seldom is that actually how things get created, at least in my experience. Yes there's the potential for someone to say something stupid like "Claude, generate me a blog post about something", and Claude can do it. But that's such a weird way to relate to any content that was in-part authored by AI. That just isn't how virtually everyone I know is using the tools, so it's a disingenuous take.
Second, I find your dismissal of the aptness of using the phrase "ad hominem" attack reductive here because yes, AI is not a human, but two points here:
1) I'm going to give the true OP the benefit of the doubt, that they used AI as a tool for helping develop and hone their thoughts, and AI wasn't just set off in a black box
2) AI can produce novel ideas, and can produce the output of thought, even if it isn't producing it the same ways our brains think
* https://en.wikipedia.org/wiki/Socialism_with_Chinese_charact...
That or just go full fascism. Who knows!@
It's obviously clear attitude is everything.
OpenAI ‘in early talks to give 5% stake to US government’
https://news.ycombinator.com/item?id=48759623
Thanks dad.
sovereign funds, federal ownership making companies "too big to fail" is 100% socialism
but republicans are devious enough to know not to call it that
so do we get to idiotically slur the current administration and call them communists?
Repeating outdated tropes ad nauseum is dumb.
I've seen this assertion a few times now in the thread here, can you elaborate? The events of 2008 were kind of extraordinary, so I'm not sure we should shape all of our policy based on that - except in terms of trying to avoid another 2008/Great Recession, but I don't see these actions doing that.
For this specific industrial policy? The Intel deal was an outright shakedown.
There's bipartisan support for healthcare, too. Unfortunately, quite a bit of serious dissension on exactly what that means.
edit: Yes [0][1][2][3].
So, no. Not the "pick random companies and extort shares out of them" approach.
So do I. As I understand it, those bills involved incentives that any company could access provided that they met the conditions (manufacture in US, etc). The IRA also provided direct incentives to consumers to spend their money as they saw fit (EVs, solar, heat pumps, etc).
Direct investment by the executive branch is something else entirely. For example, Intel is now blessed and too big to fail. Why would anyone start a competitor to it? If you did start a competitor, your first call would be to Commerce, right? Seems like a heaping dose of moral hazard.
I can understand direct investment in very narrow circumstances, such as rare earth minerals and possibly something like nuclear power generation.
An alternative is a truly-independent sovereign wealth fund, or independently-governed pension investment arm such as the Canada Pension Plan Investment Board. But I doubt, in light of the Humphrey's Executor decision, that it's possible for the United States to create such an entity now.
Tax the rich.
Of course once the government does have a large stake in the largest monopoly-like companies, it's immensely motivated to keep them large. Hmm. This idea isn't good.
US government has always had a policy of sabotaging international competition
What does this mean?
[0] https://itep.org/88-profitable-corporations-paid-zero-income...
If it were in return for a tax break then they might even do it voluntarily.
Think of it like the original Bitcoin wallet, its value is $0 because none of those will ever be sold.
If dividends are involved it could matter but the government basically gets 20% of dividends already and extra 4% doesn't make a huge difference.
Returning to blocking stock buybacks as price manipulation and forcing businesses to give out dividends again would actually impact revenue in a meaningful way in contrast.
So this ends up being equivalent to taxes on both dividends and buybacks, except that nobody in particular has to pay the tax.
I guess preferential treatment could be the only issue?
I'm not sure it's the only issue, but for now focusing only on this issue: it's a really big issue. The R's often complained about Dems choosing winners and losers (IIRC related to the solar industry). This is now way beyond what the Dems were trying to do by advancing solar. The gov can use it's buying power to sway things towards Intel, for example, over AMD.
The other tangential issue is that in some cases these can look like bribes. For example, OpenAI "offering" 5% of their stock to the gov.
Well, Intel is actually important for national defense because of their foundries...
Whereas AMD sold their foundries long ago so now they're just one of many fabless chip designers.
Pretty sure that's the goal: the government wants a competent cutting edge chip maker on US soil.
[1]: https://en.wikipedia.org/wiki/Rare_earths_trade_dispute
Plenty of us Obama and Biden alums are industrial policy fans, and there is a similar cohort across the aisle.
That's unfortunately not been the reality through Obama, Trump and Biden policies.
Edit: others have pointed out that the government likely already had investments in most of these tech firms through In-Q-Tel, which is also a potential issue, but that’s funding for small growing companies. It’s another matter entirely when government owns a percentage of our mature technology infrastructure.
It's quite amazing that we were the target of 9/11 and failed to learn a damn thing that might help us avoid another.
This isn't communism. It's state capitalism that socializes losses and privatizes profits.
It's bad communism and bad capitalism at the same time. I'd like to call this 'Napoleonism,' after the pig Napoleon in George Orwell's Animal Farm
Karl wrote for a republican newspaper in New York.
Shall I dig out my Auferstanden aus Ruinen vinyl?
- Commerce dept: Intel, IBM quantum, GlobalFoundries, D-Wave, Rigetti, xLight
- Dept of "war": MP Materials for rare earths, L3Harris rocket motors for munitions
- Energy dept: Lithium Americas / Thacker Pass, Westinghouse nuclear
- White House: U.S. Steel golden share
This doesn't preclude the creation of a generalized SWF, but there is a difference between an SWF, SDF, and everything in-between.
This is the same approach Japan, South Korea, China, and India use as well.
And you think this is that? Oh dear.
> the people who have been running American countries have been consistently making decisions that are against the national interest
Freudian slip?
I don't care how it starts. I'm tried of the kind of people who ideologically oppose government control.
> Freudian slip?
Autocorrect typo for companies, obviously.
Agreed to the latter; ooof to the former. I absolutely think government can, and should, do more for the people. But the what of it matters.
> Autocorrect typo for companies, obviously.
Obviously. I just thought it was funny.
From a purely financial perspective, federal taxation on companies would be similar to owning shares (except ≈preferential since the government usually gets paid first).
From a voting and control perspective, we usually don't want the government getting involved (the government should be using industry regulations, and avoiding trying to pick winners).
In New Zealand our government screws up everything it has an ownership stake in (notably electricity and rail).
Most thought gets hyperfocused on money, however value is mostly invisible - economic utility and externalities.
Can a government get dollars from progress? No: for example the returns from science or open source are hard to value. The idea of a government owning shares to get a return on investment is extremely silly.
Secondly governments often make huge mistakes if trying to decide on purposeful investments.
Much of the world's wealth has come about despite government choices, and bureaucratic red tape usually hinders true wealth creation.
It is a very hard topic to think about.
And discussion seems to get derailed by focusing on dollars and how to cut the pie up.
We are all deeply irrational.
It is called the Alaska Permanent Fund and a constitutionally established sovereign wealth fund invested in a diversified portfolio and managed by a state-owned corporation, the Alaska Permanent Fund Corporation.
Earnings help fund the state government and annual dividend checks are distributed to residents.
The story is that states have some very large number of little bits of money with and without purpose all parked with investment companies. The total sum was argued to be so large the government owns a large share of the economy.