LAST WEEK, United States President Donald Trump posted on his social media platform, Truth Social: “Intel Stock continues to rise. I’m very proud of that Company in that I am responsible for making the United States of America over 30 Billion Dollars in the last 90 days on that stock alone.”
For those not aware, the US government bought a stake in Intel, marking the company as a strategic winner in the semiconductor industry.
What this essentially means is that the Americans put one of their thumbs on the scales of the free market and pushed down hard. It would be like if the Philippine government took a stake in Ayala and signaled to the market that they have their favor.
This matters because the government under liberal democratic norms, they are supposed to be impartial referees. When they start taking stakes in private companies they become players and at that point, they become closer to corporatists than free market democrats.
But, of course, none of this is special. State backed enterprises are a thing. Our government does it too through Government-Owned and Controlled Corporations. Buying a private and established corporation, though, and then bragging about its continued rise in stock prices, that is an entirely different set up.
Now, what does this mean?
It means that the time of impartial governments and free markets has ended.
It means that rather than having an economy optimized for optimal wealth and productivity, economic will now be determined by state interests.
It means that the Philippines will soon change its economic structure to either imitate or cater to an post-free market world.
China already does state capitalism. Now, that America has made it explicit through Intel and other targeted industries, all the other economies will follow suit. After all, it makes no sense to insist on a free market if the rest of the world is not playing by the same rules.
China already does this, as do many state capitalist countries. Instead of letting the free market decide the optimal method for allocating capital, they pick winners and losers. Now, there are variations./PN
