When governments become top shareholders, corporate focus shifts from pleasing customers to securing political favor and appropriations. R&D budgets are reallocated to lobbying, and market competition devolves from building the best product to playing the policy game most effectively, strangling innovation.

As traditional economic-based antitrust enforcement weakens, a new gatekeeper for M&A has emerged: political cronyism. A deal's approval may now hinge less on market concentration analysis and more on a political leader’s personal sentiment towards the acquiring CEO, fundamentally changing the risk calculus for corporate strategists.

The fastest path to generating immense wealth is shifting from pure innovation to achieving regulatory capture via proximity to the president. This strategy is designed to influence policy, secure government contracts, or even acquire state-seized assets like TikTok at a steep discount, representing a new form of crony capitalism.

Deng Xiaoping’s reforms, which ignited China’s growth, were based on adopting American free-market principles like private enterprise and foreign capital. China’s success stemmed from decentralizing its economy, the very system the U.S. is now tempted to abandon for a more centralized model.

In Russia, nominally private companies like Gazprom function as direct extensions of the state. Their international investments are designed not just for profit but to achieve geopolitical goals, creating a system where foreign policy, business interests, and the personal wealth of the ruling class are completely inseparable.

Command economies inevitably rely on force. In a free society, disagreement is resolved through persuasion. In an authoritarian system where directives are absolute, dissent is ultimately met with force. Adopting a top-down economic model means accepting state-sanctioned violence as a necessary tool.

China is explicitly subsidizing domestic semiconductor firms through its National Integrated Circuit Industry Investment Fund. This state-backed capital is the key driver behind its policy to achieve technological independence and replace foreign companies like NVIDIA.

The system often blamed as capitalism is distorted. True capitalism requires the risk of failure as a clearing mechanism. Today's system is closer to cronyism, where government interventions like bailouts and regulatory capture protect established players from failure.

The economic system champions individual responsibility for the middle class but provides government bailouts and shields large corporations and the wealthy from failure. This cronyism prevents creative destruction, calcifies the class structure, and stifles opportunities for new entrants.