Many business leaders are horrified at the prospect of New York City turning socialist under Zohran Mamdani, but Trump's assaults on free-market capitalism make him look like John D. Rockefeller.
fortune.com
The authors who are asking this question are not lightweights:
Jeffrey Sonnenfeld is Lester Crown Professor of Leadership Practice at the Yale School of Management and founder of the Yale Chief Executive Leadership Institute.
John Pepper was CEO and chairman of Proctor & Gamble, was chairman of the board of The Walt Disney Company and served on the boards of Motorola, Xerox, and Boston Scientific.
Anne Mulcahy was CEO and chairwoman of Xerox and served on the boards of Johnson & Johnson, Citigroup, and Target.
Bill George was CEO and chairman of Medtronic and served on the boards of Exxon, Goldman Sacks, Target, and Novartis.
Laura Tyson is the former chairman of the White House Counsel of Economic Advisers. The distinguished professor at the University of California, Berkeley, she was formerly dean of the Haas School of Business, and she now chairs the Board of Trustees at UC Berkeley’s Blum Center for Developing Economies.
As many CEOs understandably grew horrified last month at the prospect that New York City, the capital of capitalism, is on the brink of going socialist with the mayoral momentum of the inexperienced candidate Zohran Mamdani, they were ignoring the greater assault on free market capitalism that has already overtaken the nation in the Republican Party. While we agree that Mamdani’s solutions to affordable housing and grocery prices threaten to undermine free markets by bowing to the appeal of populist anger, President Donald Trump has already begun doing so, but to suit his own grandiose political agenda instead.
Unlike any leader of any free-market economy around the world, President Trump has seized control of private enterprise’s strategic decision-making and investment policies while invading corporate board rooms so that he may dictate leadership staffing, punish corporate critics, and demand public compliance with his political agenda. This is far more dangerous to capitalism than a city-run grocery store.
Many free-market economists and business leaders who have long worshipped the free-market ideals of Adam Smith, Friedrich Hayek, Ayn Rand, and Milton Friedman should be aware that their idols would be rolling in their graves right now, as rather than pursue standard laissez-faire conservative economic policies, MAGA has gone Marxist and even, increasingly, Maoist.
As Greg Ip warned this week in
The Wall Street Journal, “
The US marches toward state capitalism with American characteristics … President Trump is imitating [the] Chinese Communist Party by extending political control ever deeper into the economy.” Ip pointed out that in the past, crisis-driven government bailouts of the banking and automotive sectors, such as TARP, were acute, targeted assistance, with brief and bipartisan rescue aims. Similarly, government incentives to drive investments in chips manufacturing, oil exploration, space exploration, internet development, agricultural vitality, cancer detection, disease treatment, and clean energy were not ownership deals with preferred companies or corporate cronies.
Indeed, Ip’s warnings mirror our own, as we were the first to accurately, presciently warn—over a year ago—that many of Trump’s economic positions more closely resemble communism than capitalism, as part of what we called “
the coming MAGA assault on capitalism.” It certainly looks like MAGA is going Marxist if not even Maoist, especially across Trump’s vicious personal targeting of individual business leaders; government crackdown on business freedom of expression; weaponization of government powers; apparent extortion of businesses; and insertion of government into an unprecedented, outsized role in private sector strategic investment, capital flows and business decision-making.
Marxism and Maoism were both, of course, expressions of the communist theory that spilled forth from Karl Marx’s pen in the 19th century, brought to life in the brutal one-party states of the Soviet Union and the People’s Republic of China under its leader Mao Zedong, before it evolved into “capitalism with Chinese characteristics” starting in the 1970s, around the time of President Richard Nixon’s fateful visit to Beijing.
Both Marxism and Maoism claimed to champion “ordinary people” against corrupt or exploitative elites, while both targeted intellectuals, bureaucrats, and traditionalists, and purged institutions to enforce ideological purity, especially during Stalin’s “Great Terror” and Mao’s “Cultural Revolution.” Both centralized leadership to the point of creating a cult of personality, demanding intense loyalty and the glorification of the sole figure who could fix the country’s problems. Both prized loyalty over expertise, sidelining critics and dissenters in favor of a tightly controlled political narrative. Sound familiar?
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