Trump Blurs Capitalism's Lines

“President Trump likes to portray himself as the champion of capitalism standing up to the forces of socialism. A frequent target: New York City mayoral candidate Zohran Mamdani, whom Trump has called a "Communist Lunatic."

 

Mamdani says he is a democratic socialist, not a communist. More to the point, the lines are blurring between capitalism as practiced by Trump and socialism as advocated by the likes of Mamdani.

 

On Tuesday, Trump announced the launch of federal website "TrumpRx" through which the public will be able to buy discounted drugs. This bears echoes of Mamdani's proposal for city-owned grocery stories.

 

Trump and Mamdani share a fondness for strong-arming private companies that raise prices. Mamdani wants to freeze rents on New York apartments subject to rent control. Trump just negotiated a deal with Pfizer to lower prices in return for sparing it tariffs on pharmaceutical imports. He regularly berates and threatens companies that raise prices in response to his tariffs.

 

The Trump administration says its drug plan is consistent with free-market principles. Washington won't set prices but insist that prices charged to Medicaid are in line with those charged in other advanced economies (so-called "most favored nation" treatment).

 

It argues, with some justification, that drugmakers charge high prices in the U.S. to offset the low prices that foreign governments extract as monopoly buyers, justifying intervention.

 

While Mamdani would buy groceries from wholesalers and then sell to the public, TrumpRx would direct consumers to other websites, such as manufacturers'.

 

But if Trump isn't pursuing literal socialism, it certainly isn't free-market capitalism as Republicans once understood it. Republicans attacked the Affordable Care Act as socialism, though what its online marketplace does for health insurance is similar to what TrumpRx would purport to do for drugs. Like drug companies, Republicans once opposed Medicare negotiating prices as a form of price control.

 

Price controls, like rent controls, are popular. But just as rent controls are why apartments in New York are scarce, controlling drug prices, even indirectly, could limit medical innovation and the access Americans enjoy to the resulting drugs.

 

I have argued before that Trump practices a hybrid between capitalism and socialism akin to "state capitalism," popular in China and elsewhere, in which the state tells nominally private companies what to do. Sometimes, this involves taking a position in a company such as Intel or U.S. Steel. This week the administration said it is taking an equity stake in mining company Lithium Americas and its Nevada mining project, restructuring a federal loan agreement.

 

More often, Trump simply uses threats and rewards to direct business behavior: Pfizer promised lower prices and more investment in the U.S. to avoid tariffs; Apple did something similar. Coca-Cola changed the source of its sugar, and Cracker Barrel dropped a new logo. ABC briefly took comedian Jimmy Kimmel's talk show off the air after Trump officials threatened its broadcast licenses over his remarks around the killing of right-wing activist Charlie Kirk.

 

To be clear, Trump isn't a socialist. He genuinely likes business and has no problem with profits. Yet he has this in common with socialists: He thinks the country runs better when he tells companies and their shareholders what to do.” [1]

 

1. U.S. News -- Capital Account: Trump Blurs Capitalism's Lines. Ip, Greg.  Wall Street Journal, Eastern edition; New York, N.Y.. 02 Oct 2025: A2.