Government-Owned Capitalism: Brilliant Strategy Or Socialist Disaster?

The federal government is no longer just regulating American companies. It is becoming a shareholder in them. That may be a smart national-security strategy. It may even produce a return for taxpayers.

But it also crosses a line that should make every believer in free enterprise ask a serious question:

If government is going to own American companies, who is going to keep politics out of the boardroom?

The Trump administration has made a legitimate case for using federal resources to strengthen industries essential to our national security. Semiconductors, critical minerals, advanced manufacturing and quantum computing are significant industries. America’s dependence on foreign nations, particularly China, for strategic technologies and materials has been a vulnerability for far too long.

I support rebuilding American manufacturing. I support strengthening domestic supply chains. I support reducing our dependence on hostile nations. And if taxpayer money is going to be committed to a private company, there is a reasonable argument that taxpayers should participate in the financial upside rather than simply writing another government grant check.

But that does not eliminate a bigger question: Should the federal government be an owner of private companies at all? And if we cross that line, where are the guardrails?

This question became even more relevant on Sept. 8 when the Commerce Department announced over $300 million in CHIPS Act funding for quantum computing companies D-Wave Quantum, Rigetti Computing and Quantinuum, with the government receiving minority equity stakes in return.

This follows the government’s larger investment in Intel. In 2025, the United States acquired approximately a 9.9% stake in Intel in an $8.9 billion transaction to strengthen domestic semiconductor manufacturing. Intel said the investment would be passive, with no board representation or special governance rights.

Those restrictions are important, but they raise an obvious question: If we recognize the danger enough to restrict one transaction, why have we not established clear government-wide rules governing federal ownership of private enterprise?

That question should transcend President Donald Trump. The question is not merely whether we trust this administration. It is whether we trust every future administration with the same power.

So what happens when the most powerful political institution in the country becomes the shareholder? Imagine an administration five or 10 years from now telling management of a company partly owned by Washington that it wants different environmental policies, hiring practices or cooperation with a labor agenda. Would management really be free to say no?

Government already possesses extraordinary power over businesses through regulation, permitting, contracting, antitrust enforcement and legislation. Now add ownership.

The potential conflict should concern anyone who believes in free enterprise. Suppose Washington owns shares of Company A while it competes against Company B. Will investors assume Company A has an implied government advantage? Could regulators treat it differently?

Then what happens when a company in which taxpayers own billions begins to fail? Will Washington allow it to fail, or conclude that taxpayers now have too much invested to permit bankruptcy? Once government becomes financially tied to an institution, normal market discipline becomes much more difficult.

Who determines which companies deserve government investment? Markets normally allocate capital through investors, lenders and customers. Government ownership introduces another factor: political bias.

That does not automatically make every government investment wrong. National security sometimes requires decisions a purely financial investor would never make. But it makes transparency essential.

We should know who recommended an investment, what criteria were used, what conflicts were examined, what information must be disclosed to Congress and, perhaps most importantly, what the exit strategy is.

Republican Sen. Jon Husted of Ohio has introduced legislation that would require many federal equity investments to be liquidated within eight years and direct the proceeds toward reducing the national debt. Without clear guardrails, he warned, future administrations could use taxpayer-funded investments to influence private companies and advance political agendas. These are not partisan questions. They are pro-free-enterprise questions.

An administration committed to deregulation, American manufacturing and economic freedom has an opportunity to establish safeguards now that future administrations would have to live under.

Congress should require federal ownership to be temporary. Government equity should not come with the ability to direct corporate social policy or select corporate directors. Agencies regulating a company should be separated from those managing the government’s investment. Every investment should have disclosed objectives, a defined holding period, an exit strategy and congressional oversight.

No government employee or elected authority should be permitted to invest in companies receiving these investments. Anyone with a preexisting financial interest should disclose it and recuse themselves from the decision.

When taxpayers make money from these investments, the proceeds should not become another pot of money for Washington to spend. They should go directly toward reducing the national debt.

That would reinforce the idea that these investments exist to protect legitimate national interests, not to expand government permanently into corporate America.

There may be circumstances where national security requires Washington to intervene in a strategically important industry. China does not separate economic strategy from national security strategy, and pretending otherwise would be foolish.

But America should not imitate the Chinese economic model in order to defeat it.

The strength of the American system has always been private property, private capital, competition and limited government. If Washington is going to become a shareholder, Congress needs to answer a fundamental question before government ownership becomes normal: Who protects the boardroom from Washington?

Though we may trust the people holding power today, the guardrails of a free society are built because someday … we may not.

Financial Issues Stewardship Ministries (FISM) host Mark Minnella brings 35 years of experience helping individuals invest with biblical integrity. He was the founder and president of one of the first investment advisories dedicated to biblically responsible investing principles. A co-founder of the National Association of Christian Financial Consultants and creator of the CFCA designation, Mark has been a voice for biblical stewardship through radio, writing and speaking for over 30 years. He hosted “More Than Money” on Bott Radio Network for 17 years and is the author of “The Wall Street Awakening.” Mark and his wife, Cindy, live in St. Louis, MO, and have three grown children.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.