Every time someone suggests the U.S. government should play a direct role in building industrial capacity, someone else calls it socialism. It’s a reflex, not an argument. And it reveals a stunning ignorance of American economic history.
Alexander Hamilton, the first Secretary of the Treasury, was the inventor of American state capitalism. His 1791 Report on Manufactures argued explicitly that a nation’s liberty depends on its manufacturing capacity, and that the government has an affirmative obligation to develop and protect that capacity. This wasn’t a fringe position. It was the founding economic doctrine of the United States.
Craig Tindale made this point forcefully, and it deserves to be repeated until it lands. State capitalism is not communism. It is the deliberate use of government financial power to ensure that the nation can produce the things it needs to remain sovereign and secure. Hamilton understood it. Eisenhower understood it. Churchill understood it. Menzies understood it.
What we practice today is stateless capitalism that treats national borders as irrelevant to production decisions. If it’s cheaper to make it in China, make it in China. The result is an economy extraordinarily efficient at producing consumer goods and catastrophically fragile at producing anything that matters for national security.
The weighted average cost of capital in the West runs 15-20% for industrial projects. China finances strategic infrastructure at cost — because the return is measured in geopolitical leverage, not quarterly earnings. We are not competing on a level playing field. We are competing against a state that plays a different game entirely. Recognizing that isn’t socialism. It’s Hamilton. And it’s long overdue.
The Hedge 