The election of New York mayor Zohran Mamdani and the surprising performance of Democratic Socialist or DSA-aligned candidates in Democratic primaries across the United States is reviving interest in socialism as a concept—and with it, its use alternately as a badge of honor and a political slur. This discourse is driven almost entirely by policy initiatives emanating from the left: single-payer healthcare systems, wealth taxes, and nationalization of fossil fuels and private utilities. It is not primarily driven by a Republican-controlled White House taking equity stakes in US semiconductor companies or assuming veto power over the actions of US steelmakers.
Yet according to the most rigorous comparative measure of state ownership and control over the economy, that is where the action has been. The United States is trending toward more state control over the economy. That pivot is not being overseen by the intellectual descendants of early 20th century socialist leader Eugene V. Debs—it is coming from the Trump administration.
The real question is not whether the US economy is becoming more statist, but how. State ownership can durably coexist with economic freedom, innovation, and democratic institutions. It can also become a vehicle for patronage, rent-seeking, and consolidation of executive power. The terms under which these stakes have been acquired and managed by the administration—ad-hoc, privately negotiated, and with significant executive discretion—are more troubling than the equity stakes themselves.
What is socialism?
Before diving into the data, we should be precise about terms. The defining feature of socialism is public or state ownership and/or control of productive resources. In common and partisan political usage, the term often refers to economic redistribution, worker empowerment, and egalitarianism. Questions of income (re)distribution, worker rights relative to capital, and the desirable balance of political power between the government and private enterprise are of course important but analytically distinct from the ownership/control question itself.
Accordingly, economies as different as Qatar, New Zealand, and the Soviet Union's dictatorship of the proletariat can be classified as socialist. And state ownership and/or control of the economy goes by many different names in different contexts: dirigisme, state capitalism, social democracy, and "socialism" as used in US political discourse. These terms conflate at least three analytically distinct dimensions: who owns or controls productive assets, whether the redistribution runs upward or downward, and how much direct discretion the executive has over these assets.
The concept is often treated as either/or; the New York Times asked if Trump's economic policy was "capitalism at all." In fact, all economies throughout history have commingled public and private ownership to at least some extent. And the variation is quite wide. Singapore, routinely identified as among the most free-market economies in the world, operates a state-owned holding company—Temasek—with a massive portfolio spanning finance, real estate,1 telecommunications, and utilities. Even in the Soviet Union—the most extensive experiment with public ownership and central planning yet attempted—collective farms were allowed in later years to sell their produce at market prices once their state-mandated quotas had been filled.
Measuring state ownership and control
Assessing the mix of public and private ownership in a given economy is challenging because state control is often hidden through regulatory leverage, procurement, tariffs, credit allocation, and political pressure. These mechanisms facilitate control without appearing as ownership on a balance sheet. For that reason, most serious attempts to measure state control over the economy or "economic freedom," a term preferred by libertarian and conservative organizations, are based in whole or in part on expert assessments.
I use the Varieties of Democracy (V-Dem) Project's State Ownership of Economy dataset (v2clstown), which measures the extent to which the state owns or controls capital (including land) in the industrial, agricultural, and service sectors. V-Dem is based at the University of Gothenburg, Sweden.2 The "or controls" clause in this definition is important, as control can be exerted without true ownership. The US government's "golden share" in Nippon Steel, secured after the United States approved its acquisition of U.S. Steel last year, allows the US government to appoint a member of the firm's board of directors and veto certain decisions, such as plant closures or idling, transfers of jobs, or relocating headquarters—but confers no equity and pays no dividends. It is control without ownership.
The variable is coded by country experts based on historical research and documentary evidence, and unlike other "economic freedom" measures—like the Heritage Foundation's Index of Economic Freedom or the Fraser Institute's Economic Freedom in the World index—it does not embed assumptions about the inherent desirability of state or private control of capital.3 In 2025, scores ranged from -3.28 (North Korea) to 2.98 (Japan).
The correlation between Heritage's economic freedom measure and V-Dem's state ownership/control variable in 2025 is only moderate.4 The Heritage index measures regulatory burden and ease of doing business—fundamentally similar to what the World Bank's Ease of Doing Business Index captures—not state ownership of the economy. To see that these measures capture different things, compare Singapore's rankings on each. Singapore ranks no. 1 on the Heritage economic freedom measure and 138th on the V-Dem measure of state ownership/control, largely due to the massive economic footprint of Temasek.
How socialist is the US economy already?
Not very—but the trend is toward more state ownership. The United States has consistently ranked among the countries with the least state control of the economy for the past two decades according to the V-Dem index (in which rank 1 = least state control; rank 179 = most) (see figure below). Over that period, the United States never ranked lower than 4th out of 179 covered countries, and often ranked 2nd, just behind Japan in 1st place (North Korea ranks 179th). In 2025, the first year of the Trump administration, the United States came under more state control of its economy, and 15 countries now have less state control than the United States, while 163 have more.
The US change in these rankings was not small. Only about 1.2 percent of year-over-year V-Dem score changes since 2005 were larger than the US shift.5 More illuminating than the percentile is the company in which it places the United States. The largest year-over-year changes in the sample are driven by countries like Afghanistan, Burkina Faso, Honduras, the Maldives, Myanmar, and South Sudan—countries facing either persistently volatile political economies or war-related crises, not large, advanced economies with several decades near the top of the rankings.
The United States is still among the most market-oriented economies in the world, within the top 20. But the trend is toward greater state ownership or control of the economy—that is, toward socialism. This is occurring under unified Republican control of the US government, not under a Democratic administration and certainly not due to the political influence of Democratic Socialists, who currently occupy only a tiny handful of seats in Congress.6
Most of the increase in state ownership and control has taken the form of equity stakes, rather than full nationalizations that would make the change much more obvious. Under the Trump administration, the United States has acquired a portfolio of equity or equity-like stakes in over 30 firms across the semiconductor, critical mineral, and quantum computing sectors, with the biggest single-ticket item being a 10 percent stake in Intel negotiated in 2025 that converted prior federal grants into US equity. Calls are coming both from politicians and the industry itself for the US government to take equity stakes in artificial intelligence hyperscalers who have yet to go public.
US precedent for these moves is thin. In 2008, the US government provided significant support to the US auto, finance, and insurance sectors, taking equity stakes in General Motors, several distressed banks, and insurance firm AIG. It also brought mortgage lenders Fannie Mae and Freddie Mac, both government-sponsored enterprises created in the 1930s, under US conservatorship—control without ownership. All of that occurred during the 2008 financial crisis, the biggest financial crisis since the Great Depression.
Before that, one needs to go back to the actual Great Depression to find interventions of this type and magnitude. Both the 2008 and 1930s interventions occurred during periods of acute crisis. In contrast, the Trump administration's acquisitions have taken place during a period of economic growth, low unemployment, and financial market stability. These are proactive, open-ended acquisitions, not temporary lifelines.
The Trump administration is obviously not framing these acquisitions as socialism. They are being presented as sage industrial policy focused on industries critical to national security and economic competitiveness. That description may be accurate. But the acquisitions are no less socialistic for it.
Is it a slippery slope to communism?
No. Communism is a political-economic system that combines the abolition of private property—quasi-total political control of the economy—with the subversion of price mechanisms and a redistributive, authoritarian government. There have been no genuine transitions to communism in over 50 years, with the last occurring in 1975. The three regimes that can reasonably be classified as communist in 2026—Cuba, North Korea, and the Lao People's Democratic Republic—account for less than 0.2 percent of global GDP. China's model is more accurately described as highly interventionist market-oriented socialism than a communist, planned economy—and China has not been actively exporting communism or supporting communist insurgencies since Deng Xiaoping's reforms in the late 1970s.
The slippery-slope-to-communism argument is a red herring. Countries can durably sustain comparatively high levels of state ownership and high assessed levels of economic freedom: Singapore is the most prominent example, but Bahrain, Botswana, Malaysia, and Uruguay are others. Politically, these regimes range from an authoritarian constitutional monarchy (Bahrain) to a consolidated democracy (Uruguay). The longest-running electoral democracy with universal suffrage—New Zealand—has survived periods of high state control and lower state control. The historical record suggests moves toward greater state control are about as likely to produce moves back toward less state control as they are more state control. Across the 2000–2025 period, countries experiencing a decline in their V-Dem state control/ownership score of comparable magnitude to the 2025 US shock—above the 95th percentile—show a mixed split in their subsequent trajectories: 30 percent improved within five years, 32 percent kept falling, and 38 percent held steady. The pattern is not one of inevitably increasing state ownership and control. A single year's shift in state ownership tells you very little about whether it will persist, deepen, or reverse.
All ownership structures—whether state or private—have consequences for who benefits and how assets should be managed. A private firm answers to shareholders; a state-owned firm answers to political actors. Neither is politically neutral. What matters isn't neutrality as much as the nature of that control. Temasek, Singapore's massive state-owned holding company, and its sovereign wealth fund are operated by technocrats at arm's-length from politics and have reasonably transparent mandates and performance-related benchmarks. Even under those circumstances, some observers contend political influences are still present. But the state is, in the day-to-day sense, a mostly passive investor.
What is much more corrosive, both politically and ultimately economically, is when state control is exercised in a more ad-hoc fashion, through privately negotiated channels and without any pretension of independent oversight. Under these circumstances, state ownership and control typically redistribute benefits to politically connected clients and away from the public. This potentially corrupting phenomenon is the prevailing concern with the Trump administration's approach. It is the domestic analog to the administration's privately negotiated tariff exemptions favoring certain politically connected businesses: How else should one interpret Belgium's diamond industry securing zero tariffs on $2 billion in annual polished diamond exports in September 2025, then presenting Trump with a jewel-encrusted ring? It is a similar patronage logic operating through a different channel.
State direction of the political economy was famously characteristic of King Louis XIV's rule in 17th century France—a patronage-based regime that ultimately sapped its own economic competitiveness. Wealth came through royal charters and monopolies granted to those with court connections, not market competition. France boomed briefly; by the 18th century, it stagnated while Britain—its government's role in the economy constrained by parliament and allowing genuine market competition—leapt ahead.
The Trump administration's "golden share" in Nippon Steel and its personalized tariff structure and host of exemptions operate in this mode: control with weak institutional constraints and often without transparent process. A dollar spent lobbying for regulatory favor is a dollar not spent on research and development. Over time, this saps economic competitiveness through rent-seeking. An economy increasingly dominated by rent-seeking and the consolidation of political power it facilitates are the real risks.
The United States is becoming more socialist. This turn has nothing to do with Democratic Socialists or socialism as understood as an egalitarian political project. In doing so, it is not hazarding a descent into communism; rather, it is becoming more like most of the economies that populate the international system. Far more important than this shift toward state control is how that control is being exercised.
The author thanks Greg Auclair for helpful methodological feedback.
Notes
1. About 90 percent of land in Singapore is owned by the government, and approximately 80 percent of the population lives in housing owned by the government. Singaporeans "own" housing in the form of 99-year leases, with ownership rights reverting to the state after expiry. Moreover, the ability to sell these leases is circumscribed by, among other things, ethnic quotas designed to promote social integration.
2. V-Dem draws on a global pool of more than 4,000 country experts spanning nearly every country in the world, typically aggregating judgments from at least five experts per country-year indicator using a Bayesian measurement model that accounts for individual coder reliability and bias. V-Dem does not report actual number of coders for each country, but the mean is 38. As a large country with a high concentration of political scientists studying democracy, the United States presumably has a higher number of coders.
3. The Heritage Foundation is not particularly coy about this; it begins its description of the US ranking on its index thusly: "The United States' economic freedom score is 72.8, making its economy the 22nd freest in the 2026 Index of Economic Freedom. Its rating has increased by 2.6 points from last year, ending the precipitous five-year decline of America's economic freedom. The Trump Administration's pragmatic pro-growth economic strategy—lowering the costs of doing business, advancing and spreading prosperity, and enhancing long-term competitiveness—has yielded the strongest economic growth rate recorded in recent years."
4. r = 0.56, n = 166. The Heritage Foundation labels its observations by the year of release, not the year of coverage: Scores in the 2026 Index are based on data from the second half of 2024 through the first half of 2025. V-Dem's 2025 score, by contrast, reflects calendar year 2025.
5. Rank-based measures can shift even when a country's own score is unchanged, if other countries' scores move around it; 5.3 percent of country-years initially flagged as rank shocks showed no meaningful change in the country's own score.
6. I count three: Rashida Talib (D-MI), Alexandria Ocasio-Cortez (D-NY), and Bernie Sanders (I-VT)—and I am being generous including Sanders, who is not a member of the Democratic Socialists nor a registered Democrat, though he caucuses with Democrats in the Senate.
Data Disclosure
This publication does not include a replication package.
