The most unlikely bipartisan issue in the United States right now is state ownership of the means of production. Donald Trump is turning Uncle Sam into a stock picker. His administration has now taken or agreed to take equity positions in 34 companies, including roughly 10 percent of Intel and stakes or warrants of up to 15 percent of MP Materials and nearly 20 percent of Elmet Group.
Meanwhile, the Democratic Socialists of America advocate public ownership of the largest corporations and essential industries. In New York, DSA member Mayor Zohran Mamdani plans to open city-owned grocery stores. Despite ideological differences, both MAGA and DSA claim that government can support jobs, communities, resilience and innovation better than market forces, and both describe it as a necessary break with a long-standing American free-market consensus.
Yet there is nothing new about such policies. They have been tried many times before and the track record is long and disappointing. The experience of my home country of Sweden in the 1970s and 1980s is informative, since state ownership was justified by many of the same, often conflicting, objectives that are now being invoked by Washington.
Sweden established the Swedish Investment Bank in 1967 to channel long-term finance to industry and in 1970 it founded the state holding company Statsföretag (Swedish State Company), which brought 22 companies under a single umbrella to coordinate and expand government ownership. Soon, what first seemed like a strength—that state ownership could achieve many goals simultaneously—became a corporate governance nightmare. Boards and management fought over whether profitability or industrial policy should take precedence, making both strategic decisions and accountability difficult.
State ownership also turned government into both umpire and player: the same politicians who regulated industries and distributed subsidies now had a financial interest in the success of particular companies. Some companies used government resources and guarantees for activities that seem distant from core state responsibilities. A state-owned restaurant group sent two employees to work for McDonald’s in the United States on a fact-finding mission.
Armed with this know-how, they later started Clock, a rare example of a government-run hamburger chain, including the distinctly Swedish "Hawaii burger," topped with pineapple. At one point, the Swedish Investment Bank led a consortium trying to salvage the Spanish galleon San José, which had sunk off the Colombian coast in 1708 with a treasure of gold believed to be worth billions. The consortium fell apart, and the San José remains on the ocean floor.
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