President Donald Trump has made government investment and industrial policy a centerpiece of his second, nonconsecutive term. Some commentators liken his approach to “state capitalism,” an American version of the model used by China and the Soviet Union. The administration claims it will usher in a “golden age of America” through increased foreign investment and prosperity. Stagnant growth and investment, however, have classical liberal economists warning that only free markets, not government heavy-handedness, drive lasting economic success.

What counts as state capitalism depends on who you ask. Todd Tucker of the progressive Roosevelt Institute said it must be interventionist to define a “democratic, public-minded industrial policy,” while Phil Magness of the Independent Institute compared it to 16th- and 17th-century European mercantilism, in which governments steered the economy to favor politically connected industries. Veronique de Rugy at Mercatus Center suggested the Trump administration was involved in more  “transactional capitalism,” in which the White House agrees to a deal with another country because Trump perceives some kind of advantage.