Reference no: EM133359325
Lee says that state capitalism is a "capitalist economic system in which the role of the state is dominant in investment, production, and distribution in the economy, through the state's own commercial activities or control over corporations."
State capitalism was once usually associated with the domestic economies of oppressive nation-states like China and Russia, where state-owned businesses dominated a market that was already heavily regulated (controlled) by the government. However, when you consider that the thirteen largest oil companies in the world are owned by governments, you can see the true extent of state intervention in global economies.
XX argues that even the governments of the most liberal countries (like the US and Europe) are now engaged in an evolved form of state capitalism. They achieve this by using different tools (like investments, subsidies, and trade policy) to actively intervene in different parts of the economy, both at home and abroad, to affect economic production and market function for political gain. They achieve this by using their sovereign power to steer economic processes in the direction of achieving political goals.
People point to former US president Trump's protectionist trade policies as an example. By putting higher tariffs on imported products (like aluminium and steel), Trump created artificial conditions that gave domestic producers a big advantage and messed up market competition. He did this to keep his promise during the election to bring back many declining US industries to their former glory.
xx reports Trump's policies will have a mixed effect on the world; Even though the industries that made the goods covered by tariffs did benefit from increased demand, which led to more jobs, this was completely cancelled out by the fact that workers whose jobs depended on imported goods lost their jobs because their companies had to cut costs because of higher production costs and/or less demand.
QUESTION:
Was the Trump administration ultimately beneficial or deleterious to the US economy?