If you want to understand the silly little scene that played out between Apple CEO Tim Cook and President Donald Trump at the White House on Wednesday," he says, "you might start by remembering something that Vice President J.D. Vance said two years ago."
While attending a conference for nationalist conservatives, Vance offered an astonishing view of politics. The 'idea that there is this extremely strong division between the public sector and the private sector' was flawed, Vance argued. In reality, he went on to say, 'there is no meaningful distinction between the public and the private sector in the American regime. It is all fused together.'That's a useful framework for understanding much of what has happened since Trump (with Vance at his side) returned to the White House in January. That includes various trade policies and tariffs, of course, but also the "golden share" in U.S. Steel that Trump secured for himself, and how the administration leveraged its regulatory authority to force Paramount to pay a huge settlement. In each case, the Trump administration has tried to erase (or has ignored) the distinction between the public and the private sectors ...
Trump takes a further step. To him, not only is the private public, but the public is also very personal. ... He will decide what deals are in everyone's best interest, no matter what consenting individuals engaged in peaceful, private commerce might want to do. If he's unhappy about something in Brazil, it will be your problem. And if he's pleased with gifts and tributes, then all is well.
Do you run a foreign company trying to make a huge investment in American steel manufacturing? You'd better be prepared to cut Trump a piece of the action. Are you unhappy about Medicaid cuts that reduce the reimbursements your company receives from the government? That's nothing a $5 million donation and dinner at Mar-a-Lagocan't fix. There's a good reason why lobbying firms with direct access to the White House are reportedly keeping very, very busy these days.
And that's why Cook found himself in the Oval Office this week, presenting Trump with a special gift from Apple: A gold and glass token of the company's appreciation for Trump's special attention."Shortly afterwards, Trump responded in kind. Apple is now exempt from the 100 percent tariff that Trump is imposing on high-end computer chips made in other countries. Officially, that exemption is because Apple is investing $100 billion in U.S. manufacturing. Unofficially, it sure looks like Cook's gift paid off.
This is how business is now being done in the United Police States. Make sure you give a cut of your business to the boss.
You want to secure an "export license" for chips to China, as Nvidia and AMD needed, then as they discovered too, you'd better pay your 15% bribe. That will apparently fix all security "issues. It's not about security, of course. It's just tribute to the government.
The Students of Liberty twitter feed explains the game.
Ludwig von Mises warned us 80 years ago: when governments start making individual 'deals' with private companies, we're witnessing the transformation from capitalism to something far more dangerous. The news about Nvidia and AMD giving the U.S. government 15% of chip sales to China? Mises saw this exact pattern coming.
In his 1944 book Omnipotent Government, Mises identified a dangerous transformation he called "etatism." Think of it this way: You still "own" your business on paper, but the government tells you what to make, who to hire, what prices to charge, and who you can sell to. You're a manager, not an owner.Mises wrote: "The entrepreneur in a capitalist society depends upon the market and upon the consumers. Every entrepreneur must daily justify his social function through subservience to the wants of the consumers." But when business success requires political deals, everything changes.The pattern is accelerating across recent months: — Apple announced $600B U.S. investment after iPhone tariff threats — Intel's CEO visiting the White House after public criticism — Nvidia/AMD now paying 15% revenue cuts for China market access This isn't capitalism. It's what Mises called "etatism."Mises warned that under etatism, "the government, not the consumers, directs production." When companies must seek political permission rather than consumer approval, we've crossed a dangerous line. Success becomes about relationships with power, not service to people.
So what's the big deal about these corporate negotiations? Mises saw where this leads. When Nvidia pays 15% to access China markets, they're not responding to consumer demand. They're buying political permission. This fundamentally changes how businesses operate.
Instead of competing on price, quality, and innovation, companies now compete on political connections. Resources shift from R&D and customer service to lobbying and government relations. The best politically connected firms win, not the most efficient ones.
Here's the terrifying part: even if current leaders have good intentions, they're building the infrastructure of control. Once government has the power to grant or deny market access through individual deals, that power doesn't disappear when leadership changes.
Future authoritarians won't need to seize control—they'll inherit a system where economic power already flows through political channels. Small businesses can't negotiate these deals. They face full regulations while big corporations get special arrangements. Perfect tools for political control.
Mises understood this doesn't happen in one election cycle. It's a slow infection of ideas that spreads across decades until everyone accepts that companies should negotiate with whoever holds power. Eventually, people forget that businesses once served consumers, not politicians.Mises understood that ideas have consequences. Bad economic ideas don't just create poverty—they destroy the institutional foundations of free society.
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