The Trump-Pharma deals reflect the flaws of state capitalism

In the Trump administration's second term, there has been more focus on implementing "state capitalism" than during the first. And, as noted by Peter Orszag and co-authors in a recent article in Foreign Affairs, it has been more discretionary, and therefore also more arbitrary and unpredictable, than other possible formulations.

The intention is to increase the government's power to allocate resources in the commercial sector to achieve supposedly public objectives. This strategy is visible in multiple domains, including the "deals" the administration negotiated with 17 major biopharma companies on product pricing and enhanced domestic manufacturing. While Trump officials see these agreements as validating their approach, the methods used to reach them, and the confidentiality obscuring their implications, expose the problems that arise when the government operates beyond its proper limits...