The “Beacon of the World” is Faltering

We all know the image the United States has projected to the world over the past few decades. It was a “Beacon.”

It held two torches high: one labeled “Democracy and Freedom,” and the other, “The Free Market.”

The second torch, in particular, sent a message to the world: Open your doors for business. Don’t build walls. Let goods, capital, and talent flow freely like water. This is how we all get rich; this is how we achieve world peace. For a long time, America was the chief architect and head preacher of globalization.

But haven’t you felt lately that the light from this beacon is flickering?

It is no longer warmly inviting everyone to “come over.” Instead, it’s shouting “stay away,” and is busy stacking bricks to build walls at its own front door. The Statue of Liberty, once the symbol of openness and inclusion, seems to have quietly turned her back to pick up a mason’s trowel.

This raises a haunting question: Is the United States—the country that once championed free trade and viewed “planned economies” as a plague—quietly accelerating down a very familiar path toward the abyss?

Is it sliding toward the very enemy it once despised most: the totalitarian system?

Some might say I’m just being an alarmist. I know, it sounds crazy. How could the U.S. fall? It has the Constitution, the separation of powers, and the world’s most powerful civil society.

However, even the sturdiest fortresses often crumble from within.

Eighty years ago, before the smoke of WWII had even cleared, an Austrian prophetic thinker named Ludwig von Mises offered a chilling insight in his book Omnipotent Government. He argued that a nation’s journey toward totalitarianism and servitude rarely begins with the evil plan of a dictator. Instead, it starts from a seemingly benevolent and patriotic origin: government intervention in the economy.

Once that first domino is pushed, it triggers an inevitable chain reaction:

• To make intervention work, you must adopt protectionism.
• For protectionism to be effective, you must have industrial planning.
• To execute industrial planning, you must control capital and people.
• To make control absolute, you must regulate prices and thought…

Eventually, state power becomes a runaway black hole, swallowing everything and dragging society into the void.

In past decades, scholars of the Austrian School used Mises’ theory to analyze the Soviet Union, Nazi Germany, and many historical tragedies. The fit was always startlingly accurate. But few thought that one day, after decades of globalization, we would need to pick up this same theory to examine the United States of America.

My task in this long-form essay is to apply Mises’ framework to the American landscape since 2017. I want to see if the path the U.S. is currently on overlaps with the trajectory Mises predicted.

The core question is this: From Trump’s loud “America First” and his tariff “big sticks,” to the Biden administration’s ambitious CHIPS and Science Act, to the restrictions on investment in China, drug price controls, and higher immigration bars—is the Great Ship of State known as America verifying, step by step, the terrifying prophecy Mises wrote 80 years ago?

I. The “Fatal Logic” of Interventionism (Theory)

Before interpreting recent economic history, we must first understand the theory—specifically, Mises’ theory of “Interventionism.” We need to spend enough time grasping the essence of this framework because it is the foundation of all subsequent analysis. Only when the foundation is solid can we see that these seemingly isolated and chaotic policies actually follow the same destined script.

1. The Origins and Internal Contradictions of Interventionism

Interventionism is a sugar-coated poison. Its origin is rarely malice; rather, it stems from an irresistible sense of “goodwill.”

Imagine a country, let’s call it Country A. The textile industry in Country A is struggling. Under market competition, workers’ wages have stabilized at $10 per hour. At this point, a politician full of compassion and a sense of justice takes office. He visits the textile communities, sees their meager lifestyle, and is deeply moved.

At a mass rally, he declares passionately: “$10 an hour is an exploitation of labor! It is intolerable for our citizens to live on the edge of poverty! I promise to raise the legal minimum wage to $15 an hour!”

The crowd cheers. The media praises it as a “historic step for labor rights.” The bill passes smoothly. Everything looks wonderful.

But Mises is the one who analyzes the consequences while everyone else is celebrating. He forces us to stay calm and look at the fatal ripples this “pebble of goodwill” creates in the economic pond.

The First Ripple: The Mutation of Costs. For the factory owner, this isn’t politics; it’s accounting. His labor costs have jumped 50% overnight. He isn’t a philanthropist; his primary mission is to keep the business alive. What does he do? He has only three options:

1. Try to pass that 50% cost increase to consumers by raising prices.
2. Maintain prices but cut costs by laying off workers or replacing them with automation.
3. If his profit margins were already thin and he can’t raise prices or automate, he simply goes bankrupt.

The government’s “goodwill” has created its first “unintended consequence”: it intended to help workers, but it likely resulted in higher prices for everyone or higher unemployment for the very people who needed the jobs most.

The Second Ripple: Distorted Price Signals. Here, we must understand Mises’ concept of the greatness of “Price.” Market prices aren’t just numbers picked out of thin air by greedy businessmen. They are an incredibly complex information system. The $10 wage condensed countless pieces of data: the industry’s technical level, global cotton output, consumer demand, worker skill levels… It acts like a sensitive thermometer, honestly reflecting the true value of that job within the entire economic system.

When the government mandates a $15 wage, it’s like putting a hot hand over that thermometer. It doesn’t change the actual temperature of the room, but it distorts the information. This distorted price sends the wrong signal: entrepreneurs may wrongly believe demand is high enough to support such wages and make bad investments, while workers develop unrealistic expectations.

The Third Ripple: The “Addictiveness” of Intervention. This is Mises’ most profound insight. He pointed out that government intervention is “addictive.” Because the first intervention inevitably creates new, thornier problems, the government’s only solution to these new problems is to introduce more and stronger interventions.

In our story, the minimum wage led to inflation and unemployment. The public complains: “The government intervened, so why is life harder?” Does the government admit it was wrong? No. It says: “This isn’t a policy failure; it’s malicious price gouging by businesses and heartless layoffs by owners! I need more power to regulate prices and ban layoffs!”

To make the first intervention “look” effective, the second and third must follow. Price controls lead to shortages; banning layoffs leads to a loss of corporate vitality… the snowball grows until the government’s hand reaches into every corner of the economy. This is the tragedy of interventionism: it starts with “goodwill,” proceeds through a chain of uncontrollable “evil results,” and ends in a destination diametrically opposed to its original intent.

2. Why Domestic Intervention Inevitably Leads to Protectionism

Now, let’s take this story from a closed country and put it into an open, globalized world. Here, the evolution of the tragedy accelerates sharply. In an open international market, global trade plays two vital roles relative to a government’s actions.

First, it is a “Magic Mirror.” Remember the textile factory in Country A? Under domestic intervention, its production cost ($15/hr) is now much higher than its true economic efficiency. Meanwhile, the factory in neighboring Country B has no such intervention; its wages remain market-determined at $10.

The result? Country B’s fabric is high quality and cheap, flooding Country A’s market. Clothing manufacturers in Country A will unhesitatingly ditch expensive domestic fabric for imports. Country A’s textile mills now face total destruction.

At this moment, the international market—the “Magic Mirror”—reflects the failure and stupidity of Country A’s $15 wage policy with brutal clarity. It tells everyone: “Your government is doing something that defies economic logic!”

Second, it is a “Rein.” This sharp “pain” is actually a protective mechanism. It acts like a rein, pulling back the government’s carriage before it plunges off a cliff. Public anger and business failures create political pressure, forcing the government to reconsider or revoke the failed policy.

But we must think about the mechanics of politics. What is the first survival instinct of a government that needs votes and legitimacy? Is it to “admit a mistake”? No. It is to “hide the mistake.” When have you ever heard Trump or Biden say they were wrong?

When the “Mirror” shows an ugly truth and the “Rein” pulls too hard, the government’s instinctive reaction is to break the mirror and snap the rein.

How? The only way—and the only choice—is to build a wall and embrace Protectionism.

The politician gives a stirring speech: “Our textile industry is suffering from unfair competition! Country B is ‘exploiting’ its workers with low wages to commit shameful dumping! To protect our workers’ jobs and defend our industrial dignity, I am announcing a 50% tariff on all imported textiles!”

Magic happens. Country B’s $100 fabric plus a $50 tariff now costs $150. Country A’s textile mills are suddenly resuscitated from the ICU. They can continue to produce at high costs and sell at high prices. Jobs are saved, and the wave of bankruptcies is averted. The government, once a “failed intervener,” is rebranded as a “hero defending national interests.”

Conclusion (Mises): Protectionism is not an active, well-thought-out foreign economic strategy. It is a passive, reactive “political survival pill” and an “institutional fig leaf” used to cover up the failure of domestic intervention policies. It is a political maneuver that forcibly “externalizes” the costs of domestic policy failures and shifts the blame to foreigners.

Therefore, a government committed to broad domestic intervention must move toward protectionism. This isn’t a matter of “maybe”; it is a logical necessity. If it doesn’t, its interventionist lies will be exposed instantly under the sunlight of an open market.

This is the “Fatal Logic” of interventionism. It starts with a seed of “goodwill,” sprouts in the soil of “unintended consequences,” and ultimately bears the poisonous fruit of “protectionism.”

Once you understand this profound and somewhat cruel theoretical foundation, look back at the U.S. since 2016. You will find that the actions of both the Trump and Biden administrations have been meticulously providing the most vivid, living footnotes to Mises’ theory.

II. The Essence of “America First”

June 28, 2016. Monessen, Pennsylvania.

The name might sound unfamiliar to you. But decades ago, this was the heart of the American steel industry. Molten metal flowed, chimneys lined the horizon, and the air itself smelled like wealth. At this moment, however, all that remained were rust-stained abandoned factories and a group of people forgotten by the times.

On this day, a New York real estate developer wearing a red MAGA hat stood in front of a derelict aluminum plant. He wasn’t there to invest; he was there to “harvest” anger. That man was Donald Trump.

He delivered a speech to hundreds of disillusioned blue-collar workers—a speech that historians would later study as the “starting gun” for America’s great pivot. Trump didn’t talk about complex economic theories. He used simple, stinging language. He said:

“Our politicians have pursued a policy of globalization that has moved our jobs, our wealth, and our factories to Mexico and overseas… Globalization has made the financial elite who donate to politicians very, very wealthy. But it has left millions of our workers with nothing but poverty and heartache… Look at Monessen, look at Pennsylvania. The fires in our steel and aluminum plants have been extinguished. Our fathers built this great country using American steel. But today, we are using foreign steel and aluminum to rebuild other countries.”

Then, he made a lethal and seductive promise: “All of that is going to change. From this day forward, it’s going to be America First!”

In this speech, Trump accurately identified two “scapegoats”: the North American Free Trade Agreement (NAFTA) signed in 1994, which he called “the worst trade deal in history,” and China’s entry into the WTO, which he labeled “the greatest job theft in the history of the world.”

This speech was not an improvised political performance; it was a carefully constructed “political contract.” Trump reached a silent deal with the voters of the Rust Belt: “You give me your votes, and I will give you an ‘enemy’ and a ‘solution’.”

The “enemy” was globalization and “unfair” trade partners. The “solution” was to tear down the existing system and use aggressive means to “grab” the jobs back.

When he officially entered the White House in January 2017, the fulfillment of this contract began immediately. His first moves weren’t complex domestic reforms but the fulfillment of his most symbolic promises. Within his first week, he signed an executive order pulling the U.S. out of the Trans-Pacific Partnership (TPP). This agreement, which the Obama administration had spent years building to establish a new generation of trade rules, was torn up effortlessly.

Next came the renegotiation of NAFTA. The process was filled with coercion and threats. The Trump administration constantly warned Canada and Mexico that if they didn’t meet American demands, he would slap devastating tariffs on their cars and other products.

Meanwhile, domestically, while the Trump administration claimed to believe in “small government” on paper, in practice, it engaged in clear “intervention” and “protection” for specific interest groups. For example, during the 40-day United Auto Workers (UAW) strike against General Motors in 2019, Trump broke with Republican presidential tradition. Instead of condemning the union, he repeatedly tweeted pressure at GM, demanding they “don’t close the Ohio plant” and “open new plants in the U.S.”

See? The thread of “selective domestic intervention” was already being laid. By tacitly or explicitly supporting the union’s hardline stance, he maintained his political base in the Rust Belt. But this undoubtedly increased labor costs for businesses, further weakening their international competitiveness.

When the “cause” of domestic intervention is planted, the “effect” of seeking external trade protection is only a matter of time. But to launch an unprecedented trade war, domestic political demand isn’t enough; one must construct a perfect “enemy” theoretically and morally.

This task fell to a key figure: Peter Navarro. This Harvard-educated PhD in economics was a marginal figure in academia, but his extreme views clicked perfectly with Trump. He was appointed Director of the White House National Trade Council and became the “chief architect” of the trade war.

As early as 2011, Navarro had published a sensational book—Death by China. It was later made into a documentary. In this book, Navarro systematically blamed all of America’s economic problems on China’s “malicious behavior.” He summarized China’s “seven deadly sins,” including illegal export subsidies, currency manipulation, intellectual property theft, forced technology transfer, cyber espionage, dumping, and sweatshops.

The academic value of this book was scoffed at by mainstream economists. But its political value was unparalleled. It provided the Trump administration with a complete “victim narrative.” In this story, the U.S. was no longer the leader and beneficiary of globalization, but an innocent, cheated “naïf.” China, meanwhile, was a calculating, unscrupulous “economic aggressor.”

This narrative spread through Washington like a pre-war mobilization order. On August 14, 2017, Trump signed a memorandum instructing the U.S. Trade Representative (USTR) to officially launch a “Section 301 investigation” into China. “Section 301” is a bully clause from the Trade Act of 1974 that authorizes the President to unilaterally impose retaliatory measures—like tariffs—on any country deemed to have “unreasonable” or “unfair” trade practices.

This was a highly symbolic move. it meant the U.S. was completely abandoning the multilateral dispute resolution mechanisms represented by the WTO and picking up the unilateralist “big stick” where domestic law trumped international law.

After nearly a year of “investigation,” on March 22, 2018, then-USTR Robert Lighthizer—another famous China hawk—released a hundred-page report. This report almost entirely adopted Navarro’s views, listing various “crimes” of China regarding tech transfer, IP, and innovation. It became the final “legal basis” for the trade war.

At this point, the stage was set. The domestic political contract was signed, the perfect external enemy was shaped, and the legal “authorization” was found. A storm destined to change the global landscape was coming.

2018 was one of the darkest years in global trade history since WWII. On the same day the 301 report was released, Trump signed a presidential memorandum announcing large-scale tariffs on Chinese imports. At that moment, Trump uttered his famous, miscalculated quote:

“We’re in a trade war. I said that months ago. But folks, trade wars are good, and easy to win!”

This lighthearted remark kicked off a tariff spiral that would last for years. Let’s review the key hits:

1. The First Strike: Steel and Aluminum. On March 1, the Trump administration announced tariffs of 25% on steel and 10% on aluminum imports, citing “national security.” While global in scope, it was aimed directly at the largest producer, China.
2. The Second Strike: The $50 Billion List. On July 6, the U.S. slapped 25% tariffs on the first batch of $34 billion worth of Chinese goods, focused on high-tech products from the “Made in China 2025” plan (aerospace, IT, robotics). By August 23, another $16 billion followed.
3. The Third Strike: The $200 Billion List. China retaliated proportionally. This enraged Trump. On September 24, the U.S. announced 10% tariffs on another $200 billion of Chinese goods, threatening to raise the rate to 25%. This list spanned thousands of items—from handbags and furniture to seafood and bicycles.

These three strikes completely upended the trade order between China, the U.S., and the world. It’s important to see that these “tariff combinations” were strategically designed. The steel tariffs answered the Rust Belt; the $50 billion list targeted China’s industrial upgrades; and the $200 billion list was “maximum pressure” meant to force a surrender by hurting China’s export economy.

Of course, this “easy to win” war did not end quickly. Instead, it became a long war of attrition that backfired on the U.S. economy. Opposition rose. Legislators from agricultural states were frantic because China’s retaliation hit soybeans and pork, causing massive losses for American farmers. Retailers warned that tariffs would be passed to consumers as price hikes. Tech companies complained about supply chain disruptions.

But all these rational voices were drowned out by the feverish, populist political atmosphere. As we analyzed, the primary purpose of the trade war was no longer an economic calculation. It was a political show—a “reality show” of toughness performed for the Rust Belt voters. Trump successfully cast himself as a gladiator fighting for the American worker. Inflation, farmer losses, and global instability were merely “costs” to be ignored in the face of short-term political gains.

America had stepped onto the point of no return for protectionism. Trump had pushed over the first heavy domino. However, everyone underestimated the intensity and breadth of the chain reaction. When tariffs proved to be a medicine that couldn’t cure the disease and brought severe side effects, a deeper, more “planned economy” style of intervention began to grow uncontrollably among the American political elite.

An even more ambitious “National Reconstruction Plan” led by the Biden administration was rising on the horizon. Its core was a seductive yet potentially toxic “apple”: the CHIPS and Science Act.

If Trump’s trade war was a street brawl characterized by personal style, the Biden era shifted the mode of struggle fundamentally. The new master of the White House was no longer satisfied with just adding locks to the door. He and his elite team wanted to perform a systematic, grand, and dangerous engineering project: they wanted to step onto the field themselves, blueprints and cement in hand, to build a brand new “underlying operating system” for the American economy.

The codename for this system: “Modern Industrial Policy.”

Its flagship project was the multi-billion dollar effort to reshape global tech—the CHIPS and Science Act. This marked America’s formal transition from passive “protectionism” into active “industrial planning.” The “Visible Hand” was no longer hiding; it was walking proudly to center stage, ready to be the absolute protagonist under the spotlight.

III. The “Poisoned Apple” of Industrial Policy

In the spring of 2021, the atmosphere in Washington was thick with anxiety. A sudden global “chip shortage” had gripped the throat of the American economy like an invisible hand.

Automotive giants like Ford and GM were forced to intermittently shut down multi-billion dollar production lines simply because they lacked tiny chips. Outside the factories, tens of thousands of new cars sat silently in parking lots, waiting for a “brain” no larger than a fingernail.

This scene deeply stung the American political elite. It revealed a cruel reality in the most visceral and humiliating way: the United States, the empire that invented the semiconductor and pioneered the information age, could no longer guarantee the “sustenance” for its own auto industry.

This shortage became the direct catalyst for the CHIPS Act. On April 12, 2021, President Joe Biden convened a high-profile “CEO Summit on Semiconductor and Supply Chain Resilience” at the White House. Present were the CEOs of 19 giants, including Intel, Google, and GM. Holding up a silicon wafer, Biden famously declared:

“These chips, these wafers… they are infrastructure. We need to build the infrastructure of today, not repair the infrastructure of yesterday… Franky, we can’t wait any longer.”

With those words, Biden performed a clever “bait and switch” of concepts. He redefined “chips”—a high-tech commodity whose production and distribution should be determined by market competition—as “infrastructure.” This is a crucial political tactic: once something is labeled “infrastructure,” it implies the government can and should lead its investment and construction.

After a year of debate, the CHIPS and Science Act of 2022 was signed into law on August 9. We need to look closely at the text to see how the “Visible Hand” intervenes. The law authorizes $280 billion, with the core being $52.7 billion in direct subsidies for the semiconductor industry:

• $39 billion for incentives to build or expand domestic manufacturing.
• $11 billion for R&D (e.g., a National Semiconductor Technology Center).
• The rest for defense-related production, workforce training, and supply chain security.
• Plus, a 25% tax credit for equipment and factory construction.

You might think, “Isn’t this just throwing money around? Many countries do this.” But the devil is in the details. The true “planned economy” nature of this law lies in the “guardrail” clauses, orchestrated by Commerce Secretary Gina Raimondo, the so-called “Chip Tsar.”

The “Guardrails” are a classic “carrot and stick” approach:

• The Carrot: The $52.7 billion and tax credits.
• The Stick: Severe restrictions. Any company accepting federal funds is banned for ten years from any “significant transaction” involving advanced semiconductor manufacturing (under 28nm) in “countries of concern” like China.

The Commerce Department added even more shocking rules: companies seeking over $150 million in subsidies must share “excess profits” with the government; they must provide affordable childcare for workers; they must prioritize American-made steel; and they must detail how they will involve labor unions.

Put these details together, and the picture is clear. This isn’t just a support plan; it’s a “National Plan” led by the government. The state isn’t just an investor; it’s the master planner, the construction supervisor, the profit distributor, and the welfare inspector. It attempts to use administrative orders to plan every link of a high-tech industry—from investment and R&D to production and profit distribution. This is exactly what Mises warned about: when the government transforms from a “night watchman” into the “Chief Engineer” of the economy, inefficiency follows.

The “American Ordeal” for Global Giants

When the “Chief Engineer’s” grand blueprint met reality, economic law—the “gravity” of the market—pushed back.

TSMC, Samsung, and Intel became the protagonists of this “American Experiment.” But the “onshoring” quickly turned into a costly ordeal.

TSMC: The “Model Student” in Trouble. TSMC invested $40 billion in Arizona. Biden even visited the factory, declaring “American manufacturing is back!” But costs spiraled out of control. TSMC founder Morris Chang noted bluntly: “The cost of making chips in the U.S. might be 50% higher than in Taiwan.” He argued that shifting industry based on politics rather than comparative advantage is “expensive and futile.”

Then came the “human” factor. The U.S. lacks enough skilled technicians. When TSMC tried to fly in hundreds of engineers from Taiwan to keep the schedule, local unions revolted. Union leaders accused TSMC of using “lack of skill” as an excuse to bring in cheap foreign labor. By July 2023, TSMC was forced to delay mass production from 2024 to 2025. Bloomberg reported that even with billions in subsidies, chips from Arizona are 5% to 20% more expensive than those from Taiwan. TSMC’s move to America hasn’t strengthened U.S. competitiveness; it has increased costs.

Intel: The “Village Hope” Sinking. Intel received $8.5 billion in direct subsidies and $11 billion in loans. It planned “the most advanced factories on Earth” in Ohio—the “Heart of Silicon Heartland.” But in early 2023, CEO Pat Gelsinger admitted that “market uncertainty” and “supply chain issues” meant the 2025 production goal might not be met. Analysts pointed out the core problem: they simply cannot find enough skilled workers willing to do the high-intensity, high-discipline work of chip fabrication in America.

The “Addiction” of Intervention

When the “Chief Blueprint” hits a wall, the government doesn’t reflect; it assumes there are “loopholes” to plug. The “addiction” of intervention sets in. From the CHIPS Act, the vines of regulation began to crawl across the entire tech sector, led by the Bureau of Industry and Security (BIS)—the core of America’s “Tech Planning Commission.”

1. Export Controls: In October 2022, the “strictest in history” export controls were launched. It didn’t just ban products; it banned technical parameters (logic performance, memory density, interconnect bandwidth).
2. Ally Pressure: The U.S. pressured the Netherlands (ASML) and Japan (Tokyo Electron) to limit equipment exports to China.
3. AI Restrictions: Regulation moved to the “cloud,” restricting providers like AWS and Azure from offering high-performance computing to Chinese AI firms.

This “Small Yard, High Fence” strategy, articulated by Jake Sullivan, is a grand plan to forcibly “decouple” and “restructure” global tech. In this plan, companies are no longer free market actors; they are pawns on a strategic chessboard. Resources are no longer allocated by price and efficiency, but by nationality and “entity lists.”

IV. The Building of Invisible Walls

To ensure the “National Plan” works, the government must build dams to contain the two most unruly currents: Capital and Talent. This marks the transition into “Factor Control,” shaking the very foundation of the “Beacon of the World.”

The Wall for Capital

On August 9, 2023, Biden signed an executive order authorizing the Treasury to ban or restrict U.S. private equity and venture capital from investing in three Chinese sectors: Semiconductors, Quantum Tech, and AI.

Historically, U.S. control was on “inbound” investment (CFIUS). This new order targets “outbound” capital. For the first time, an American entrepreneur’s own money cannot be spent without government approval. This sets a “Customs Office” between Wall Street and global tech.

The right of capital to “vote with its feet” is a check on government power. If a government is foolish, capital leaves. By tightening this rein, the U.S. sends a signal to Silicon Valley and Wall Street: your freedom has boundaries defined by Washington’s “National Security.” Once this door is opened, it won’t close. Today it’s Chinese chips; tomorrow it could be Indian pharmaceuticals or European green energy.

The Wall for Talent

The government has used a “double-tap” strategy for talent: “Blocking the door” and “Locking the door.”

1. Blocking the Door (Inflow): Trump tightened H1B visas. Biden, while using different rhetoric, raised application fees by 70%. Trump even proposed a $100,000 H1B fee. Top talent is now choosing Canada or the UK over the U.S.
2. Locking the Door (Outflow): The “Exit Tax” or “Breakup Fee” has become a lethal tool. If you renounce U.S. citizenship, you must undergo a “deemed sale” of all your assets and pay a massive capital gains tax. The fee to renounce citizenship has jumped from $450 to $2,350 in a decade. New proposals suggest taxing certain expatriates for 10 years after they leave.

When a country uses high costs to prevent people from leaving, it treats citizens not as free individuals, but as “resources” belonging to the state. This is Mises’ warning: in a planned economy, humans become “means” to a national end.

When walls, blueprints, and shackles fail to stop the rising tide of inflation (caused by the interventions themselves), the government reaches for the last resort: Price Controls.

In recent elections, figures from Trump to Harris have blamed “corporate greed” for inflation. Trump suggested calling CEOs to “order” them to lower oil prices; Harris and progressives like Warren advocated for “anti-price gouging” laws and “windfall profit taxes.”

This narrative turns a complex economic consequence into a simple “good vs. evil” story. As Mises predicted, the government never blames its own policies; it blames “human greed.”

The Inflation Reduction Act of 2022 is the masterpiece of this irony. It contains almost nothing to “reduce” inflation; instead, it grants the government the power to “negotiate” drug prices. If a company refuses the government’s price, it faces a tax of up to 95% of that drug’s sales. This isn’t a negotiation; it’s a “price holdup.”

The consequence? Research from the University of Chicago predicts an 18% drop in R&D and 135 fewer new drugs over a decade. Price control saves today by killing tomorrow.

The Military-Industrial-Digital Complex

Mises noted that protectionism is a breeding ground for monopoly. Without external competition, the “big fish” in the domestic pond stop fighting and start colluding with the state.

1. The Military-Industrial Complex: The “Big Five” (Lockheed, Raytheon, etc.) operate in an oligarchy secured by the “Rotating Door” (670+ former DOD officials moved to defense firms in 2022) and massive lobbying ($130M in 2023). The Boeing 737 MAX scandal—where lobbying secured safety exemptions—shows how regulators (FAA) are “captured” by the regulated.
2. The Digital Complex: As the “Tech War” deepens, the government needs “National Champions” (Google, Microsoft, Nvidia) to enforce its blocks. In return, the government offers “tolerance” regarding anti-trust or privacy laws. A “Digital Cartel” is forming under the name of “National Security.”

Trump’s administration even suggested the government should take a “cut” of sales from tech giants. The state is no longer just regulating; it’s demanding a share of the loot.

When a nation controls prices and embraces state-aligned monopolies, the market economy is just a hollow shell. Resource allocation has shifted from millions of free individuals to a few bureaucrats and oligarchs. We are standing on the doorstep of a planned economy.

The next and final step to keep this inefficient machine running is the most dangerous one: The reshaping of society and the taming of the individual.

V. The Regression of American Rights

I must emphasize again: today’s America is not a totalitarian state in the traditional sense. It still possesses a strong tradition of liberty and a vibrant civil society. However, what we are witnessing today is not a “yes or no” state, but a “process,” a “trend.”

It’s like the boiling frog. The loss of freedom rarely happens as an overnight upheaval; instead, it occurs through a “salami-slicing” tactic, where pieces are cut away one by one under a series of seemingly reasonable or even necessary pretexts. Today, we must examine whether this “salami-slicing” has already begun. We are not looking for a completed “Gulag,” but rather for the “intellectual fences” and “cages of rights” that are being quietly erected.

This erosion of political liberty began in an area most easily breached by the “national security” narrative: academia, particularly among Chinese-American scientists engaged in cutting-edge research.

In November 2018, the Trump administration’s Department of Justice loudly launched the “China Initiative.” Its official goal sounded noble: to combat economic espionage, intellectual property theft, and talent recruitment programs (like the “Thousand Talents Plan”). But in practice, this movement quickly devolved into a massive campaign of scrutiny and prosecution targeting Chinese-American scientists, characterized by heavy racial profiling. FBI agents began appearing frequently in the labs of top American universities, questioning, investigating, and even arresting professors and researchers.

Consider the most typical and tragic case: Professor Gang Chen of MIT. A world-renowned expert in heat transfer and a member of the National Academy of Engineering, Professor Chen was arrested at gunpoint by FBI agents at his home in January 2021. The charges were not “espionage” or “theft of IP,” but “wire fraud,” “failure to disclose a foreign bank account,” and “hiding ties to China when applying for federal research grants.” These were essentially administrative and financial flaws, completely unrelated to actual “espionage.”

The arrest devastated his reputation and career. He was suspended by MIT and faced a long, expensive legal battle. Yet, after a year of investigation, the case took a shocking turn. In January 2022, the DOJ voluntarily dropped all charges, admitting in court filings that they “could not meet their burden of proof at trial.” This meant they never had any solid evidence to begin with.

Professor Chen’s case is just the tip of the iceberg. During the years of the “China Initiative,” dozens of brilliant scientists experienced similar nightmares. While most cases ended in dismissals or acquittals due to lack of evidence, the process itself created a massive “chilling effect.” It sent a cold signal to all scientists: any academic cooperation with China carries risk. Your academic freedom and right to international exchange must be subordinate to the ever-expanding definition of “national security.” Otherwise, you might be the next Gang Chen.

This movement perfectly illustrates the extension of Mises’ logical chain: when a government begins to restrict the free movement of people and technology for its industrial plans (like surpassing China technologically), those restrictions inevitably evolve into an erosion of basic individual rights, such as the presumption of innocence and academic freedom.

“Environment Remodeling” via the “Twitter Files”

If the “China Initiative” was a “targeted elimination” of specific groups, then the cooperation between the government and social media platforms is a broader “environmental remodeling” aimed at influencing public perception.

In late 2022, the “Twitter Files” exploded in the American discourse. Elon Musk authorized independent journalists to release internal communications revealing how government agencies—including the FBI, DHS, CIA, and even the Pentagon—maintained systematic, daily “cooperation” with platforms like Twitter.

This “cooperation” went far beyond imagination:

• Encrypted, real-time communication channels were established between government agencies and content moderation teams.
• The FBI and others regularly submitted lists of thousands of “problematic accounts,” suggesting censorship, shadow-banning, or outright suspension.
• Government officials pressured platforms to restrict information (such as the Hunter Biden “laptop” story), labeling it as “potential foreign disinformation.”
• Numerous former employees of intelligence agencies moved into high-level “Trust and Safety” roles at Twitter and Facebook, effectively bringing the government’s censorship mindset into private enterprises.

Again, the pretexts were “righteous”—fighting child pornography, counter-terrorism, preventing foreign election interference. But the “Twitter Files” revealed an unsettling reality: the government is using its public power to deeply intervene in an information ecosystem that should be governed by private companies and user communities.

The Retreat of Individual Rights

The “Leviathan”—the absolute power of the state—is waking up. We are seeing individual rights, once considered sacrosanct and enshrined in the Constitution, constantly asked to retreat in the face of “national security,” “industrial competition,” and “public health.”

• Investment freedom must retreat: The government decides your money cannot flow to “strategic competitors,” even if the returns are highest. This violates property rights.
• Freedom of employment must retreat: Tightened H1B visas tell companies they cannot hire a foreigner just because they are better; they must prioritize “domestic workers.” This violates the contractual freedom of enterprises.
• Academic freedom must retreat: If you are a Chinese-American scientist, your international exchange is now subject to FBI scrutiny. This violates the freedom of thought.
• Consumer freedom is hiddenly restricted: When tariffs and bans keep cheap, high-quality foreign goods out, the government is depriving you of the right to buy better things for less money. This violates your right to choose.

This represents a dangerous shift from individualism to collectivism. The foundation of America is the belief that individual rights are natural and supreme, and the state is a tool to protect those rights. But now, a logic of statism is returning, telling you that individual interests must serve the “greater good” of “Winning the competition with China.” When the state tries to become an “Omnipotent God” that plans and defines everything, how much space is left for a diverse society made of individuals?

VI. The Dream of Autarky and the Inevitability of War

When a country completes its transition toward “regulation” and “centralization,” its internal logic inevitably drives it toward two goals: internally, the pursuit of “Autarky” (self-sufficiency); and externally, a slide toward conflict or war.

1. The Economic Mirage: Autarky

“Autarky” sounds like the ultimate form of “strength” and “security”—a country that depends on no one. However, it is a dream built on economic ignorance. It fundamentally violates the most basic law of human prosperity: The Division of Labor and Comparative Advantage.

A heart surgeon could mow his own lawn, perhaps even better than a gardener. But he doesn’t, because spending those two hours on surgery creates far more value than the cost of hiring a gardener. He maximizes his value through “outsourcing.” Nations are the same. Saudi Arabia shouldn’t grow rice in the desert, and Thailand shouldn’t try to mine oil it doesn’t have. They trade, and both sides are better off.

“Autarky” is a mad attempt to move against history. It demands that America be both the heart surgeon and the gardener—designing the world’s best chips while also sewing the world’s cheapest T-shirts. Economically, this is a nightmare:

• You produce things at the highest cost that could have been imported cheaply. Efficiency plunges.
• Without external competition, innovation dies, and technology stagnates.
• Low efficiency and waste are passed to the public as “shortages” and “high prices.” You end up “living the poorest life in the most expensive way.”

2. The Political Urge: Absolute Control

If it’s so foolish, why do governments crave it? Because to a centralized government, “external dependence” is a “lethal threat.” For a quasi-totalitarian regime, predictability and controllability are paramount. To achieve absolute control, it is willing to sacrifice efficiency and prosperity to cut off uncertain external ties.

Today’s “decoupling,” “de-risking,” and “onshoring” are modern variants of Autarky. America is trying to build a closed, parallel “high-tech club” that excludes China. But if this “inner cycle” lacks the lithium, cobalt, or rare earths it needs, what then?

3. The Return of Conflict

When a country follows a path of Autarky that defies economic laws, and finds its own resources cannot support its ambitions, it is left with one last, ancient option: Plunder.

When the “logic of commerce” is replaced by the “logic of security,” war—or extreme pressure backed by the threat of war—becomes the only “international economic policy.” This was the essence of Nazi Germany’s “Lebensraum” and Imperial Japan’s “Greater East Asia Co-Prosperity Sphere.” They told their people: “Our nation is great, but our resources are scarce. We must use the sword to secure land for the plow!”

Mises pointed out in 1943 that the root of the world wars was Economic Nationalism (protectionism and autarky). When nations abandon cooperation for the law of the jungle, war is the inevitable end.

Today, while we might not see a total “hot war” immediately, “alternative wars” are already here:

• Financial Plunder: Using financial hegemony to freeze assets.
• Technological Plunder: Using technical advantages to “strangle” competitors.
• Geopolitical Plunder: Deploying military force to ensure supply chains run according to one’s will.

This is the end of the interventionist chain: a “well-intentioned” domestic intervention eventually drags the entire world into a dark vortex of suspicion, opposition, and conflict.

Conclusion: Will America Become Its Own Former Enemy?

Let us link this chain to the abyss one last time:

1. The Start: Populist labor market intervention (minimum wage, union privileges).
2. The First Domino: Trade protectionism (tariffs).
3. The Second Domino: Industrial planning (The CHIPS Act, subsidies).
4. The Third Domino: Factor control (Invisible walls, investment bans).
5. The Fourth Domino: Price intervention (Direct control of drug and energy prices).
6. The Fifth Domino: Totalitarian tendencies (National security over individual rights).
7. The End: The mirage of Autarky and the inevitability of conflict.

This chain started with a few tariffs and ended with the systemic erosion of liberty. America became a “beacon” because its founders were deeply suspicious of government power. Today, that system is being hollowed out from within.

Is America becoming its former enemy? The enemies it once fought—Nazi Germany, Fascist Italy—were characterized by unrestrained governments, the prioritization of the state over the individual, and a zero-sum worldview. While America hasn’t fully become them, we must be alert to the fact that the ideological viruses that led to their downfall—collectivism, statism, economic nationalism—are re-emerging in the American body politic.

America stands at a dangerous crossroads:

• The First Path: Bravely admit the failure of a decade of interventionism and return to the tradition of openness, despite the pain of structural adjustment.
• The Second Path: Accelerate down the wrong road, using more power to cover old mistakes, until the “Land of the Free” becomes a closed, rigid, and power-dependent empire.

We cannot predict the future. But the wisdom of Ludwig von Mises is like an eternal lighthouse. It illuminates not only the ruins of history but every dangerous fork in the road leading to either slavery or freedom. The course of this lighthouse—America—now moves the fate of the entire world. Will it return to the bright seas of liberty, or sail headlong into the dark vortex called “Serfdom”?

Happy new year, and, we shall wait and see.