Friedrich Hayek’s The Road to Serfdom (1944) is one of the most frequently invoked works when critics warn about government expansion into the economy. Many commentators are already drawing parallels between Trump’s equity stake in Intel and the golden share in U.S. Steel with Hayek’s warnings.
In Friedrich Hayek’s words, once government assumes the power to direct “key” industries, “the planner becomes indispensable,” and the road to serfdom begins to unfold.
Hayek’s Core Argument in The Road to Serfdom
Hayek argued that:
- Central planning – even when intended to solve urgent problems—inevitably requires bureaucrats and politicians to substitute their judgment for market processes.
- Once government takes partial control of production or capital allocation, it cannot help but expand its influence, because the logic of planning demands ever-greater coordination.
- This progression leads down a “slippery slope” toward authoritarianism or what he called “serfdom,” where individual freedom is gradually eroded in favor of collective direction.
He was not saying any government intervention is dictatorship. Instead, his warning was about the cumulative effect of repeated interventions: once governments gain the levers to direct investment, labor, and production, reversing that control becomes politically and economically difficult.
How It Connects to Trump’s Intel Stake and U.S. Steel “Golden Share”
- Intel Investment (State as Shareholder)
By converting subsidies into a 10% ownership stake, the U.S. government has effectively blurred the line between regulator and market participant. Hayek would warn that even a “non-voting” stake risks nudging corporate strategy toward political ends—prioritizing national security optics over profitability or consumer demand. -
Golden Share in U.S. Steel (State as Arbiter of Decisions)
The government’s veto powers over plant closures, relocation, and investment decisions are a textbook case of what Hayek described as “planning by discretion.” While justified in the name of national security and jobs, it places economic decisions in political hands rather than letting competition and prices guide them. -
The Precedent Effect
Hayek stressed that once one sector is subject to extraordinary intervention, other sectors soon follow – especially when framed as “essential” or “strategic.” That slope from limited intervention to broader control is exactly what he feared. -
Erosion of Market Signals
Hayek emphasized the role of prices as information. When government ownership or veto rights distort those signals, resource allocation risks becoming politicized, leading to inefficiency and waste—symptoms he associated with the road to serfdom.
Modern Commentators Using Hayek
- Wall Street Journal (Daniel J. Smith, Aug. 2025) already drew this line explicitly, arguing that Trump’s Intel maneuver is a step in the direction Hayek warned about: well-intentioned “temporary” state control in critical industries that risks entrenching itself.
- Free-market think tanks (Cato, CEI, Heritage) have echoed Hayekian concerns, saying these deals are creeping corporatism—not socialism per se, but a hybrid system where the state and select firms are locked together, which Hayek described as a dangerous middle path that still erodes liberty.
In Summary
Hayek would likely see both the Intel stake and the golden share in U.S. Steel as part of a slippery slope:
- Initial interventions justified by national security or competitiveness.
- Gradual erosion of free-market autonomy.
- Long-term risk of politicizing investment, production, and even labor allocation.
In Hayek’s words, once government assumes the power to direct “key” industries, “the planner becomes indispensable,” and the road to serfdom begins to unfold.
Comparison Table: Hayek’s The Road to Serfdom and Trump’s Industry Interventions
| Hayek’s Argument (1944) | Intel Stake (2025) | U.S. Steel Golden Share (2025) |
|---|---|---|
| Central planning inevitably grows; initial interventions invite further state control. | Government converts subsidies into a 10% ownership stake in Intel, making the state a market participant rather than just regulator. Risk: opens door for deeper involvement in chip strategy. | Government gains veto power over strategic decisions at U.S. Steel. Risk: sets precedent for similar controls in other “strategic” industries. |
| State ownership blurs lines between political and economic priorities, leading to politicized decisions. | Although the shares are “non-voting,” Intel’s investment decisions may increasingly align with government security priorities rather than profitability. | Steel investment and plant operations may be shaped by political goals (jobs, locations) rather than efficiency or market demand. |
| Market prices are the best information system; distortions undermine resource allocation. | Intel’s cost of capital is now partly government-driven, reducing the disciplining role of private investors. | U.S. Steel cannot freely respond to price signals (e.g., by relocating production or downsizing), which may raise costs and reduce competitiveness. |
| Once extraordinary powers are granted, rolling them back becomes politically impossible. | Stake in Intel may be difficult for future governments to divest, especially if presented as a “national security” necessity. | Golden share ensures lasting government influence, outliving Trump and transferring to Treasury/Commerce. Hard to unwind without political backlash. |
| The “slippery slope”: intervention in one sector justifies intervention in others, moving closer to corporatism or authoritarian planning. | Other semiconductor firms may demand similar state backing, locking the industry into partial state control. | Foreign and domestic investors may face new expectations of golden-share style oversight, spreading corporatism beyond steel. |
Analysis
- Intel reflects Hayek’s warnings about state-as-shareholder models, where the appearance of neutrality hides long-term pressures for politicized capital allocation.
- U.S. Steel embodies Hayek’s fear of planning by discretion—veto powers that override market decisions with political ones.
- Both interventions fit Hayek’s pattern of small, justified steps that accumulate into systemic transformation, where free-market signals erode and government influence becomes entrenched.
References
Hayek, F. A. (1944). The road to serfdom. University of Chicago Press.
Reuters. (2025, August 23). Did Trump save Intel? Not really. Retrieved from https://www.reuters.com/legal/legalindustry/did-trump-save-intel-not-really-2025-08-23/
Associated Press. (2025, June 18). Nippon Steel finalizes \$15B takeover of US Steel after sealing national security agreement. Retrieved from https://apnews.com/article/0bda2cf3c6de313206b481be0baf78cb
Smith, D. J. (2025, August 20). Trump, Intel and the road to serfdom. The Wall Street Journal. Retrieved from https://www.wsj.com/opinion/trump-intel-and-the-road-to-serfdom-17b75049