Last Monday, a day before the Republican-controlled House passed a resolution condemning socialism, the Pentagon’s Office of Strategic Capital announced that it had acquired a 35 percent stake in North American Blue Energy Partners, one of Venezuela’s largest private oil producers.
Under the agreement, the Venezuelan government grants the company a century-long lease on several oil fields. Additionally, this arrangement gives the US government veto authority over the selection of members for the company’s board of directors, effectively allowing the US to control the firm’s leadership.
This deal aligns the US with the Venezuelan government led by Nicolás Maduro, who was ousted by the US military earlier in January. It is the same administration criticized as socialist by American politicians from both major parties and targeted by US-backed regime change efforts ever since Hugo Chávez took office in 1999. One such unsuccessful attempt occurred during President Trump’s initial term.
It might seem paradoxical that the Trump administration forms an alliance with a socialist government, especially considering President Trump’s frequent warnings about socialism gaining ground within the Democratic Party. While Trump may genuinely oppose certain aspects of socialism, he strongly advocates for corporatism—a system where private enterprises are under government control despite retaining a private label.
Since his return to office in 2025, President Trump’s administration has “invested” in more than 30 private firms. Such government involvement in private companies distorts market dynamics by pushing business leaders to prioritize pleasing politicians and bureaucrats instead of customers. It also prompts other companies to focus on securing government backing rather than attracting consumers and private investors. This form of corporatism may even lead officials to favor decisions that maximize government returns on these investments.
The combination of corporatism with interventionist foreign policies produces particularly damaging consequences, as demonstrated by the US partnership with Venezuela’s government. Many Venezuelans oppose this arrangement, and if a new administration replaces the current one, it might attempt to cancel or renegotiate the agreement. Consequently, the US now has a vested interest in ensuring the continuation of Hugo Chavez’s successors in power. Future US military interventions in Venezuela could thus involve defending the socialist regime.
Continued US investment deals with foreign governments risk necessitating military deployments abroad to safeguard these holdings. The US might even employ its armed forces to pressure nations into doing business with its government.
President Trump’s blend of big government and big business serves the wealthy and connected elites while disadvantaging the broader population. When combined with intervention abroad, corporatism benefits corrupt and authoritarian leaders and fuels the military-industrial complex. Because corporatism masquerades as capitalism—and its advocates often foster this confusion—it becomes easy for socialists to blame capitalist failures on the free market. Proponents of free markets need to oppose Republican corporatism with as much vigor as they challenge Democratic socialism.
Original article: ronpaulinstitute.org
About the Author
