On a crisp spring morning, the head of the world’s most advanced automotive manufacturer entered the West Wing. An immigrant, the CEO was still amazed that someone born half a world away could meet one-on-one with the President of the United States to discuss a matter of national importance: reforming the federal government, particularly its procurement process. The President — consumed with authoritarian threats abroad and judicial resistance to his reforms at home — had brought him and other business leaders like him into government service to fix broken systems and chart a better course. The political backlash was immediate, with many deriding the executives as oligarchs cloaked in patriotism.

The year was not 2025. It was 1940. The CEO was the Danish-born American William “Big Bill” Knudsen, the head of General Motors, and his compatriots were senior executives from America’s industrial giants. Known as “dollar-a-year men” for their nominal salaries, these figures entered government at President Franklin Roosevelt’s request. For all their failures and failings, they played a pivotal role in preparing the nation for war and ensuring that America was the dominant power for the remainder of the century.

We live in a moment when business leaders and technologists yet again feel compelled to enter public service. History is not destiny and the business class playing a key role in strengthening the nation in one era does not necessarily mean that it will in another. But history is informative and studying the successful collaboration between free enterprise and government in earlier eras will help us understand how it may be essential again in this new moment of crisis.

Aligning country and capitalism to meet an existential threat 

Today, the idea of industry closely aligning with government to achieve essential national goals appears not only absurd, but heretical. We came of age during a false “end of history,” a unipolar moment where the public and private sectors saw their labors as wholly distinct, creating a functional separation of Enterprise and State. This divorce was possible because we had no real rivals. At the end of the Cold War, the Greatest Generation’s final gift was to leave us as the world’s sole economic and military superpower. We lived off this inheritance for decades, drawing down on it whenever our business leaders profited without thought of the national interest or political leaders achieved electoral success without effectively governing. 

That inheritance is gone. That era is over. We have reentered a period of great power conflict. The winner of this conflict will shape the future of humanity for the remainder of the century and perhaps longer. Our rival great power is the People’s Republic of China and, to a lesser extent, its chief authoritarian allies. China’s paramount leader, Xi Jinping, has openly stated that the Chinese Communist Party’s (CCP) goal is the end of U.S. primacy and the creation of a new authoritarian-friendly world order with Beijing at its center.

As an authoritarian ruler, Xi has marshaled all aspects of national power to achieve this singular purpose. When great powers compete, military might is a necessary but alone insufficient means to prevail. All other aspects of national power — including corporations and other market actors — must be harnessed to this singular purpose. China understands this foundational concept and has for decades incorporated it into their grand strategy. Rather than profits, their companies’ “primary goal is to capture market share and thereby damage advanced economies and pave the way for China to become the world’s pre-eminent superpower.”

While centralized control has many drawbacks, it offers one critical advantage: coordination. Like Germany’s state-industrial model from the late 1800s through World War II, the CCP mobilizes society to dominate sectors it deems vital — ranging from strategic industries like steel to seemingly peripheral ones like Vitamin C. This truth is not only uncontroversial but openly acknowledged by the CCP. In a little-noticed anti-dumping case that reached the Supreme Court, the Chinese government admitted in official filings and sworn affidavits that it exercises “government control designed to cause certain important Chinese industries to operate in a coordinated fashion in order to insure their stability and further their profitability.”

In economic warfare, the CCP sees bankrupting an American company as equivalent to destroying a military installation, and collapsing an entire U.S. industry the same as winning a military campaign. The sharpest edge of this campaign is the deployment of China’s national champions like Huawei, ZPMC, and BYD. Like all Chinese companies, state owned or otherwise, they are subject to CCP control. Chinese law mandates cooperation with state security services, while internal Communist Party cells ensure compliance. Defiant executives risk severe consequences, including disappearance. These firms are charged with displacing competitors in every major market. To that end, they receive the full backing of the Chinese state — from subsidies to cyberespionage and lawfare — which in turn allow the companies to engage in predatory pricing, intellectual property theft, forced technology transfers, and economic coercion.  

Over the past three decades, American businesses have learned a hard truth: no company can stand against a superpower. When Beijing targets a corporation or industry, the U.S. private sector alone cannot match its scale, staying power, or strategic patience. The result is predictable — market share erodes, capital dries up, and, eventually, a Chinese national champion takes its place. This has happened time and again, from shipbuilding to solar panels, rare earth processing to legacy semiconductors.

While China’s approach has caused it growing macroeconomic harm, its coordinated destruction and replacement of American companies and entire U.S. industries leaves a pressing question: how should America respond to this whole-of-society threat while still maintaining the principles of limited government and free enterprise responsible for its remarkable innovation and prosperity?

The forgotten lesson from our history 

The answer lies in our history, bringing us back to Knudsen, the “Great Dane” that Arthur Herman lionized alongside other captains of industry in Freedom’s Forge. Knudsen, who rose from immigrant factory worker to General Motors CEO, was a genius at mass production. In 1940, President Roosevelt called on him to lead the prewar mobilization effort. Knudsen, who deeply loved his adopted country, accepted the offer, playing several formal and informal roles. His story serves as a blueprint for national mobilization through capitalist means.

Knudsen understood that the power of American industry had to be catalyzed, not commanded. He asked his peers in the private sector for assistance. Most were ideologically aligned, but hesitant due to practical economics. No company could support a war effort at scale if doing so would quickly result in bankruptcy. Knudsen believed in both democracy and capitalism — and understood that the power of the latter was essential to preserving the former. Looking at the incentives in the defense industry, he knew that the system had to change. Procurement rules capped profit margins and disincentivized private investment. Knudsen famously urged Roosevelt to fix this through incentives, not threats, stating: “The government can’t do it all. The more people we can get into this program, the more brains we can get into it, the better chance it will have to succeed.” While some New Dealers viewed such reforms as apostasy, Roosevelt adopted them.

Both Knudsen and Roosevelt — the leading voices in American enterprise and politics, respectively — grasped a deeper truth: in moments of existential danger, free enterprise and government must function symbiotically. What the government requires of industry is a commitment to a shared mission: a recognition that enduring profit depends on America not only surviving but thriving. What industry requires of government is an alignment of incentives so that those who share this mission at least have an opportunity for greater profit than those who do not. Both must remain vigilant against corruption and self-dealing.

America has learned and forgotten this lesson in voluntary coordination many times. During the American Revolution, citizens boycotted superior British goods, while the Founders — many among the richest men on the continent — risked everything by signing the Declaration of Independence, “mutually pledg[ing] to each other our Lives, our Fortunes, and our sacred Honor.” At the dawn of the Cold War, U.S. leaders recognized that military power alone was insufficient and that, to win, America “must lead in building a successfully functioning political and economic system in the free world.” During the Space Race, Washington harnessed the full power of government, industry, and academia to surpass Soviet capabilities. The result was not just a moon landing, but a wave of innovation that secured American technological leadership. In each case, the United States triumphed not by dividing capitalism from democracy, but by aligning both toward a common cause.

Five steps for assuring an American industrial renaissance 

It is time for America to adapt this time-tested lesson to today’s challenge — one both political parties rightly agree is our next great geopolitical test. Our adversary depends on a divided America, picking off leaders in government and business one by one. What China fears most is the resurgence of American industry and a nation not just alert to the threat, but united in action.  Achieving this will require decisive steps. 

First, America must rebuild its industrial base by investing strategically in sectors vital to national power and prosperity. China currently leads the United States in “37 out of 44” critical technologies, from 5G to electric batteries. To reverse this trend, Washington must incentivize private industry to invest heavily in these fields through grants, tax breaks, regulatory relief, and other tools of statecraft. Though some may dismiss this as nostalgia for a bygone industrial era, America remains the world’s second-largest manufacturer despite lacking any industrial policy. Moreover, our rapid scaling of N-95 masks production and breakthrough mRNA vaccines — despite a pandemic and supply chain breakdowns — proves that American industry can still deliver at speed when properly incentivized. Once market leaders emerge, the United States should ensure a level playing field abroad through diplomacy and trade enforcement. In return, these firms must understand they play for a team — the United States and its allies. Dealmaking that undermines U.S. interests or empowers rivals cannot be tolerated. To unlock private capital investment at scale, Washington must also send clear, nonpartisan demand signals that have longevity beyond any one election or administration. While that may seem unlikely, signs of emerging consensus are already visible. Both the Trump administration and leading Democratic voices, for instance, have called for dismantling the legal morass that hinders construction and yields absurd outcomes.

Second, the United States must defend its markets from predatory practices by rival powers. This means extending existing restrictions on Chinese firms like Huawei and BYD to any state-backed national champion operating in strategic sectors and benefiting from intellectual property theft, lawfare, or covert state support. Washington’s earlier failure to act enabled Beijing to cripple the U.S. green tech industry in the 2010s, with other sectors now at risk. One option is for Congress to expand the use of trade remedies that allow the exclusion of imports tied to unfair trade practices. The administration should also accelerate its review of transnational subsidies under the America First Trade Policy while boosting enforcement resources at the Departments of Justice and Commerce. We should reinvest revenues from tariffs and penalties into American workers to ensure our labor force is equipped to compete — and prevail — in the industries of the 21st century.

Third, as in Knudsen’s era, the United States must reintroduce market principles into its defense industrial base. As Chairman of the Joint Chiefs General Dan Caine recently testified, the current “acquisition process and Defense Industrial Base… does not have the throughput, responsiveness, or agility needed to deter our adversaries.” Today’s defense procurement is a centrally planned rather than market-driven system. Its laws and procedures remain rooted in discredited top-down management theories that defense expert Bill Greenwalt noted “were once fashionable in the Soviet Union and at the vanguard of the 1950s U.S. auto industry before it was outcompeted by Japan in the 1970s.” Reforming this system is not optional — it is a national security imperative. At present, China — which, ironically, allows greater free market competition and commercial innovation in its defense industries than the United States — can make 359 ships for every one that America manufactures. Absent fundamental changes, this production disparity across defense industries risks America losing the next prolonged conflict because we quite literally will run out of munitions. Congress and the Pentagon must re-open the defense industrial base to broader commercial participation. That means replacing cost-plus contracts with fixed-price, merit-based alternatives; shifting from program-based to portfolio-driven acquisition; and expanding funding for iterative prototyping and field experimentation — the very reforms that once secured American victory in the last great power war.

Fourth, the United States must adopt a diplomatic strategy that reinforces alignment of capitalism and democracy abroad. That begins with building a coalition of allies to counter China’s neo-mercantilist practices and national champions that distort global markets. Washington should be clear: nations seeking open and unfettered access to the U.S. market must commit to the rules of the liberal economic order — open competition, transparent governance, and the rejection of authoritarian economic models — and agree to similar policies that prevent CCP predations in their own borders. Reforming onerous export controls is also essential. It is unacceptable that our friends may turn to our enemies to arm them because our export approval process is measured in years rather than months. Any export destined for a trusted ally — especially one insulated from Chinese economic coercion — should be fast-tracked for approval. America’s defense partnerships would thus function not only as a shield but also as a magnet: attracting nations to its orbit through access to advanced capabilities and credible support. In addition, the United States must accelerate global adoption of its technological ecosystem, particularly in AI. Countries that fall under China’s digital sphere will not merely risk surveillance. They will operate behind a “Silicon Curtain” that obscures the truth and rewrites history. Allowing a future where most of humanity has forgotten the tragedies of 20th-century communism — or, worse, comes to view authoritarianism as a superior model — would be a strategic and moral failure from which we may never recover.

Finally, we must understand that, far from being an aberration, collaboration between democracy and capitalism in pursuit of national objectives is deeply embedded in the American tradition. Those who hold great wealth that are appointed to political power should be held to a high standard, but scrutiny cannot slip into reflexive scorn. Periods of national peril demand virtuous coordination between the stewards of state and industry. As the so-called Davidson Window suggests, the United States is either in or fast approaching such a moment. Rejecting the fusion of public purpose and private capacity not only defies history — it invites failure. To attempt deterrence with one hand tied behind our back is not virtue. It is strategic malpractice.

A dynamic future

Some contend that we are entering a second Gilded Age — an era where powerful industrialists hold undue sway over government. But the stronger case may be that we are exiting such a period. Like the original Gilded Age, the post-Cold War era was defined by a profit-above-all mentality and a fixation on electoral rather than national success. If that age is ending, America stands at a turning point where it can harness the dynamism of free enterprise toward national renewal.

Our history shows that when capitalism and democracy work in concert, America achieves extraordinary feats. It is time to do so again, summoning the full strength of a united republic to meet the defining challenges of our time.