@graydon

Mostly because the majority of people in the USA have no idea what words like ‘communism’, ‘capitalism’, ‘democracy’ and ‘republic’ mean.

The USSR was probably a communist state for about a week (being generous), but was held up for decades to the USA as an example of what communism looked like (whether a stable communist state with more than about 500 people in it is possible remains an open question). The biggest difference between the economies in the USSR and the western world was that the USSR was a centrally managed economy, whereas the rest of the world relied on markets.

In a centrally managed economy, a single controller is responsible for creating a plan for economic output and defining what factories should be built, what skills people need to be taught, what supply chains look like, and so on. In a pure market economy, all of these decisions are local and you rely on emergent properties to generate a globally efficient system.

In theory, a centrally managed economy can be more efficient because it can avoid duplication of effort. In practice, it suffers from incomplete information and is slow to adapt (most attempts to build one have involved famines. It turns out they’re a really bad idea). Conversely, markets are staggeringly good at optimisation, but will often end up optimising for the wrong thing, and tend towards monopolies.

Both models are pretty bad in their pure forms. In practice, most countries now adopt some hybrid approaches. China is the closest to a centrally planned economy (all companies are partly state owned and the state intervenes in markets a lot), whereas the USA has traditionally been the closest to a pure market economy (though not actually very close). Interventions in markets come in a variety of forms. The most common form in the USA is for the government to act as a guaranteed customer for some product. In the EU, it tends to be weighted more towards regulation or nationalising critical industries. In China it tends to be a lot more direct. All use various forms of direct and indirect subsidies.

It is quite misleading to call any of these ‘communism’. A communist society could (theoretically) exist at either extreme, with worker-owned cooperatives using markets to distribute resources between them, or by coordinating directly via representatives or direct input to drive a centrally planned system. A capitalist society requires some form of markets, but markets have a number of failure modes and are not self-sustaining (without intervention, markets tend towards monopolies, which are a form of central control without any accountability) and so capitalist societies end up somewhere in the middle (pure capitalist societies decay towards feudalism without regulation).

If you need a label, Mussolini had one: He described the merger of corporations and government as ‘fascism’ (and thought it was a good idea).

That said, a 10% stake in a company is a long way from the merger of corporations and government. Most countries are realising that almost all modern infrastructure depends on computing and having a supply of processors that a potentially hostile government can’t control is important. The CHIPS act was largely propping up Intel. They have been staggeringly badly managed for 15-20 years, and without them it’s not clear how much chip manufacturing would be done in the USA (the DoD owns a fab for really critical things, but it’s a very old process).

If anything, it was quite surprising that the CHIPS act invested so much in Intel without taking any ownership. It’s not unusual for a government bailout of an industry to come with that kind of condition. The British government, for example, ended up owning a bank after the 2008 financial crisis. Typically in a mostly capitalist society, the goal is to get the company into a state where you can sell it and recoup the cost of the initial subsidy. In some cases, it will never be profitable but its existence improves the rest of the economy and generates more tax revenue than the company’s losses (public transport typically falls into this category) and so it makes sense for it to remain in public ownership.