The limits to state capital: on the hubris of state intervention in the age of Trump

State capitalism is no longer the exception – it’s the rule. Across the political spectrum, from left to right, in democracies and autocracies alike, the state has reclaimed a dominant role in shaping economies. Industrial policies and national development plans are now openly embraced, with governments actively steering markets through state-owned enterprises, sovereign wealth funds and state-backed financial institutions. Where direct state involvement is absent, protectionist trade policies and strategic interventions safeguard national industries. This resurgence of state power has fractured the global economy, deepening divides between nations and heightening fears that escalating economic rivalries could spill over into geopolitical conflict. In this commentary, based on a FinGeo-RSA keynote presented at the Regional Studies Association annual conference in May 2025, I examine ideological justifications that legitimize this expanded state intervention, from mission-oriented governance to abundance agendas to conservative industrial policy. Drawing on insights from the liberal tradition – particularly Adam Smith and Friedrich Hayek – I argue that these contemporary frameworks systematically underestimate the knowledge problems inherent in centralised economic planning. I conclude by arguing for renewed engagement with liberal political economy within financial geographical research as a source of analytical scepticism for understanding the limits and possibilities of state intervention.