With 2026 marking the 250th anniversary of both the American Revolution and Adam Smith's Wealth of Nations, it is worth remembering the role the East India Company played in both. It was the Company's monopoly on legal tea imports to the colonies that helped spark the Boston Tea Party, and much of Book IV of Smith's work is devoted to a devastating critique of the Company, particularly the perverse incentives created by its structure as a public-private hybrid.

This is not merely a historical curiosity in this semiquincentennial year. Today, public-private hybrid companies are a favored tool of industrial policy on both the nationalist right and the progressive left. Proponents argue that public ownership stakes in strategically important firms can harness private enterprise for public purposes. Whether it is the Trump administration's equity stakes in firms such as Intel or Senator Sanders's proposal for a public sovereign wealth fund to acquire 50 percent ownership of leading AI companies, the intent is the same. Yet Smith's warnings about the East India Company should remind us that this arrangement is bad for commerce, bad for government, and bad for constitutional accountability.

"Sharing the Gains"

What Trump and Sanders have in common is that neither is calling for outright nationalization in the public interest (although Ezra Klein has done so, proposing a "public option" large language model). Instead, they favor different mechanisms for embedding public power within private enterprise. Both cloak the idea in the language of "sharing the gains," but both are equally clear about the importance of state direction. Intel's own press release described the equity stake as an $8.9 billion government investment tied to "key national priorities." Sanders says his public ownership model would "give the public a direct role in determining the future of this technology."

Smith's indictment of the East India Company focused heavily on its role as the governing power over large parts of India. The Company possessed territorial authority, military power, the ability to raise taxes, and political protection at home. At the same time, it distorted trade, prices, and capital allocation throughout Britain. In many respects, the Company's vices stemmed from its position as an arm of the British state.