June 30 was a bad day for Nobel Prize-winning champions of free markets.

That day New York City Mayor Zohran Mamdani recalled Friedrich Hayek's put-down of socialists. Then he clapped back: Socialists, he said, would now solve capitalists' "years of mismanagement." In an interview the same day, Vice President JD Vance dismissed Milton Friedman as irrelevant "in a world where globalized liberalism has become the sort of status quo of American elites."

That a Democratic socialist mayor and a Republican vice president have found common cause disparaging free-market icons heralds the ascendance of what could be called the Horseshoe party.

"Horseshoe theory" describes the tendency of the political extremes to bend toward each other. Coined decades ago to describe the similarities between communism and fascism, today it captures how Republicans' populist wing, typified by Vance, and the progressive left, represented by Mamdani, have drawn closer to each and more distant from the center of their own parties.

Both extremes disdain free markets and globalization while embracing big, coercive government. They are obsessed with identity; the populist right rails against immigration while the progressive left inveighs against "colonialism" and systemic racism. They are populists who see ordinary people pitted against global elites, including their own party establishments.

There's no formal classification for far right and far left. An individual could have views plucked from either, both and in between. Still, convergence is visible in the strange alliances forming across the country:

In the Senate, progressive Sen. Elizabeth Warren (D., Mass.) has teamed up with Republican Sen. Bernie Moreno (R., Ohio) to raise Social Security taxes on wealthy wage earners.

In the House of Representatives, progressive Rep. Ro Khanna (D., Calif.) and libertarian Rep. Thomas Massie (R., Ky.) jointly forced the release of files on Jeffrey Epstein.

Right-wing provocateur Steve Bannon backed Democratic socialists Sen. Bernie Sanders (I., Vt.) and Rep. Alexandria Ocasio-Cortez (D., N.Y.) in their push to stop data centers.

President Trump agreed with progressive Michigan Senate candidate Abdul El-Sayed that the Senate filibuster should be terminated.

The rise of the Horseshoe party is the mirror image of the shrinking political center. Republicans and Democrats long differed on how much to tax, spend and regulate, but generally agreed on the big things such as capitalism and openness to trade; stable political and economic institutions; and support for democracies abroad, including Israel.

That began to change in 2016 with Trump's populist takeover of the Republican Party. Sanders's presidential runs in 2016 and 2020 dragged Democrats leftward and laid the foundation for this year's socialist insurgency.

"Trump has re-educated, or mis-educated a lot of Republican voters into thinking everything is rigged. It's how Bernie Sanders thinks about the economy, " said Andy Laperriere, policy analyst at Piper Sandler. "The foreigners, the big companies, the system, whatever, is ripping us off."

In a recent report, Laperriere noted that many ideas that originated on the left now command considerable backing from Republicans. Limiting drug increases to the rate of inflation, banning large investors from buying single-family homes, raising the federal minimum wage to $15 and capping credit-card interest rates at 10% all command support of around 70% or more, according to polls.

Sanders and Trump have a lot in common. Both are New York-born octogenarians who formed their world views decades ago. Sanders wanted to nationalize oil companies in the 1970s and proposes 50% state ownership of AI companies now. Trump used to call for seizing Middle Eastern oil or being paid to defend it, and just grabbed control of a chunk of Venezuela's reserves. He has taken stakes in numerous companies and discussed doing the same with AI.

Both originally cared more about economics than hot-button culture issues. Their starting positions on immigration, for example, were quite different from where they are now. Sanders opposed a 2007 immigration reform bill as a threat to worker wages; Trump claimed Republican Mitt Romney's tough-on-migrants position helped lose the 2012 presidential election.

That they have since switched sides says less about them than the movements they lead. On the right, immigration and DEI (diversity, equity and inclusion) fire up Trump's base more than tariffs ever did. Vance has gone further than Trump in arguing that religion and national origin, not an idea, are the basis of American identity. "We cannot rebuild Western civilization, we cannot rebuild the United States of America or Europe, by letting millions and millions of unvetted illegal migrants come into our country," he told a conservative audience in early 2025.

Vance has also led the charge against Republican economic orthodoxy. In his recently published book "Communion," Vance writes: "(A)s the decline of Christianity has left us without a shared moral language, economics has stepped into the vacuum...This way of thinking is inherently opposed to the Christian way, which demands more focus on people."

Identity over economics

Socialism is, at its core, about state control of the economy. There are elements of that in the platforms of Sanders and Mamdani, such as replacing private insurance with Medicare-for-all and government-run grocery stories.

Yet it is identity and other noneconomic issues that most divide the far left from the center left. Progressive Lt. Gov. Peggy Flanagan nabbed the Democratic nomination for the Minnesota Senate by attacking her moderate opponent's tough-on-the-border positions.

And then there are Israel and Gaza. In one 2025 poll, 62% of Mamdani supporters called support for Palestinians important to their vote. Some progressive Democrats' skepticism of Israel has echoes on the right, such as from podcast host Tucker Carlson and former Congresswoman Marjorie Taylor Greene.

For all their overlap, the far left and far right will never form a single party. They may agree that identity matters, but disagree vehemently on why. Many of their own policies aren't that popular. Outside of his core base, support for Trump's handling of the economy and immigration have plummeted. Some progressive positions such as abolishing (as opposed to reforming or keeping) immigration and customs enforcement are a turnoff to independent voters.

They are ascendant today because voters are disillusioned with the mainstream parties, especially over the cost of living.

The Horseshoe party will never command a majority of the American electorate. But it can be disruptive enough to deny a majority from the center.

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