Who’s afraid of Bernie Sanders?

RASHMEE ROSHAN LALL February 24, 2020

Democratic presidential candidate Senator Bernie Sanders holds a campaign event at La Poste in Iowa this week. Chip Somodevilla / Getty Images

After Nevada, it’s time to get serious about Bernie Sanders’ Democratic Socialism. How does it differ from social democracy? And is Mr Sanders a menace to America?

There are two possible answers. One, was delivered after the Nevada caucuses by Pete Buttigieg, Senator Sanders’ rival to be the Democratic Party’s nominee for president. Mr Sanders, he said, leads an “inflexible, ideological revolution” and is a threat to any hopes of defeating Donald Trump on election day, November 3.

The second is offered by economics professor Daron Acemoglu of MIT, who co-authored Why Nations Fail: The Origins of Power, Prosperity and Poverty, among other books.

Both answers set little store by Mr Sanders’ political prescriptions for 21st century America but Professor Acemoglu’s analysis should be more illuminating because it goes beyond mere political rivalry.

Except that it’s not. The Professor talks up the market, arguing with a passion for its logic. While he doesn’t exactly recommend the small-state free-marketeering of Margaret Thatcher and Ronald Reagan, the Professor does seem deeply suspicious of those who see government as a necessary actor if inequality has to be stemmed.

The Professor argues that Mr Sanders’ Democratic Socialism is “an ideology that regards the market economy as inherently unfair, un-equalizing, and incorrigible (and) its solution is to cut that system’s most important lifeline: private ownership of the means of production”. This, he says, will not solve America’s “structural economic problems”.

The Professor’s argument is simple. The momentum for Mr Sanders comes from a yearning for radical solutions after four decades of lacklustre productivity growth and the iniquitous sharing of economic gain. An increasing share of wealth in America is going to owners and the highly educated. Median wages have stagnated and (real, inflation-adjusted) wages of workers with a high-school education or less have fallen. As the Professor says: “Just a few companies (and their owners) dominate much of the economy. The top 0.1 per cent of the income distribution captures more than 11 per cent of national income, up from around just 2.5 per cent in the 1970s”.

This makes America’s situation very different from the decades after World War II, when, the Professor, its “economy became steadily more productive, and wages for all workers – regardless of education – grew by over 2 per cent per year, on average.”

Even so, the Professor argues that Mr Sanders’ Democratic Socialism is not the answer. This because it is not like social democracy and wants to supplant the market economy rather than to regulate it. He admits that the US needs “effective regulation to rein in concentrated market power” and that American workers need a voice, public services and a stronger safety net. But , he still insists “the market must be regulated, not sidelined”.

The argument would have been worth considering on its merits except for the increasingly obvious desire in the US (and the UK too, not to speak of Poland, Hungary and other European countries) for government intervention to help the “left-behind” and to “level up”.

Finally, of course, it’s moot point if anyone – even a Democratic Socialist President – would be able to fully implement his agenda considering the checks and balances in the US system. For all Donald Trump’s breaking of norms, crossing every boundary he can, refusing to subject himself to Congressional oversight, and arrogation of power, he too has not been able to do all that he wants. (Yet). President Trump, incidentally, is intervening in the economy too but not to level up, so much as to up the levels of inequity.

A vote for Sanders and Democratic Socialism won’t mean the end of America as we know it. The alternative might.