The Economics Of Bernie Sanders

Tyler Durden's picture

Submitted by William L Anderson via The Mises Institute,

As the political campaign of Hillary Clinton continues to run aground, Democrats are flocking to the campaign of Bernie Sanders, the self-described “socialist” US senator from Vermont, who has been a fixture in that state for more than three decades. Not unlike the presidential campaign of Ron Paul, Sanders is drawing large, enthusiastic crowds who are very receptive to his message of increased state control of the US economy.

Obviously, when a person running a campaign based upon socialist principles is drawing attention and big crowds, we might ask just what does Sanders mean by “socialist,” and what would he do if he were elected president of the United States? To better answer that question, I am taking a closer look at what we would call the “economics” of Bernie Sanders.

What Do We Mean by “Socialism”?

Before looking at Sanders’s platform, however, I believe it is important to note that when socialists speak of “victories” in the economy, they are not talking about actual results, but rather political achievements in the forms of laws being passed that mandate certain policies. Whether or not these policies actually achieve what socialists claim will be accomplished is another story altogether, but results are irrelevant to socialists.

This should surprise no one because, after all, socialism is based upon political control of the economy. True (or at least original) socialists believe that state agents via the “magic” of their authority should allocate all resources to where there is the greatest need for them. Political representatives, not surprisingly, determine what constitutes the greatest need. The state would take ownership of all factors of production and then wisely determine the needs and how production of goods would fulfill them.

Ludwig von Mises in 1920 in his short work, Socialism (three years later expanded into a book), exploded the socialist myth by pointing out that in a world of scarce resources, economies needed private ownership, prices, profits and losses to determine where resources should be directed. The early years of the “experiment” of the Soviet Union proved Mises correct, and socialists then sought to redefine what socialism actually meant.

In the USSR, and later in China and North Korea, the state took ownership of factors of production, but tried to create a parallel economy by using shadow prices and production functions via the mechanisms championed by Polish communist Oskar Lange, who admitted that Mises had pointed out serious flaws in the original plans of socialists. We also know how that “experiment” turned out, which is why there no longer is a USSR, China has abandoned much of the economics of Mao, and North Korea is a failed state where most people live in grinding poverty.

But people like Bernie Sanders, while maybe not rejecting the old socialism spiritually, nonetheless have embraced a “socialism” in which government takes ownership of large portions of what has been produced by private enterprise and transfers wealth from one group of people to another. A look at the Sanders website spells out his brand of “socialism” that he says is based upon what Nordic countries like Sweden, Denmark, and Norway have done, levying high taxes with governments using that funding for social programs like medical care and other public welfare initiatives.

Secondary Socialism

A number of people have pointed out that the Sanders “program” is not socialism per se, but rather is something based upon socializing the results of private enterprise, or what one might call secondary socialism. The Bernie Sanders regime would take control of some of the produce of private enterprise, as opposed to taking outright control of factors of production, which would remain in private hands. If this reminds one of the fascism of the 1930s, that is because Sanders is promoting a version of the governing models of Germany under Adolph Hitler and Italy under Benito Mussolini.

Of the two, Sanders certainly is closer to Mussolini. Like Sanders, Mussolini called himself a socialist and was a leader in the Italian Socialist Party. Like Sanders, Mussolini decried “profiteers” and the wealthy, and spoke out against political corruption. Like Sanders, Mussolini spoke of a larger “national purpose” and sought to harness nationalism as a political force. Like Sanders, Mussolini sought to impose more and more controls on Italian businesses in order to direct production in a way to satisfy political purposes. Like Sanders, Mussolini built political power by appealing to Italian voters by saying that other Italians were well-off because they had gained their wealth on the backs of the poor.

Having similar economic proposals to Hitler and Mussolini does not make Sanders either of those two men and it is important to emphasize that while Sanders regularly employs the powerful political tool of appealing to voter resentment of others, he is not advocating the kind of genocide that ultimately helped to characterize the fascism of Central Europe in the 1930s and 40s. Bernie Sanders is an economic nationalist, and economic nationalism was at the heart of European fascism, but we do not want to make unwarranted accusations against Sanders, either.

At the same time, I do not want to let Sanders off the hook. He promotes economic nationalism and has built his campaign upon resentment, the kind of which Henry Hazlitt wrote in 1966 in his famous, “Marxism in One Minute.” Hazlitt wrote:

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. (Emphasis mine)

As one moves through the website for the Sanders campaign, there is plenty of resentment for others. First, there is the ubiquitous “One-Percent” that is the main focus of the typical Sanders stump speech:

This campaign is sending a message to the billionaire class: “you can’t have it all.” You can’t get huge tax breaks while children in this country go hungry. You can’t continue sending our jobs to China while millions are looking for work. You can’t hide your profits in the Cayman Islands and other tax havens, while there are massive unmet needs on every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America, if you refuse to accept your responsibilities as Americans.

While I would agree wholeheartedly that the US economy is in serious trouble, it is not because of the “greed” of billionaires. It is because the US government, through the Federal Reserve System, has created what David Stockman has called the “casino economy” that has substituted trading of sovereign debt and monetary manipulation for a real economy with interest rates that reflect actual economic fundamentals. Like the Bush and Clinton administrations before it, the Obama administration has promoted political entrepreneurship and demonized market entrepreneurship.

Sanders’s List of Recycled Twentieth-Century “Solutions”

Americans are not jobless because some people are not paying “their fair share” of taxes; they are jobless because the US government insists on directing resources from higher-valued uses to lower-valued uses, as determined by consumer choice. They are jobless because Washington insists on remaking the economy in its own image, and there is nothing in the entire Sanders campaign that would change any of the things that vex the US economy the most.

So, what does Sanders propose to “revitalize” the US economy? Here are some things listed on his website:

  • Raise taxes on US corporations (ironically, corporate tax rates in the Nordic countries are substantially lower than current corporate taxes in the USA, something that has escaped Sanders’s notice);
  • Raise the minimum wage to $15 an hour;
  • Expand the reach of labor unions and vastly expand their membership;
  • Make it illegal for US corporations to manufacture goods abroad, and then sell those goods in the USA;
  • Impose new taxes on financial transactions;
  • Spend at least a trillion dollars on building and repairing roads, bridges, and utilities;
  • Create a “youth jobs program” in which unemployed young people are given government-sponsored jobs (Sanders sees no connection between high minimum wages and youth unemployment);
  • Enact “equity pay” that will “guarantee” that women are paid the same as men for comparable work;
  • Break up banks and financial institutions;
  • Enact a Canada-style single-payer healthcare system;
  • Provide free tuition for all public colleges and universities;
  • Expand Social Security benefits;
  • Require businesses to provide 12 weeks of paid family and medical leave, at least 10 days of paid vacation a year, and seven days per year of paid guaranteed sick leave.

Notice that there is nothing in the Sanders platform that calls for “nationalization” of the means of production, nor does he propose to do away with the price system. In other words, Sanders’s vision of socialism is not what Mao or Trotsky or Lenin proposed, yet there is not one thing in the entire platform that would reverse the dangerous economic trends of the past decade.

Instead, Sanders proposes to direct huge amounts of resources in the direction of constructing something akin to a European welfare state. To put it another way, Sanders wishes to “turn back the clock” to create or promote social and economic structures that already have been undermined by the modern “sharing” economy.

If one reads Sanders’s platform from another perspective, it would be the New Deal. Indeed, there is nothing Sanders has written or said from the stump that would not be reminiscent of a New Deal rally (with the possible exception in appealing to black Americans, which was not part of the Democratic Party agenda in the 1930s, as well as Sanders’s appeal to furthering the Sexual Revolution). Bernie Sanders pushes an economic agenda that is frozen in time.

The problem, economically speaking, is that Bernie Sanders proposes nothing that actually would enable entrepreneurs to help bring about a true economic recovery. In Sanders’s world, entrepreneurs are parasites and employers are oppressors who seek to harm their employees, and wealth is defined by how much governments have in their treasuries.

If I could put the economics of Bernie Sanders into a nutshell, it would be this: Burden private enterprise with one directive after another, and then demonize it when it ultimately falls down under the awful weight of taxes, higher costs, and mandates. While many people believe that instituting the Sanders economic agenda would help turn the USA into another Sweden or Denmark, the more likely outcome would be turning this country into another Venezuela.

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tgatliff's picture

Like it or hate it, at least the guy is honest about what he wants to do.  The current politicians are raping and pillaging the people and are not honest enough to openly admit it.

nuubee's picture

Hitler was also very honest about what he wanted to do. The west simply did not believe he would actually be in a position to do those things.

knukles's picture

Obama was pretty honest about it and's a commie, just like Bernie.  Bernie at least admits it!

tgatliff's picture

Exactly.  Bernie openly admits hes a true socialist.

TBT or not TBT's picture

To knuckles.  Bernie is a nationalist.   Obama isn't.   

realmoney2015's picture

No, Bernie is not honest. He worked with Ron Paul to get a real audit of the Fed, then screwed Ron and America over and watered the bill down.

http://popularliberty.com/7697/ron-paul-flashback-bernie-sanders-watered...

Son of Loki's picture

Mericans are Broke Donkeys Bernie. I'm not voting for another Democrat. I can't afford it.

lordylord2's picture
lordylord2 (not verified) Son of Loki Sep 1, 2015 5:56 PM

FREE EVERYTHING!!!

But seriously, Sanders and his supporters makes me sick.  Any on this board?  Please, tell me how much I earn belongs to you and why. 

flysofree's picture

You have nothing anyway. You are really no differnet than a ghetto nigger. There are only two types of people: the super rich and the ghetto poor.

lordylord2's picture
lordylord2 (not verified) flysofree Sep 1, 2015 6:15 PM

^ Nominated for most retarded post of the year. 

Theosebes Goodfellow's picture

So Bernie want even bigger government. But I bet he can't answer this:

How big is "big enough"?

How intrusive is "too intrusive"?

Because the bigger government gets, the smaller my rights become. And right now my rights are feeling pretty effin' tiny.

Macchendra's picture

A government is too intrusive when it thinks it can criminalize marijuana or legislate morality.  Thank god for the only candidate from either major party who supports neither.

Theosebes Goodfellow's picture

Marijuana is a minor issue in the discussion of government. It rules your life, Macchendra, and so because of this for you it is tantaumount. The question of legislating morality is much more complex. Learning to act ethically is much more fundamental to a human's inate nature. Not all cultures teach or require this. The level at which it is attained dictates how far a person can understand. Wisdom is not a skill. It's a gift.

detached.amusement's picture

Wisdom is not a skill. It's a gift.

 

 

since we're on about nominating most retarded lines...*facepalm*    gifted, ffs? you dont get gifted that, you moron.

Jonathan Livingston Phallus's picture
Jonathan Livingston Phallus (not verified) lordylord2 Sep 1, 2015 7:24 PM

I think some people just find the idea of people dying on the streets as people with more money than they could spend in a year drive by to be a bit absurd.

Of course - you shouldn't be taxed at all because you've never benefited from government or taxes at all - right?

Tell me how any other candidate is better.

Teh Finn's picture

I'd love to see your annual charitable donations line.

It ain't charity or moral when it is mandated, under threat of mortal force.

NumNutt's picture

Tell me one damn American city that people are dying in the streets from starvation? Or any other natural causes. I have traveled outside the US and have seen actual people dying on the street in a third world country. No US city even comes close to that situation. If people are in the streets homeless in the US it is by their own stupid decisions, no one elses fault. Now go fuck yourself.

PrintemDano's picture

Jonathan can't answer any of your questions seeing as he is an ignorant bleeding heart liberal who feels he should get to decide how much is enough.  Jonathan, listen to NumNutt,   Go Fuck Yourself, and take Bernie Sanders with you.

Falling Down's picture

I once askwd a socialist who'd retired from NY State why the ghetto scum don't clean up their neighborhoods. Got a similar response, a typical "ypu're so stupid for asking such a question", one. This was in the summer of 2000, when supposedly the U.S. economy was on a tear (right before it wasn't).

This useful idiot then gave the standard, seemingly canned response, "But Falling Down, they're starving". What a fuckin' retard. Complete with the emotional manipulation any typical lefty uses to try to drag people into their miserable worlds.

Victor von Doom's picture

All Liberals be like pre Soviet Era "useful idiots" that we move to Gulag AFTER Revolution, to continue be useful! Da?!

"My greatest flaw. I surround myself with idiots."

- Victor von Doom 

Theosebes Goodfellow's picture

~"Tell me one damn American city that people are dying in the streets from starvation? Or any other natural causes."~

Patience, my friend. Patience. The dark horse this way rides. What was the old adage about for whom the bell tolls?

ClowardPiven2016's picture

I agree with you...but only the part about all other candidates being full of shit too.

goose3's picture

Here's how the new simplified Sanders-based IRS form will work:

 

Line1:  Tell us your income

 

Line 2:  Send it all in

Ballin D's picture

And Obama wasnt honest either.  He switched his position on gay marriage a total of four times! He kept talking about helping the little guy while running over the middle class. His lies on the economic condition of the US. The whole "most transparent administration in history" lie. My insurance premiums damn near doubled from ACA. The list doesnt end.

 

An obvious liar is still a liar.  He was not 'honest' as you said - even if the smart people knew what he was going to do.

PrintemDano's picture

He also said he cared about all americans when all he cares about are blacks, liberal violent blacks.

AmericanFUPAcabra's picture

They have faired far worse under his terms than those before him.

PrintemDano's picture

The violent ones are doing just fine.

detached.amusement's picture

you know damned well that the only things obama gives two shits about are his wookie and 2 wooklets

Dick Buttkiss's picture

Bill Anderson:

From your neighbor (formerly) on Cinderella, just down the street from where you grew up (last saw you maybe ten years ago as you drove by):

Wonderfully said.

Keep it up.

Meanwhile, the state can kiss my ass.

rubiconsolutions's picture

Socialists like Sanders are fine with exacting violence by proxy but don't have the courage to do it themselves. A president Sanders wouldn't personally steal or kill you but he would have his thugs do it. That's a coward. To all these Sanders supporters I have a simple question: would you personally pull a gun on your neighbor and rob them to send your child to college? Better yet, would you actually use your weapon to take from you neighbor and give to another neighbor. Because that's precisely what you are advocating. You all represent the most vile of humanity. Again, anyone who would vote for Sanders is a coward.

ThroxxOfVron's picture

"I have a simple question: would you personally pull a gun on your neighbor and rob them to send your child to college? Better yet, would you actually use your weapon to take from you neighbor and give to another neighbor. Because that's precisely what you are advocating. You all represent the most vile of humanity. "

 

AWESOME POST.

+1

Dick Buttkiss's picture

 "Anyone who would vote for Sanders is a coward."

Not necessarily a coward but certainly a sheep, who, regardless of who he votes votes for, perpetuates a system designed to enslave him.

flexy123's picture

What you don't realize it is that you are a coward, respective that your view is driven by personal egotism and greed alone which seems to have priority over anything else. A typical example for this would be the absurdity that happened some years or so back when Seattle proposed a tax to build new bicycle paths. Americans: "Why should I pay a tax for new bicycle paths when I don't even own a bike?" <--- this is your despicable, egotistic view, always afraid that someone would take a dollar from your pocket and that dollar would go to somewhere where it won't directly benefit you.

(In a civilized nation by the way people are actually "ok" paying taxes where they KNOW it will benefit anyone ultimately, be it for streets, education, unemployment or whatever...something where YOU guys are still years back behind...but then you don't have a problem with spending $400B on a new fighterjet, some digging out of imaginary WMDs or funding your prez's million dollar Hawaii vacation? Saying, you pay tax anyway and there you're awfully quiet. Why is that? Then,  someone comes and has the 'audacity' to propose that tax should go to education or infrastructure and you freak out and compare it to being robbed at gunpoint? Amazing!)

Bay of Pigs's picture

And we all know how good socialism works. (sarc tag not needed)

Moar FSA!!!! Thats the ticket!

Omen IV's picture

the only dangerous socialism is........ corporate socialism or sometimes known as welfare which is what they pay politicians for

kaiserhoff's picture

Bernie is a Communist,

  with a capital C.

DrData02's picture

What does that matter?  The Rebublicans and Democrats are thieves enslaving us.

bigkahuna's picture

This country will not learn anything until the food runs out at the store and the politbureau starts snatching people out of their government confiscated housing.

I dislike what all of our politicians have become and the sewer our country is moving through.

While the greedy capitalist will exploit a situation to the point of rioting, there is a chance that his greed may be satisfied at some point. The state, on the other hand, will always profess to look out for it's subjects' good and in turn never be satisfied - it will take everything from each and every "subject" and leave nothing but destitution and death behind with no hope for any future. Everything goes to the politbureau - they drink champaigne while we drink foul water.

Anyone who thinks not has never been around any of today's so-called "leaders". They are narcissists, worshipping themselves whilst seeing EVERY other person as a threat. YOUR suffering and failure brings them pleasure and gratification.

Socialists, keep loving your ideas because that is all they are. Once your favorite sociopath assumes all that power and starts raining down crap - The war should probably go to the person you "elected" first, but it probably will come to you before them.

 

Forrest Grump's picture

Yes, the Dems and Socialists come right out and say they want to take your money, and they deliver.  The Repubs claim to be on your side, but they aren't.

LasVegasDave's picture

Two industries to surge under a sanders administration; rope makers and lamppost fabricators.

DrData02's picture

Hillary is a much closer comparison to Hilter than Sanders.  (Well, except for the honest part.  That she ain't.)

short the FED's picture

Your comparison of a genuine American Hero to Hitler is so ignorant it hurts (literally). Bernie simply want's what almost everyone I see on this site screams for. A real market run on fundamentales insteas of manipulation, public relations, and lies. He is also the only politician I have ever heard who is refusing to go along with our economic elite AKA masters of both parties who are responsible for the destablization of the middle east, millions of middle eastern refugees flooding Europe. The creation of a world where 64 people have more weatlh than 3.5 billion, and the complete ruination of our country by allowing the top 1/10 of 1 percent of Americans to posses more wealth than 90 PERCENT. We currently have Corporate Socialism and Oligarchial rule. If Bernie wanting Americans to have free health care and to have regulations in place in the stock market makes him your enemy I suggest you reevaluate your understanding of how the world. The same bankers that are ruing are lives have used the word SOCIALISM to confuse and scare us into compliance. Seek truth above hate and it's hard to see what anyone on this site could have against BERNIE  

 

jim

short the FED's picture

Your comparison of a genuine American Hero to Hitler is so ignorant it hurts (literally). Bernie simply want's what almost everyone I see on this site screams for. A real market run on fundamentales insteas of manipulation, public relations, and lies. He is also the only politician I have ever heard who is refusing to go along with our economic elite AKA masters of both parties who are responsible for the destablization of the middle east, millions of middle eastern refugees flooding Europe. The creation of a world where 64 people have more weatlh than 3.5 billion, and the complete ruination of our country by allowing the top 1/10 of 1 percent of Americans to posses more wealth than 90 PERCENT. We currently have Corporate Socialism and Oligarchial rule. If Bernie wanting Americans to have free health care and to have regulations in place in the stock market makes him your enemy I suggest you reevaluate your understanding of how the world. The same bankers that are ruing are lives have used the word SOCIALISM to confuse and scare us into compliance. Seek truth above hate and it's hard to see what anyone on this site could have against BERNIE  

 

jim