The superficial socialism of Bernie Sanders

"...If I were to tell you that in the United States a) nearly 70% of the total wealth is owned by the top 10% of the population and b) only a handful of countries — mostly tiny boutique economies such as Liechtenstein and Hong Kong — had more billionaires per person, you might think I cribbed the info from Bernie Sanders’ big speech Wednesday on democratic socialism. During that address, the Democratic presidential candidate warned of the “growing movement towards oligarchy and authoritarianism in which a small number of incredibly wealthy and powerful billionaires own and control a significant part of the economy and exert enormous influence over the political life of our country.” So America is getting it wrong, big time, according to Sanders. And he’s arguing it’ll take a democratic socialist president to turn things around in a country that has for too long allowed capitalism to run wild over the poor and middle class. Is there a model for a country that’s doing it better? Sanders thinks there is. Back in April, Sanders told a Burlington, Iowa audience that while Soviet-syle socialism was “not my thing,” he did think that countries like Denmark and Sweden do very well.” (Side note: By all means, let’s not be too judgy about the USSR.) Ah yes, the Nordic miracle, the egalitarian paradise powered by Sanders-style socialism. But just how egalitarian? Just how socialist?Admission: I’ve been a bit tricksy here. Those wealth inequality numbers from above are for Sweden, not the United States. In oligarchic America, the top 10% wealth inequality is only a bit higher (74.6% vs. 68.6%), while billionaires per capita (and millionaires, too, for that matter) is lower. What’s more, America’s superich tend to get that way via entrepreneurship — starting companies that produced goods and services that the rest of society greatly values — rather than inheritance, unlike Sweden. Indeed, no large economy has produced as many entrepreneur billionaires per capita as the US...."

James Pethokoukis, "The superficial socialism of Bernie Sanders," American Enterprise Institute, June 14, 2019, https://www.aei.org/economics/the-superficial-socialism-of-bernie-sanders/

The superficial socialism of Bernie Sanders

If I were to tell you that in the United States a) nearly 70% of the total wealth is owned by the top 10% of the population and b) only a handful of countries — mostly tiny boutique economies such as Liechtenstein and Hong Kong — had more billionaires per person, you might think I cribbed the info from Bernie Sanders’ big speech Wednesday on democratic socialism. During that address, the Democratic presidential candidate warned of the “growing movement towards oligarchy and authoritarianism in which a small number of incredibly wealthy and powerful billionaires own and control a significant part of the economy and exert enormous influence over the political life of our country.”

So America is getting it wrong, big time, according to Sanders. And he’s arguing it’ll take a democratic socialist president to turn things around in a country that has for too long allowed capitalism to run wild over the poor and middle class. Is there a model for a country that’s doing it better? Sanders thinks there is. Back in April, Sanders told a Burlington, Iowa audience that while Soviet-syle socialism was “not my thing,” he did think that countries like Denmark and Sweden do very well.” (Side note: By all means, let’s not be too judgy about the USSR.)

Ah yes, the Nordic miracle, the egalitarian paradise powered by Sanders-style socialism. But just how egalitarian? Just how socialist? Admission: I’ve been a bit tricksy here. Those wealth inequality numbers from above are for Sweden, not the United States. In oligarchic America, the top 10% wealth inequality is only a bit higher (74.6% vs. 68.6%), while billionaires per capita (and millionaires, too, for that matter) is lower. What’s more, America’s superich tend to get that way via entrepreneurship — starting companies that produced goods and services that the rest of society greatly values — rather than inheritance, unlike Sweden. Indeed, no large economy has produced as many entrepreneur billionaires per capita as the US.

So why doesn’t Sanders view Scandinavia — which he may not realize is known for having efficient, deregulated economies and flexible labor markets — as being on the cusp of wealth inequality-driven authoritarianism. Maybe because the idea is ridiculous. For instance, the Economist Intelligence Unit ranks Sweden as the world’s third healthiest democracy. Moreover, if Sanders can’t use Scandinavia as an example of socialism done right, then he’s left with nothing but theory and bad examples like the Soviet Union and Venezuela.

A 2018 Credit Suisse global wealth report correctly notes that the rise of the superrich“is often seen as a sign of a country’s economic health and its ability to generate opportunities for wealth creation.” Indeed, places crawling with billionaires tend to be great places to live. As Will Wilkinson wrote in a New York Times column earlier this year, “Inspect any credible international ranking of countries by democratic quality, equal treatment under the law, or level of personal freedom. You’ll find the same passel of billionaire-tolerant states again and again.”

But those realities are hardly the only ones that speech — one deserving of many fact-check Pinocchios on a variety of claims from wage stagnation to Big Tech monopoly — failed to deal with. From Yascha Mounk in The Atlantic:

Anybody who has studied the history of Europe — or, for that matter, Latin America — should know that some socialists crafted systems that left virtually no space to private enterprise and crushed the political freedoms of dissenters, while others combined government benefits with a robust market economy and the rule of law. … view, the threat of autocracy comes exclusively from the right. Just as in the 1930s, “America and the world are once again moving towards authoritarianism.” This danger is driven by “right-wing forces of oligarchy, corporatism, nationalism, racism, and xenophobia.” The only answer that will stave off fascism is, you guessed it, “democratic socialism.” Thus Sanders name-checked Adolf Hitler and Benito Mussolini but remained silent about Joseph Stalin and Mao Zedong. And while he rightly decried the autocratic tendencies of Russia’s Vladimir Putin, China’s Xi Jinping, Saudi Arabia’s Mohammed bin Salman, the Philippines’ Rodrigo Duterte, Brazil’s Jair Bolsonaro, and Hungary’s Viktor Orbán, he neglected to mention leftist autocrats such as Venezuela’s Nicolás Maduro, Cuba’s Raúl Castro, Nicaragua’s Daniel Ortega, Zimbabwe’s Emmerson Mnangagwa, or North Korea’s Kim Jung Un.