17 February 2016
Bernie Sanders' Childish Plans
Bernie Sanders and Democratic Socialism
February 15, 2016
Bernie Sanders claims to be a democratic socialist. Democratic socialism is the notion that there should be democratic control over the means of production (consider, for example, the manufacturing and distribution of goods) and thus the elimination of capitalism from the commanding heights of the economy. Sanders, however, is better viewed as a social democrat. A social democrat believes in the democratic regulation of capitalism with a sizable welfare state. Sanders thinks this should be done to give the working and middle class a fair deal.
Sanders is the sort of candidate who should not appeal to anyone over age seven. As Michael Tanner of the Cato Institute points out, he would tank Wall Street by raising the capital gains tax rate from 23.8% to 39.6%. This damage would be exacerbated by a new tax on every stock trade. Corporate taxes in the U.S. are already the highest in the world for major industrialized countries, but Bernie ratchet them up still more, thereby driving corporations out of the country. He would top this off with a brand spanking new carbon tax and then raise the minimum wage to $15 an hour.
His real enemy, though, is the rich. He would brutally assault the rich with a 90% top tax rate (he said he would not be opposed to it), a 12.4% payroll tax on all earnings above $250,000, a cap on CEO salaries, and a serious increase in the estate tax (that is, the death tax). The last he would do with a rate increase and a lowering of the amount before it kicks in.
Does anyone really think these things wouldn’t cause the economy to go into a tailspin? Sanders supplements these childish policies with, of course, a commitment to amnestying millions of illegal aliens.
As opposed to democratic socialism and Sanders’ social democracy, the case for capitalism is straightforward. It makes people freer, makes their lives go better, and makes them wealthier.
Economic freedom (capitalism) makes people freer. It consists of things such as rule of law (for example, property rights and freedom from corruption), lower taxes, regulatory efficiency, and market openness. The more economically free people are the less the government coercively tells them what to do. Economic freedom also correlates with political freedom and the health of the democracy in which people live and the degree to which they have political rights and civil liberties, so economic freedom also makes people overall freer.
Consider the effects of capitalism on quality of life. Increased economic freedom correlates with increased happiness, although the rate of increase tapers off. In addition, according to the Heritage Foundation’s analysis of economic freedom (capitalism), using numbers from The World Bank, economic freedom correlates with longevity to a surprisingly strong degree.
Other measures of well-being show a similar pattern. Economic freedom (capitalism) also correlates with greater literacy, more education, and better health. In short, capitalism makes people’s lives go better because it makes them happier and live longer.
The story with wealth is similar. Capitalism correlates with greater per capita income to a surprisingly strong degree. In summary, more economic freedom makes us, on average, freer, happier, and wealthier.
A democratic socialist might concede that capitalism has all these good effects, but argue that capitalism is unjust because it unequally distributes wealth, does not preserve equal opportunity, or fails to focus on the worst off. One immediate problem with this objection is that it is not clear that capitalism actually makes society unequal. The studies are mixed on whether it increases or decreases equality.
Second, even if capitalism does make society unequal or unjust, it is unlikely that the badness of inequality is worse than the harm to people’s lives that will occur if the economy tanks. The massive loss of wealth will likely make people’s lives go less well and the government’s tightening control over our lives will surely make us less free.
Even the notion of unfairness to the poor is dubious. Americans’ odd of being poor diminishes very sharply if they do three things: graduate from high school, get married before having children, and live in a household in which at least one person holds a full-time job. It is not unfair to ask this of people and to refuse to wreck the economy if they choose not do these things. The wealthy already pay far more than their share of taxes and have far less leisure time than the middle and working classes. There is nothing fair about taking yet more of their money when they’re already paying through the nose and working longer hours.
A Bernie Sanders supporter might concede that this criticism of democratic socialism is correct, but note that Sanders is a social democrat who just wants to drastically increase the amount of money going to the public part of the economy relative to the private part of it. Despite Sanders’ description of what he believes, it is not clear this is true. Sanders’ plan to have the federal government take over the medical field via a single-payer healthcare system reeks of socialism. His plan to make college and daycare free is likely the first step to having the government takeover these industries. Socialists know that an honest accounting is not in their interest.
Even if Sanders is merely a social democrat, the same problems that accompany reducing economic freedom apply, although to a lesser degree. Yet more intertwining of government and industry will cause the predictable drop in freedom, well-being, and wealth. In addition, with the national debt greater than the economy and continuing to grow and with the major parts of the budget (social security and Medicare) in the red and getting worse, Sanders’ spending orgy is the height of financial irresponsibility.
Sanders might or might not be a democratic socialist, but his childish plans are not worthy of serious consideration.