Bernie Sanders: What are the Economic Views of the Democratic Socialist?

By Yigit Topcu

Bernie Sanders has raised quite a few eyebrows in his refusal to accept the word “socialist” as the insult it often is in American politics. Sanders calls himself a “democratic socialist”, but what does this actually mean, and what are Sanders’s economic beliefs?

To answer that question lets first examine what socialism is. Socialism is a theory of how the economy should be managed, advocating public or state ownership over the means of production. The means of production refers to the ways in which economic activity is generated: goods produced, natural resources/raw materials being used, machinery and tools, labor input, and so on, all contribute to the means of production.

All of that would be publicly controlled under socialism, while private ownership or control over these things would be banned. 

Under socialism, the production, distribution, and exchange of goods and services is regulated by the population (in theory, anyway). The idea is that this would lead to a more egalitarian society. The economic system of the Soviet Union is a close instance of what this might look like in practice. While we typically refer to the Soviet Union as “Communist Russia”, it was not actually communist (Communism is an entirely different can of worms which we will not get into here): in fact the name U.S.S.R stands for “Union of Soviet Socialist Republics”.

While communism was a hypothetical end-goal of the Soviet Union, it existed entirely as a near-socialist state.

So what is democratic socialism?Red Flag

Socialist systems have almost all been dominated by a one-party and highly centralized state, such as the Soviet Union. This trend has lead to a number of socialist states that sought to restrict the civil liberties of its citizens, or at worst, acted as brutal dictatorships. Furthermore, as socialism aims to transfer the means of production over to the public, its control by an authoritarian state is seen by some as inherently anti-socialist.

In hopes to avoid this, democratic socialism advocates for the workings of a democratic form of government alongside the collective ownership over the means of production as advocated by socialism.

The planned economies and collective ownership of socialism still applies to democratic socialists, but the actual planning/decision making is made in a democratic fashion, in theory to give more power to workers, rather than allowing authoritarianism to take over.

Now that we have all that established, you may or may not have noticed something peculiar with Bernie Sanders’s beliefs. And this is where it really gets confusing: Bernie Sanders is not actually a democratic socialist.

Sanders does not advocate state ownership over the means of production. He advocates for more regulation of capitalism in the interests of public welfare, but that is a crucial distinction to make: a democratic socialist would not be interested in regulating capitalism, they would be interested in replacing it.

So then what is Bernie Sanders? He appears to be a supporter of social democracy.

William Galston, an expert on domestic politics at the Brookings Institution, agrees. In a recent Washington Post article he writes, “(Bernie Sanders) is not a democratic socialist. He’s a social democrat. Seriously.”. 

Now the question becomes what is “social democracy” and what does it mean to be a “social democrat”?

Social democracy is a political ideology that supports state intervention in capitalism to guarantee a certain standard of living. This might include access to education, healthcare, labor rights and collective bargaining, maternity and paternity leave, vacation time, public housing and so on.

Under social democracy some or all of these conditions may be treated as a right, protected by the state at the national level, rather than leaving them to one’s position in the marketplace.

But what exactly are social democratic views of capitalism itself? Do they hate it for all its greed and exploitation? Is social democracy just a step away from socialism?

Capitalism-Socialism

Not exactly. The goal for social democrats is not to change capitalism, but to harness its productivity in a more effective way. Proponents of social democracy would describe their ideology as “improving” capitalism.

The social democratic take on capitalism is characterized more by a concern for effectiveness and efficiency above all else. It is a distinct ideology different than either socialism or economic liberalism.

The principles of competition, rule of law, the profit motive and private property, all capitalistic notions which have historically proven to be powerful, are all highly upheld within social democratic ideology.

Optimistically there might be more common ground here between the left and the right than one might think. The close relationship between businesses and the state is often times decried by the right, particularly by libertarians. Social democratic ideology would actually agree with this, as the success of a business, according to both social democrats and libertarians, should be dependent on how it performs in the marketplace, and not by how much money is spent on lobbying.

In that sense perhaps social democracy can be seen as free market economics existing alongside a system of welfare concerned only with providing basic services and maintaining a standard of living, while also regulating certain industries to protect public interests. 

Where the two ideologies really diverge is regarding what the ultimate role of the state should be. The classical laissez-faire libertarian view is that the state should play no role in the the economy, and that social justice and standards of living, along with necessities such as healthcare and education, are best left up to the invisible hand of the market. It is theorized that through free enterprise and competition, private individuals will bring about the most ideal conditions for a society.

And a great deal of that is believed to be true by social democrats.

However, their view expands on this by adding that free market capitalism alone and by itself is ultimately inadequate in bringing such conditions. State intervention is seen as a necessity, at times to alleviate the worst effects of capitalistic production, and at other times to provide some basic services in which the market does not perform well.

Can a system like social democracy really work? Well, it already exists to some extent in the United States: Social Security, Medicare and Medicaid or environmental and financial regulations are just a few examples of policies created to protect public interests or provide state-enforced welfare systems where the markets fall short. Furthermore many countries in Europe, including a number of which that have higher standards of living than the United States (as Senator Sanders often times points out) have adopted the ideas of social democracy, particularly in the mid-to-late 20th century, to a much greater extent than the United States.

Some of these countries, Denmark, Finland, Norway, Iceland and Sweden, are known today for pioneering what has been called the “Nordic model”, which is really just social democracy at work. 

Now let us be mindful that there is no such thing as a perfect economic or political system. There is plenty of flaws in social democracy, from generally higher taxes to potential exploitation of the welfare system.

Conservatives believe that the existence of such welfare programs reduces incentives for workers to perform well at their jobs. Furthermore they say that there is a potential for workers to become disinterested from seeking employment altogether.

Some socialists also criticize social democracy as it is seen by them as a way of legitimizing and entrenching capitalism rather than replacing it.

There are also less ideological points of skepticism about how this system might function in a country like the United States, which has a notably larger and less homogeneous population than, say, Sweden or Norway.

But again, those are countries that have taken social democracy to much greater lengths. Social democracy is not a rigid code of conduct, it is an idea for the kind of role a state should play in the economy. How exactly its ideas are implemented and to what extent has differed from country to country.

We should absolutely not expect America’s population of 319 million people to get state-sponsored vacations to the Mediterranean any time soon. Regardless, perhaps hypothetical unrealistic and massive welfare programs should not become a barrier in the way of more modest, realistic and urgent proposals, like treating healthcare as a right rather than a commodity.

But is the ideal state really one that does not interfere whatsoever with the economy? Would an economy which exists independently from state intervention really lead to the “universal opulence” that Adam Smith describes in The Wealth of Nations?

Adam Smith

Some political economists believe that the theory of capitalism as described by classical economists is in fact highly utopian. Such a free market system does not exist currently, has never existed in the past, and can never exist in the future. It is impossible to attain, and attempting to establish it can lead to dire consequences.

Another enormous issue with attempting that approach to capitalism is that it is ultimately an unsustainable system: see climate change, or the global wealth gap, which is potentially catastrophic considering the exponential growth of the world’s population. 

Social democrats believe that capitalism can be made sustainable, or at the very least, made sustainable for longer and better than it is currently.

Social democracy is highly influenced by Keynesian economics, which became popular after the Great Depression and again after the Great Recession. There must be state intervention, as John Maynard Keynes himself puts it, to “save capitalism from itself”: to save capitalism rather than replace it, or simply allow it to destroy itself, and the rest of the world in the process (made more possible by a globalized economy).

That is the social democratic view, and that seems to be where Bernie Sanders’s political and economic beliefs are located. The views he espouses on the campaign trail resemble social democratic ideology much more closely than democratic socialism, and the countries he often times references all have popular social democratic parties, movements and policies. 

Whether we agree with his views is up to American voters to decide. 

Either way, one thing is for certain: Bernie Sanders mislabeling his own economic views does not help him. Democratic socialism is a far more extreme left-wing ideology than the social democracy which Sanders seems to believe in. This does not help him when his opponents are all too eager to paint him as a troubling radical, and even more so when skeptical voters believe that depiction.  

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