February 28, 2020

Understanding Sanders

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US Senator Bernie Sanders’s repeated attacks on inequality show a commitment to democracy and to giving people a voice. In fact, he is a social democrat, and thus closer to his fellow senator, Elizabeth Warren, one of his rivals for the Democratic presidential nomination, than their rhetorical differences might suggest.

NEW YORK – When US Senator Bernie Sanders describes himself as a “democratic socialist,” he arguably is using those words in a different way than many other people. Once that becomes clear, more American voters should have reason to support him than currently do.

The original meaning of socialism implied public ownership of the means of production, or, more colloquially, the nationalization of firms and corporations. Being a socialist by this definition would indeed be a mistake. For starters, the state is not an efficient manager. Moreover, in the long run, this model of socialism has been shown to lead to a society quite opposite to the one that state ownership was meant to achieve.

The experience of the Soviet Union demonstrated why it is a mistake to centralize ownership in the hands of the state, with all the booty in one place. Sooner or later, control of it is bound to be captured by a few individuals – the nomenklatura during communism’s heyday, followed by oligarchs during its decay. In other words, the last stage of this kind of socialism is, ironically, crony capitalism.

Listen carefully to Sanders, however, and it quickly becomes evident that he aspires to a very different “socialism” – namely, a variant of the Nordic model, refashioned for the twenty-first century. The Nordic countries are vastly more equitable than the United States, and, contrary to popular opinion, their economies also allow for greater upward mobility. A poor person in Denmark, for example, has a much greater chance of moving up the income ladder than their counterpart in today’s America.

Sanders has stressed this, and he has a long track record of activism on behalf of the poor and the marginalized. He seems genuinely inclusive, and has repeatedly stated his opposition to discrimination on the grounds of race, religion, gender, or sexual orientation, even though this is not always a popular stance. It is to his credit that he has not muffled this message in an attempt to gain popularity.

Sanders makes it clear that this is who he is, and one must take him or leave him with this in mind. In the process, he has brought a rare moral voice to the political arena.

on. In fact, he is a social democrat, and thus closer to his fellow senator, Elizabeth Warren, one of his rivals for the Democratic presidential nomination, than their rhetorical differences might suggest.

The challenge facing the next US president will be formidable. Donald Trump’s tenure has damaged not only America, but also, given the country’s global importance, the wider world. We now live in a polarized world where the plight of the worst off is more hopeless than it has been in a long time. In their hopelessness, these people often have ended up supporting the very leaders who care least about them.

Creating a society that is vibrant, growth-oriented, democratic, and equitable will not be easy, because, as Anand Giridharadas recently argued in The New York Times, the super-rich have a vested interest in the status quo. Reality is more granular than the words we have to describe it, which invites deliberate muddling of terms, such as labeling someone who favors reining in extreme inequality as a supporter of Soviet communism.

Furthermore, globalization and robotics – or globotics, as Richard Baldwin and Rikard Forslid pithily put it – are changing the landscape of work and the distribution of wealth. We are in new territory and will need novel policies to navigate it. For example, standard policies such as antitrust laws are losing their efficacy as conventional wage-paying work shrinks, and earnings increasingly accrue to those who own capital and hold the patents to new machines and products.

So, it is important to admit that we do not know quite what the right policies are. There will have to be many experiments with new policies, and whoever is America’s president will need to be prepared to modify these policies and change course when necessary. Given the circumstances, it is important that the president has the intention, as well as the intelligence and flexibility, to experiment and adjust. Several Democratic candidates have these critical qualities (the few Republicans that also do have been marginalized by Trump’s ascendancy), but Sanders stands out in this regard.

I believe that Sanders’s goals for America cannot all be met. If nothing else, fiscal constraints will make it impossible. But that need not be a serious problem if Sanders were to win in November and then learn as he goes along. And meeting even a subset of his objectives will represent a move in the right direction.

Recently, some Democratic voters have turned away from Sanders, following reports that Russia is supporting him in the Democratic primary. Russian President Vladimir Putin, it is said, wants Trump to win and believes that he will if pitted against Sanders. But a little game theory suggests that Putin may himself have engineered the leak, because he knows that Sanders is the only candidate who can defeat Trump. By letting it be known that he is backing Sanders, Putin hopes to ensure that many Democrats will not support the Vermont senator. And that would be good news for Trump.

Kaushik Basu, former Chief Economist of the World Bank and former Chief Economic Adviser to the Government of India, is Professor of Economics at Cornell University and Nonresident Senior Fellow at the Brookings Institution.

The text has been adapted from Project Syndicate website

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