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Archive for the ‘Statism’ Category

Having been inspired by Ronald Reagan’s libertarian-ish message (and track record), I’ve always been suspicious of alternative forms of conservatism for the simple reason that they always seem to mean bigger government.

To be fair, proponents of all these approaches always paid homage to the role of markets, so we’re not talking about Bernie Sanders-type nuttiness.

But I don’t want to travel in the wrong direction, even if only at 10 miles-per-hour rather than 90 miles-per-hour.

Now there’s a new alternative to Reaganism called “national conservatism.” It’s loosely defined, as you can see by reports from both left-leaning outlets (New York, New Republic) and right-leaning outlets (Townhall, Daily Signal).

There are parts of this new movement that are appealing, at least if I’m reading them correctly. Proponents are appropriately skeptical of global governance, though maybe not for the reasons that arouse my antipathy. But the enemy of my enemy is my friend in this battle.

They also don’t seem very fond of nation building, which also pleases me. And I also am somewhat sympathetic to their arguments about national unity – assuming it’s based on the proper definition of patriotism.

But their economic views, at best, are worrisome. And, as George Will opines, they’re sometimes awful.

…“national conservatives”…advocate unprecedented expansion of government to purge America of excessive respect for market forces and to affirm robust confidence in government as a social engineer allocating wealth and opportunity. …The Manhattan Institute’s Oren Cass advocates “industrial policy” — what other socialists call “economic planning”… He especially means subsidizing manufacturing..he admits that as government, i.e., politics, permeates the economy on manufacturing’s behalf, “regulatory capture,” other forms of corruption and “market distortions will emerge.” Emerge? Using government to create market distortions is national conservatism’s agenda. …Their agenda is much more ambitious than President Richard M. Nixon’s 1971 imposition of wage and price controls, which were temporary fiascos. Their agenda is even more ambitious than the New Deal’s cartelization of industries, which had the temporary (and unachieved) purpose of curing unemployment. What national conservatives propose is government fine-tuning the economy’s composition and making sure resources are “well” distributed, as the government (i.e., the political class) decides, forever. …Although the national conservatives’ anti-capitalism purports to be populist, it would further empower the administrative state’s faux aristocracy of administrators who would decide which communities and economic sectors should receive “well”-allocated resources. Furthermore, national conservatism is paternalistic populism. This might seem oxymoronic, but so did “Elizabeth Warren conservatives” until national conservatives emerged as such.

Since Nixon and FDR were two of America’s worst presidents, Will is drawing a very harsh comparison.

To give the other side, here are excerpts from a New York Times column by Oren Cass.

…a labor market in which workers can support strong families and communities is the central determinant of long-term prosperity and should be the central focus of public policy. Genuine prosperity depends upon people working as productive contributors to their society, through which they can achieve self-sufficiency, support their families, participate in their communities, and raise children prepared to do the same.

None of this sounds bad.

Heck, it sounds good. I’m in favor of strong families and strong communities.

But what does this rhetoric mean? Here’s where I start to worry.

Crucially, while a labor market left alone will seek an efficient equilibrium, economic theory never promises that the equilibrium will be a socially desirable, inclusive one. A genuine conservatism values markets as powerful mechanisms that foster choice, promote competition and deliver growth, but always in service to the larger end of a cohesive society in which people can thrive. …In some cases, …conservatives will head in new directions or even reverse course. …an insistence that workers throughout the labor market share in productivity growth……longstanding hostility toward organized labor will give way to an emphasis on reform. …new forms of organizing through which workers can support one another, engage with management and contribute to civil society should be a conservative priority.

And my worry turns to unfettered angst when I read some of the specific ideas that Cass mentions.

…a wage subsidy delivered directly into each low-wage paycheck…skepticism of unfettered international trade…legislation that would require the Federal Reserve to close the trade deficit by taxing foreign purchases of American assets.

To put it mildly, more redistribution, more protectionism, and taxes on investment is not a Reaganite agenda.

I’ll close with a political observation. Defenders of national conservatism have told me that the Reagan message is old and stale. It supposedly doesn’t apply to new problems in a new era.

Yet non-conservative Republicans lost twice to Obama while a hypothetical poll in 2013 showed Reagan would trounce Obama.

Some national conservatives point to Trump’s victory as an alternative, but I think that had more to do with Hillary Clinton. In any event, I very much doubt Trumpism is a long-term model for political success. Or economic success.

Maybe the real lesson is that good policy is good politics?

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Back in 2012, I wrote that the left’s hostility to tax competition had reached such a crazy level that some of them were even urging military action against low-tax jurisdictions.

Though I was amused to see that this warmongering focused on tiny jurisdictions such as Monaco and the Cayman Islands rather than the well-armed Swiss.

But maybe the militaristic statists are getting braver.

Stephen Walt, a professor at Harvard, openly suggests in a column for Foreign Policy that it may be necessary to invade Brazil in the name of global warming.

…how far would you go to prevent irreversible environmental damage? In particular, do states have the right—or even the obligation—to intervene in a foreign country in order to prevent it from causing irreversible and possibly catastrophic harm to the environment? …I raise this issue in light of the news that Brazilian President Jair Bolsonaro is accelerating development of the Amazon rainforest… What should (or must) the international community do to prevent a misguided Brazilian president (or political leaders in other countries) from taking actions that could harm all of us?

In the article, Professor Walt mentions sanctions and protectionism as potential tools.

But he also thinks a military option should be on the table.

…international law authorizes countries to go to war for self-defense or when the Security Council authorizes military action. It’s even legal to attack another country’s territory preemptively, provided there is a well-founded basis…destroying the Amazon rainforest presents a clear and obvious threat to many other countries… I don’t mean to single out Brazil: It would be an equally radical step to threaten the United States or China if they refused to stop emitting so many greenhouse gases. …It might seem far-fetched to imagine states threatening military action to prevent this today, but it becomes more likely if worst-case estimates of our climate future turn out to be correct.

Wow.

Because I’m not a scientist, I generally don’t write about global warming. Or climate change, or climate crisis, or whatever it’s now being called.

But I am very skeptical of people who make absurd and hysterical arguments (climate change will cause genocide, it will cause AIDS, it is supported by racists, it means Cuba is better than the USA, it causes terrorism, it caused Brexit, etc) in order to advance an agenda that would dramatically expand the burden of government.

Some of them are simply scammers, using the issue to line their pockets with government grants.

But some of them are true believers who behave in very weird ways (don’t bathe, sterilize themselves, hand-cranked vibrators, choose death, etc).

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Cuba has a very sad history.

It traded a regular dictatorship for a communist dictatorship six decades ago, and the results have been predictably awful.

Oppression, persecution, rationing, spying, deprivation, and suffering are facts of life in that socialist hellhole.

For a while, it was subsidized by the Soviet Union, but that communist system eventually collapsed. More recently, it’s been subsidized by Venezuela, but now that socialist system also is collapsing.

And this means extra hardship for the people of Cuba.

Jose Nino explains one of the grim consequences of Cuba’s central planning.

Cuba is now implementing a rationing program to combat its very own shortages of basic goods. A CBC report indicates this program would cover basic items such as chicken, eggs, rice, beans, and soap. …When Fidel Castro took control of Cuba in 1959, the Cuban state maintained an iron grip on the economy. For decades, the country has been a communist garrison state with very little respect for property rights… Because of the economic dislocations caused by state control of many industries, the government has had to provide citizens with Libretas de Abastecimiento (supply booklets) to ration out basic goods like rice, sugar, and matches. …Cuba’s recent political behavior indicates that the country’s leadership still does not get basic economics. …After more than 50 years of embracing socialist governance, Cuba will have to learn that it needs to stick to the basic economic principles if it wants to break free from its long-standing cycle of poverty.

Bizarrely, there are still some proponents of the Cuban dictatorship.

Writing for CapX, Kristian Niemietz ponders this lingering semi-support for Cuba on the left.

…socialist experiments usually go through three stages, in terms of their reception by Western intellectuals. The first is a honeymoon period, during which they are widely held up as a glorious example of “real” socialism in action. The second is a period of angry defensiveness, during which some of the system’s failures are acknowledged, but blamed on external constraints. The third stage is the stage of retroactive disowning: intellectuals now claim that the country in question was never socialist, and that it is a cheap strawman to even mention it. The Western reception of the Soviet Union, Maoist China, Vietnam and, more recently, Venezuela followed this pattern to a tee. Cuba, in contrast, is a bit of an outlier, in that the country seems to be permanently stuck somewhere between stages two and three. It may no longer attract widespread enthusiasm, but Cuban socialism has never completely gone the way of Soviet, Maoist, Vietnamese or North Korean socialism.

Robert Lawson and Benjamin Powell have a book about statism and socialism that’s very informative. But also very entertaining.

Here are some excerpts from their chapter about a visit to Cuba.

In government-directed economies, a disproportionate amount of money is spent on what political leaders desire—typically, great Olympic sports teams, and a few showcase hotels and restaurants to impress foreigners. In Cuba’s case, this included the opulent Hotel Nacional… But we were on a mission to see what life was like inside Cuba’s socialist system. We couldn’t experience that by drinking Cuba libres at a fancy resort… Before the revolution, Cuba had a thriving urban middle class, along with widespread rural poverty. Twentieth-century socialists claimed socialism would deliver greater equality and out-produce capitalism by ending wasteful competition, business cycles, and predatory monopolies. Socialism hasn’t delivered the goods it promised in Cuba or anywhere else. Today, Cuba is a poor country made poorer by socialism. Socialism also gives tremendous power to government officials and bureaucrats who are the system’s planners—and with that power comes corruption, abuse, and tyranny. It is no accident that the worst democides of the twentieth century occurred in socialist countries like the Soviet Union, Communist China, and Nazi (National Socialist) Germany.

The book is basically a travelogue, mixed with economic insights that oscillate between amusing and horrifying.

The hotels are no good.

The Hotel Tritón’s decaying edifice was a crumbling tribute to Cuba’s central-planning problems. Cuba had the resources to make large capital investments in state-run enterprises when it received aid from the Soviet Union. But many of these hotels can’t generate enough revenue to sustain the initial investment. Cuban government planners then had to pick which hotels to subsidize to prevent decay. The Hotel Tritón didn’t make the cut. It was rotting, inside and out. And nobody cared because nobody owned it. …In a capitalist economy, entrepreneurs create businesses to make profits, which they earn by pleasing their customers. But in a socialist system, a bureaucrat decides which businesses can open, where they can operate, and what they can sell, and he really doesn’t care what the customer thinks. Adopting a socialist system is like turning your whole economy into a giant Department of Motor Vehicles.

The shopping is no good.

In Central Havana, the lack of commerce unrelated to tobacco, alcohol, or sex was striking. Habaneros lived in these neighborhoods. So where did they shop? …We found one store that was a large open room with high ceilings and cement support columns. …behind a counter, there were shelves with bottles of rum, cases of the local cola, a few canned goods, cartons of eggs, and large sacks of rice next to a scale. A line of Cubans shopped their way down the counter. The place was an odd mix, somewhere between the worst imaginable version of a grade school cafeteria and a grocery in which 95 percent of the stock is depleted.

The dining is no good.

… we decided on our last evening on the island to try a state-owned “Italian” restaurant on the main boulevard between the shitty Hotel Caribbean and the Capitol. We were disappointed to see that Italian meant nothing more than a few basic pizzas and a couple types of pasta, along with the same chicken, pork, seafood, and beef dishes we found everywhere else. We ordered two beers and “mozzarella from the oven” as an appetizer. To say that it was the equivalent of Taco Bell queso with tomato chunks in it would be insulting to Taco Bell. In fact, it was a steaming pot of greasy white goo. … most Cubans can’t afford to eat at the places we ate, and Cuba’s socialist economic system can’t even deliver variety to rich tourists. We were tired of the food after a week. But we could leave; Cubans are stuck with lousy food (outside the private restaurants), limited ingredients, and little variety for as long as they’re stuck with socialism.

And Che is no good.

Unfortunately for Cubans, Che wasn’t nearly as good at planning production as capitalists have been at plastering his image on merchandise. During Che’s stints as head of the National Bank of Cuba, minister of finance, and minister of industry, Cuba not only failed to industrialize (as promised), but its sugar production collapsed and severe rationing was introduced.

But Cubans are very good, at least when they’re out from under the tyranny of socialism.

We were in Little Havana, in Miami. The economic contrast between Little Havana and the real thing began before we even stepped out of our Uber. The half-hour car ride cost us only $13.72 instead of the absurd taxi costs in Cuba. …Unlike stores in Cuba, this store had hundreds of different items for sale. …we headed off to a Cuban restaurant for dinner. The six-page menu contained more options than we had seen from all of the restaurants in Cuba combined. …Cuban cuisine is excellent—just not when it’s served in Cuba. It’s not the Cubans’ fault. It’s the fact that socialism sucks. Cubans under a socialist system remain poor and eat bland food. Ninety miles away, Cubans who live in Miami become relatively rich and make wonderful food. Same people, two different economic systems, two drastically different economic— and gastronomic—outcomes.

By the way, I recommend the book.

There are also chapters about Sweden, Venezuela, North Korea, China, Georgia, and Russia/Ukraine.

My contribution today is this chart showing per-capita economic output in various Latin nations, derived from the Maddison database. At the time of the revolution, Cuba (orange line) was one of the richest nations. Now it has fallen far behind.

It’s always useful to look at decades of data because short-run blips aren’t a factor. Instead, you really learn a lot about which nations are enjoying good growth and which ones are stagnating.

What we’ve learned today is that the people of Cuba are poor because of awful economic policy. Other nations (most of which started in worse shape) have become much richer.

Perfect policy would be great, but even decent policy creates enough “breathing room” for more prosperity. Unfortunately, even that’s not allowed in Cuba.

P.S. For some unintentional Cuban-related humor, see here and here.

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I’ve applauded China’s economic progress.

It’s economic liberty score jumped from 3.64 in 1980 to 6.46 in the most recent edition of Economic Freedom of the World.

That shift toward markets (which started in a village) helped to dramatically reduce poverty and turn China into a middle-income nation.

That’s the good news.

The bad news is that most of China’s economic liberalization (from 3.64 to 6.15) occurred between 1980 and 2003.

Since that time, China’s score has improved at a glacial pace. Moreover, because other nations have been more aggressive about reducing the burden of government, China’s relative ranking has actually dropped (from #88 to #107) since 2003.

Which is why I’ve warned that China needs another burst of pro-market reform if it wants to become a rich country.

Regarding this issue, the Wall Street Journal has a very interesting report about how China is under-performing.

The country’s state-led growth model is running out of gas. A recession or crisis may not be imminent, but the long-run implications are just as serious. Absent a change in direction, China may never become rich. …First, official statistics probably paint too flattering a picture. Per-capita income may be a quarter lower than reported, based on a study of nighttime light co-authored by Yingyao Hu of Johns Hopkins University. …Second, it doesn’t measure up to the economies China seeks to emulate. Taiwan, South Korea and Japan all opened their economies to global trade and investment, enjoyed superfast growth for several decades… In fact, China seems to be slowing sooner than the others.

Why is China underperforming?

Too much statism. Simply stated, the government has too much control over the allocation of labor and capital.

For 30 years the Communist Party opened ever more of the economy to private enterprise, trade, foreign investment and market forces. Yet it never relinquished its commitment to socialism and Mr. Brandt says that since the mid-2000s the government has tightened control over sectors… An inefficient state sector matters less if the private sector grows fast enough. But in recent years, private firms in China have faced multiple headwinds. State-controlled banks prefer to lend to state-owned enterprises… The domestic private sector’s share of total sales has dropped about 5 percentage points since 2016, according to Goldman, while the state sector’s share has risen roughly as much.

By the way, many observers (from the American Enterprise Institute, Peterson Institute for International Economics, the New York Times, the New York Post, and Investor’s Business Daily) echo the concern about China becoming more statist in recent years.

I’ll make a more restrained point.

I’ll start by sharing this very interesting chart from the WSJ story. It shows how China’s growth, while impressive, has not been as rapid as the growth enjoyed by other Asian economies.

If you look below, you’ll see I’ve now augmented the chart to explain why China has under-performed.

On the right side, I’ve added the historical rankings from Economic Freedom of the World. As you can see (and just as theory and evidence teaches us), the other nations on the chart enjoyed more growth because they had more economic freedom.

These numbers reinforce my argument that China needs more pro-market reform. Though I should add the caveat that EFW has added more nations over time, so this comparison overstates the degree to which China is lagging.

But it is lagging. The bottom line is that China needs to copy Hong Kong and Singapore if it wants to become a rich nation. Or even Taiwan, which is an under-appreciated success story.

P.S. Keep in mind that China also faces demographic decline, which makes good policy even more necessary and important.

P.P.S. Amazingly, both the OECD and IMF are trying to sabotage China’s economy.

P.P.P.S. The WSJ story is an example of good reporting. If you want an example of bad reporting about China, check out this bizarre story from the New York Times.

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I’ve repeatedly warned about the downsides of socialism, calling it “evil and stupid,” as well as a “dreary failure.”

Though these debates can be frustrating because of vague definitions.

Some people, when they talk about socialism, are referring to government ownershipcentral planning, and price controls.

Others, by contrast, are referring to Scandinavia’s market-based welfare states.

And there’s also a distinction to be made between Marxist socialism and less totalitarian versions.

Speaking of which Joseph Stiglitz opined in the Washington Post about the benefits of so-called democratic socialism.

…no one in the United States is advocating a government takeover of coal mines or oil fields — not Ocasio-Cortez, not Sanders, not anybody. …the extremes of capitalism and its dysfunction have given rise to questions such as: Can capitalism be saved from itself? …American democratic socialists — or call them what you will — is simply advocating a model that embraces government’s important role in social protection and inclusion, environmental protection, and public investment in infrastructure, technology and education. They recognize the public’s regulatory role in preventing corporations from exploiting customers or workers… Millennials respond to the label “democratic socialist” in a pragmatic way. They say, if it means ensuring a decent life for all Americans, then we’re for it. …many of these ideas have the support of a majority of Americans, especially the young.

I don’t doubt that many people respond favorably to polling questions about getting things for free.

Even the young. Maybe especially the young.

Indeed, the desire to get something for nothing is the Achilles Heel of democracy.

But does any of that mean socialism works?

Professor Ilya Somin of George Mason Law School is appropriately skeptical.

He explains why socialism imposed by a democratically elected government won’t be any more successful than the totalitarian forms of socialism.

Historically, socialism—defined as government control over all or most of the economy—has led to mass murder, poverty, and oppression on an enormous scale. …The current horrible oppression in Venezuela…is just the latest iteration of the same pattern. …current advocates of democratic socialism argue that this awful record isn’t relevant to their proposals. …we are assured that latter-day socialists don’t actually mean to impose government control over the means of production. They just want greatly increased regulation and welfare state spending. Unfortunately, the…expansion of government power advocated by modern socialists is so great that it would put most of the economy under state control, even if much industry formally remained under private ownership. It goes far beyond any Scandinavian precedent. …The standard agenda favored by most democratic socialists –  single-payer health care, universal free college, and a guaranteed federal job for anyone who wants one—would cost some $42.5 trillion over a ten year period ($4.25 trillion per year). …many enterprises would officially remain under private ownership, implementation of the democratic socialist agenda would ensure that the federal government controls the lion’s share of actual economic resources.

Professor Somin warns that the Sanders/AOC agenda would push America way to the left of the Nordic nations.

Often, their agenda is analogized to the policies of Scandinavian nations, which have large welfare states, but remain relatively prosperous and free. …The democratic socialist agenda goes well beyond the Nordic nations advocates sometimes cite as models. While these countries have comparatively large welfare states, they combine them with low levels of regulation and high openness to international trade. To take just one example, none of the Nordic nations have a national government-mandated minimum wage. The Nordic nations actually come close to the United States (and occasionally even outscore it) on standard measures of economic liberty. Iceland (slightly ahead of the US) and Denmark (slightly behind) were statistically indistinguishable from the US in the latest Index of Economic Freedom ranking put out by the conservative Heritage Foundation. Finland and Sweden were only slightly lower. When Danish Prime Minister Lars Løkke Rasmussen tried to explain to Bernie Sanders that his country is not actually socialist, the latter should have listened.

I’ve made similar arguments about relatively high levels of economic liberty in Scandinavia, so I obviously think this is spot on.

Somin also speculates that democratic socialism in America may morph into totalitarian socialism. Which is what’s happened in Venezuela. And may happen to Greece.

I worry that he’s right, particularly since redistribution erodes societal capital.

Though I hope he’s wrong.

In any event, that’s a secondary issue. At least for now.

What matters today is that politicians are promising lots of freebies. Notwithstanding the “investment” argument made by Stiglitz and others, those new handouts will undermine prosperity.

And that’s true regardless of whether the additional spending is financed with new taxes or new debt (or printing money).

 

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By offering all sorts of freebies to various constituencies, Bernie Sanders has positioned himself as the true-believing socialist in the Democratic race (even though he’s actually a member of the “top-1 percent”).

But he has plenty of competition. Kamala Harris and Elizabeth Warren are strong competitors in the free-lunch Olympics, and most of the rest of the candidates are saying “me, too” as well.

Assuming these candidates get a warm reception, this is a worrisome development.

Part of America’s superior societal capital is (or has been) our immunity to the free-lunch message.

If that’s changing, it will be very hard to be optimistic about the future.

Antony Davies of Duquesne University and James Harrigan of the University of Arizona wrote for FEE about the dangerous – and seductive – ideology of something-for-nothing.

…politicians are tripping over each other to offer voters more “free” things, including everything from health care and college to a guaranteed basic income. But voters should be fostering a healthy sense of skepticism. If there is one eternal and immutable fact in economics, it is that nothing is free. Nothing. …as voters, our healthy skepticism seems to go right out the window. When politicians promise all sorts of “free” things, it doesn’t occur to many of us that those things can’t possibly be free. It doesn’t occur to us that, like businesses seeking our dollars, politicians will tell us whatever it takes to get hold of our votes. …Don’t be so gullible…when you hear Alexandria Ocasio-Cortez and Bernie Sanders tell you how health care and higher education will be free for everyone, remember that…health care and higher education cannot and will never be free.

Davies and Harrigan are economically right. Indeed, they are 100 percent right.

There’s no such thing as a free lunch.

But there are lunches that financed by others. And that’s why I’m worried about support for Sanders and other hard-left Democrats.

I don’t want America to turn into Europe, with people thinking they have a “right” to a wide array of goodies, paid for by someone else.

So what’s the alternative to the something-for-nothing ideology of the modern left?

Bobby Jindal, the former Louisiana governor, recently opined on this topic in the Wall Street Journal.

Progressives are changing the Democratic Party’s focus…to subsidizing everything for everybody. …Democrats now promise free college, free health care and more—for everyone. Republicans can’t outspend Democrats, but they can make the case for freedom and against the idea that everything is “free”… The Republican ideal is…an aspirational society. …becoming dependent on government is the American nightmare. …Republicans have to do more than mock the Green New Deal…if they want to persuade young voters of the case for limited government and personal freedom. …“free” means more government control at the expense of consumer autonomy. When progressives promise government will pay for health care and college, they are really saying government will run medicine and higher education. …“Free” means less efficiency, more expense and lower quality. …“Free” means robbing from America’s children. …Despite proposed marginal rates as high as 70% or even 90%, none of the tax plans Democrats have put forward would raise nearly enough revenue to pay for the promised spending. …Republicans can’t outbid Santa Claus. Americans are willing to work hard and sacrifice for a better life but need to know how pro-growth policies benefit them. Voters may be tempted by progressives’ crazy plans… They will embrace effective market-based solutions that promote freedom if Republicans offer them.

Gov. Jindal has a great message about trumpeting growth as an alternative to redistribution.

Though I’m not brimming with confidence that Republicans are overly sincere when they use this type of rhetoric.

And some of them, like Trump, don’t even bother with pretending that they want to curtail dependency and shrink the social welfare state.

And that does not bode well for America’s future.

P.S. As is so often the case on issues of policy and ethics, Professor Walter Williams is a great source of wisdom.

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When writing about Bernie Sanders back in 2016, I put together a flowchart to identify different strains of statism.

In part, I wanted to show that genuine socialists, with their advocacy of government ownershipcentral planning, and price controls, aren’t really the same as other leftists (and I’ve made the unconventional claim that “Crazy Bernie” isn’t a true socialist – at least based on his policy positions).

I’m not the only one to notice that not all leftists have the same approach.

Writing for the Washington Post about the battle between Bernie Sanders and Elizabeth Warren for the Democratic nomination, Elizabeth Bruenig opines on the difference between two strains of statism.

What is the difference between Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.)? …much of it comes down to the matter of regulation vs. revolution. For Warren, the solution to our economic ills already exists in well-regulated capitalism. “I believe in markets,”… Warren believes today’s socioeconomic ills are the result of high concentrations of power and wealth that can be resolved with certain regulatory tools and interventions. …for Sanders, those solutions come up short. ,,,Instead, he aims to transfer power over several key segments of life to the people — by creating a set of universal economic rights that not only entitle citizens to particular benefits (such as medical care, education and child care) but also give those citizens a say in how those sectors are governed: in short, democratic socialism.

They both sound like “stationary bandits” to me, but there are some nuances.

Elizabeth Warren basically favors private ownership but she explicitly wants politicians and bureaucrats to have the power to dictate business decisions.

Thomas Sowell points out this economic philosophy is fascism. But I’ll be more polite and refer to it as corporatism.

By contrast, as a self-declared socialist, Bernie Sanders should be in favor of nationalizing companies.

But, as reported by the New York Times, he actually sees himself as another Franklin Roosevelt.

Senator Bernie Sanders of Vermont offered a vigorous defense of the democratic socialism that has defined his five decades in political life on Wednesday… Mr. Sanders cast himself at times in direct competition with President Trump, contrasting his own collectivist views against what he called the “corporate socialism” practiced by the president and the Republican Party. And Mr. Sanders, 77, declared that his version of socialism was a political winner, having lifted Mr. Roosevelt to victory four times… Mr. Sanders…presented his vision of democratic socialism not as a set of extreme principles but as a pathway to “economic rights,”… He argued that his ideology is embodied by longstanding popular programs, including Social Security, Medicare and Medicaid, that Republicans have labeled socialist. …Mr. Sanders called for a “21st-century economic Bill of Rights,” which he said would address health care, wages, education, affordable housing, the environment and retirement.

I’ll make two points.

First, FDR may have won four times, but he was an awful President. His policies deepened and lengthened the Great Depression.

And his proposed “economic bill of rights” would have made a bad situation even worse. He basically said everyone has a right to lots of freebies without ever stopping to think about the impact such policies would have on incentives to lead productive lives.

For all intents and purposes, we wanted to turn this cartoon into reality.

Second, I don’t actually think there’s a significant difference between Sanders and Warren. Yes, their rhetoric is different, but they both want higher taxes, more regulation, additional spending, and more intervention.

Heck, if you examine their vote ratings from the Club for Growth or the National Taxpayers Union, it’s hard to find any real difference.

At the risk of making a radical understatement, neither of them is a friend to taxpayers.

But thinking about this issue has motivated me to modify my statism flowchart. Here’s the new version.

As you can see, I created a much-needed distinction between totalitarian statism and democratic statism.

And while Warren is on the corporatist side and Sanders is on the socialist side, I also put both of them relatively close to the Venezuela-style track of “incoherent statism.” In other words, I think they’re guided by vote buying rather than a cohesive set of principles.

P.S. I wrote last week about the emerging “anti-socialist” wing of the Democratic Party. Presumably they would be the “rational leftists” on the flowchart.

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