It's been all too common for pro-socialist politicians here and elsewhere to talk up Sweden, to offer up it's "pro-socialist" policies and welfarate-state programmes as examples for us all to emulate. "Look," they say, "they have socialism and prosperity!" Problem is, as Swedish writer Johan Norberg explains in this guest post, that Sweden was most pro-socialist way back in the Seventies, when it was squandering the riches of a century, and it's only become prosperous as it's abandoned that notion, and embraced instead "a new period of liberalisation and of economic reform” ...

Johan Norberg: Bernie Sanders’ Vision of Sweden Is a 1970s ‘Pipedream’

When Senator Bernie Sanders and others like him talk about Sweden as a socialist paradise, they are promoting a tax‐​the‐​rich “pipedream” from the 1970s that never really existed, said Johan Norberg, a Swedish author, historian of ideas. Sweden today is a “much better and much freer place” than it was in the 1970s, says Norberg from his home in Stockholm.

“So today, if Bernie Sanders wants to imitate Sweden, he would have to reform Social Security, partially privatize it,” said Norberg in an interview with ReasonTV, a division of Rea​son​.com. “He would have to … abolish property taxes and inheritance taxes, and stuff like that, implementing national school voucher systems…. So, Sweden today is not what he remembers from the 1970s. It’s a much better and freer place than it was back then.”

Norberg, also a documentary filmmaker, earned his M.A. in the History of Ideas at Stockholm University. His latest book is The Capitalist Manifesto, which was praised by Elon Musk on X. During the ReasonTV interview above, Norberg was asked to respond to some of Sanders’ glowing comments about Sweden, which the self‐​described socialist had made during his 2015 presidential campaign.

In an inserted news clip, Sanders said, “In countries in Scandinavia, like Denmark, Norway, Sweden, they are very democratic countries obviously. Their voter turnout is a lot higher than it is in the United States. In those countries, health care is a right of all people. In those countries, college education, graduate school is free. In those countries, retirement benefits, child care are stronger than in the United States of America. And in those countries, by and large, government works for ordinary people and the middle class rather than, as is the case right now, in our country, for the billionaire class.”

Bernie Sanders: "Look, ah, Sweden!"

When news host George Stephanopoulos then said that Republicans would run an attack ad accusing Sanders of wanting to make America more like Scandinavia, the senator replied, “That’s right, that’s right.”

ReasonTV host Zach Weissmuller then asked Norberg to comment on Sanders’ remarks. Norberg replied,

"This is why Sweden is not a libertarian paradise. We might have free markets, but we do have a very generous welfare state. It’s true that many of these things are handed out by the government – it’s funded by the government at least through private providers. But the thing is we pay for these things ourselves. That’s an incredibly important point to make. Because there is this pipedream of Bernie Sanders and others that this will somehow be paid for somehow by the rich.”

Norberg continued:

“But Sweden learned in the 1970s. You can pick one: a big generous welfare state or you can make the rich pay for it all. You can’t have both. If you have a universal generous welfare state, and make the rich pay for it all, they will stop being rich. They will move. They will stop starting those businesses, the Ikeas of the future, and will move. Instead, you have to get most of the taxes from low‐ and middle‐​income households. That’s the dirty little secret of the Swedish welfare state.

“The socialists love the poor taxpayers because they are reliable, loyal taxpayers. They don’t dodge. They don’t move to Monaco. They don’t have tax attorneys. So we have the bulk of our government revenue coming from regional and local income taxes, which are flat. Income taxes are not progressive…. Also, things like a value‐​added tax at 25%, in general, on most goods. It’s obviously regressive. The poor pay as much as the rich when they buy food, in taxes.

“This means that when the OECD club of mostly rich countries look at different tax systems around the world, they say that the Swedish system is one of the least progressive tax systems of all. Much less progressive than the United States because America’s welfare state is so small, so you can rely more on the rich. Whereas here, we all have to pay for it.

“The Swedish welfare state mostly just redistributes over an individual’s life cycle. We get lots of stuff when we’re young, in preschool and school, and then we work hard and pay for it all, and then we get much of it back in health care and retirement benefits. Which mostly means, yes, we get lots of stuff but we pay for it all….

“It’s so interesting that socialists keep coming back to Sweden and I think that’s because all their favorite countries constantly fail. Every Cuba and Venezuela ends up with bread lines, millions trying to escape from that horror show. But they always have Sweden. It seems so friendly and successful and yet socialist.

“We have been socialist in Sweden and we have been successful but never at the same time. That’s what Sanders and the others fail to realize. We had that period in the 1970s and 1980s when Sweden was doubling the size of public consumption, raising taxes, regulating everything – price controls, what have you. This is the moment when Bernie Sanders and all those who are sort of stuck in the 1970s, this is what they still remember: ‘Look at Sweden! They’re socialist! But they’re also one of the richest countries on the planet! It seems to be working in Sweden.’

“The problem, of course, is that it’s like that old joke, how do you end up with a small fortune? Well, you start with a large fortune and then you waste most of it. That’s what Sweden did in the 70s and 80s. We were one of the richest countries on the planet before this experiment. And this was based on a 100‐​year period of limited government, free markets, free trade, as late as 1960. We had lower taxes than the United States and most European countries. This brought us all the wealth and all those successful international companies, the Ikeas and stuff, that brought us so much wealth that politicians thought they could just redistribute everything and begin to just jack up spending and taxes.

“Well, they couldn’t. Because the 70s and 80s, that’s the one period in modern Swedish economic history when we lagged behind other countries. This is the moment when we didn’t create a single net job in the private sector, and when entrepreneurs and businesses left Sweden. Ikea left Sweden. Tetra Pak left Sweden. Most successful entrepreneurs left because it was impossible to do business in Sweden. This all ended in a terrible financial crash in the early 1990s.

“So that was a brief period of time and it’s one that we don’t want to go back to in Sweden. Not even Swedish socialists – even they say, okay, we went too far. The Social Democrat finance minister at the time said it was actually absurd and perverse in many ways, what we were trying to do. Since then, Sweden has again become successful. But that’s based on a new period of liberalization and of economic reform.”

Perhaps that is the Swedish model policymakers should try to emulate.

* * * * * 

This post first appeared at the Cato Institute blog.

" 'Democratic political professionals believe that nominating a self-proclaimed democratic socialist is a recipe for disaster for their side.' The reality is that on the non-zero chance that he might win [the presidency], it would be a recipe for disaster for everyone, not just for Democrats." #QotD

" 'There are lots and lots of longtime Democratic political professionals who believe that nominating a self-proclaimed democratic socialist is a recipe for disaster for their side.' What these political professionals are worried about is that Sanders may end up losing in a landslide and then lose the House and the Senate at the same time because there is still a toxic phobic reaction to socialism. The reality is that on the non-zero chance that he might win, it would be a recipe for disaster for everyone, not just for Democrats. A catastrophe both economically and politically."

    ~ Steven Kates, from his post 'From Democratic Socialists to Socialist Democrats'
.

#FeelTheBern | Venezuela edition [updated]

 

I hope youthful advocates of socialism have been watching the acopalypse in slow motion that is being inflicted upon Venezuelans by their experiment with socialism. It’s working out exactly as badly for them as anyone could have predicted.

The country’s oil riches – ”more proven oil reserves than any country in the world” – have not saved them from what has been inexorable in every worker’s paradise yet devised.

First, with price signals and profits banned, there are serious shortages: food, medicine, toilet paper, electricity. Indeed, their richness in oil reserves hasn’t even made oil immune to the inevitable: unable to get it out of the ground in sufficient quantity, Venezuela is now importing oil. And with shortages of food, “Hungry Venezuelans Hunt Dogs, Cats, Pigeons as Food Runs Out: Economic Crisis and Food Shortages Lead to Looting and Hunting Stray Animals.”

And with that, inevitably: inflation. Desperate to “fix” things, or at least to appear to, printing money has delivered only an abundance of printed paper bills, and an inflation rate of around 720%. (And paradoxically, Venezuela doesn’t even have enough money now to pay for the paper to print more money to keep up with its hyperinflation.)

And with threats not working, the next thing is outright thuggery (the only thing of which the socialist state is never short: President Maduro is now preparing to seize factories and jail their owners.

And: crime. With the police otherwise occupied, Venezuela now enjoys the highest crime rate in the world – one Venezuelan murdered every 28 minutes.

Forget the stories of socialised medicine too: the economic emergency has become “a public health emergency, claiming the lives of untold numbers of Venezuelans” as doctors and staff flee and -- without medicine, electricity or even gloves or soap – hospitals collapse into something last seen in Dante’s hell.

This has all happened in just under a decade. That’s how rapidly collapse can happen.

What happens next?

What have rulers of every socialist paradise done every time to take their subjects’ mind of disaster?

Yes, you guessed it. From today’s news headlines:

• LA TIMES: Unrest continues to grip Venezuela as president threatens to make opposition-controlled legislature 'disappear'
• BLOOMBERG: Venezuela Prepares for Biggest Military Exercise in History

The Lesson? That full-blown socialism delivers neither peace nor prosperity – just penury and perdure.

Make sure that everyone you know under forty is watching the present disaster play out.

Watching and, hopefully, learning.

[Hat tip Foundation for Economic Education, thoughtcrime, HedgedIn ]

UPDATE:

• “About the same time I was listening to [John Lennon] sing “Imagine,” this item came across my news feed:
        “’By morning, three newborns were already dead. The day had begun with the usual hazards: chronic
        shortages of antibiotics, intravenous solutions, even food. Then a blackout swept over the city, shutting
        down the respirators in the maternity ward. Doctors kept ailing infants alive by pumping air into their
        ungs by hand for hours. By nightfall, four more newborns had died. “The death of a baby is our daily bread,”
        said Dr. Osleidy Camejo, a surgeon in the nation’s capital, Caracas, referring to the toll from Venezuela’s
        collapsing hospitals.’
  “Venezuela has some of the world’s largest supplies of oil, with more proven oil reserves than Saudi Arabia. But about 15 years ago, the late president Hugo Chavez set out to impose a socialist revolution, making a particular point about his great munificence in providing free health care for everyone. In pursuit of this revolution, Chavez crushed every industry outside the oil sector and brought the state-owned oil company under his control. The result has been a long spiral into poverty and oppression. Now we can see the results: socialism literally kills babies.
      “It began by imagining no possessions…”
  Imagine No Possessions, Imagine Venezuela – Robert Tracinski, TRACINSKI LETTER

.

Will a "Socialist" Government Make America Freer? [updated]

 

Voters might want Denmark, says Jason Kuznicki in this guest post, but they might get Venezuela.

---

“Socialism” is a weasel word.

Consider that the adjective “socialist” applies commonly — even plausibly — to countries with vastly different ex ante institutions and with vastly different social and economic outcomes. Yet Canada, Norway, Venezuela, and Cuba can’t all be one thing. Does socialism mean substantial freedom of the press, as in Norway? Or does it mean the vicious suppression of dissent, as in Venezuela?

We need more clarity here before we decide whether socialism is a worthwhile social system, and whether, as Will Wilkinson recommends, liberty lovers ought to support a socialist candidate for president.

An approach that clearly will not do is to apply the term “socialism” to virtually all foreign countries. Shabby as that definition may be, some do seem to use it, both favorably and not. The result is that “socialism” has grown popular largely because a lot of people have concluded that the American status quo stinks. Maybe it does stink, but that doesn’t endow “socialism” with a proper definition.

Let’s see what happens when we drill down to the level of institutions.

Now, we might personally wish that the word “socialism” meant “the social system in which the state owns the means of production and runs the major industries of the nation.”

This is a workable definition: It has a clear genus and differentia; it includes some systems, while excluding others; and it’s not obviously self-referential. It’s also the definition preferred by many important political actors in the twentieth century, including Vladimir Lenin.

Lenin’s definition was not a bad one. But it’s far from the only current, taxonomically proper definition of socialism. As Will Wilkinson rightly notes, socialism also commonly means “the social system in which the state uses taxation to provide an extensive social safety net.”

And yet, as Will also notes, “ownership of the means of production” and “provision of a social safety net” are logically independent policies. A state can do one, the other, both, or neither. Of these four possibilities, there’s only one that can’t plausibly be called a socialism — and not a single state on earth behaves this way!

Better terms are in order, but I know that whatever I propose here isn’t going to stick, so I’m not going to try. Instead I want to look at some of the consequences that may arise from our fuzzy terminology.

One danger is that we may believe and support one conception of “socialism” —only to find that the agents we’ve tasked with supplying it have had other ideas all along: We may want Norway but get Venezuela. Wittingly or unwittingly.

Before we say “oh please, of course we’ll end up in Norway,” let’s recall how eager our leftist intelligentsia has been to praise Chavez’s Venezuela, [or, historically, Stalin, Mao, Castro and Pol Pot]— and even declare Venezuela et al an “economic miracle” — until the truth became unavoidable: The “miracle” of socialism in Venezuela turned out to be nothing more than a transient oil boom. Yet leftist intellectuals are the very sorts of people who will be drawn, by self-selection, to an administration that is proud to call itself socialist.

There’s some resemblance to a “motte-and-bailey” process here: they cultivate the rich, desirable fields of the bailey, until they are attacked, at which point they retreat to the well-fortified motte. The easily defensible motte is the comfortable social democracy of northern Europe, which we all agree is pretty nice and happens to have quite a few free-market features. The bailey is the Cuban revolution.

This motte-and-bailey process does not need to be deliberate; it may be the result of a genuinely patchwork socialist coalition. No one in the coalition needs to have bad faith. An equivocal word is all that’s needed, and one is already on hand.

Even when we look only at one country, the problem remains: We may only want some institutional parts of Denmark — and we may want them for good reasons, such as Denmark’s relatively loose regulatory environment. But what we get may only be the other institutional parts of Denmark — such as its high personal income taxes. (Worth noting: Bernie Sanders has explicitly promised the higher personal income taxes, while his views on regulation are anything but Danish.)

Will Wilkinson thinks that electing someone on the far left of the American political spectrum could be somewhat good for liberty, but I’m far from convinced. Remember what happened the last time we put just a center-leftist in the White House: By the very same measures of economic freedom that Will uses to tout Denmark’s success, America’s economic freedom ranking sharply declined. And that decline was the direct result of Barack Obama’s left-wing economic policies. We got a larger welfare state and higher taxes, but we also got much more command-and-control regulation.

Faced with similar objections from others, Will has already performed a nice sidestep: He has replied that voting for Sanders is — obviously — just a strategic move: “Obviously,” he writes, “President Bernie Sanders wouldn’t get to implement his economic policy.” Emphasis his.

To which I’d ask: Do you really mean that Sanders would achieve none of his economic agenda? At all? Because I can name at least two items that seem like safe bets: more protectionism and stricter controls on immigration. A lot of Sanders’s ideas will indeed be dead on arrival, but these two won’t, and he would be delighted to make a bipartisan deal that cuts against most everything that Will, the Niskanen Center, and libertarians generally claim to stand for. Cheering for a guy who would happily bury your legislative agenda, and who stands a good chance of actually doing it seems... well, odd.

There is also a frank inconsistency to Will’s argument: The claim that Sanders will make us more like Denmark can’t be squared with the claim that Sanders will be totally ineffective. Arguing both is just throwing spaghetti on the wall — and hoping the result looks like libertarianism.

Would Sanders decriminalise marijuana? Or reform the criminal justice system? Or start fewer wars? Or spend less on defense? Or give us all puppies? I don’t know. Obama promised to close Guantanamo. He promised to be much better on civil liberties. He promised not to start “dumb wars” or bomb new and exotic countries. He even promised accountability for torture.

In 2008, I made the terrible mistake of counting those promises in his favor. We’ve seen how well that worked out.

It’s completely beyond me why I should trust similarly tangential promises this time around — particularly from a candidate like Sanders, whose record on foreign policy is already disturbingly clear. None of the rest of these desiderata have anything to do with state control over our economic life, which would appear to be the one thing the left wants most of all. (Marijuana: illegal in Cuba. Legal in North Korea. Yay freedom?)

Ultimately, I think that electing someone significantly further left than Obama will not help matters in any sense at all, except maybe that it will show how little trust we should put in anyone who willingly wears the socialist label. The only good outcome of a Sanders administration may be that we’ll all say to ourselves afterward: “Well, we won’t be trying that again!”

Now, I am prepared to believe, exactly as Will writes, that “‘social democracy,’ as it actually exists, is sometimes more ‘libertarian’ than the good old U.S. of A.” That’s true, at least in a few senses. Consider, for instance, that Denmark isn’t drone bombing unknown persons in Pakistan using a type of algorithm that can’t seem to deliver interesting Facebook ads. (One could say that, as usual, Denmark is letting us do their dirty work for them, with their full approval, but I won’t press the point.)

Either way, that’s still a pretty low bar, no? Meanwhile, there remains plenty of room for us to imitate some other bad things — things that we aren’t doing now, but that Denmark is doing, like taxing its citizens way, way too much. The fact that these things are a part of the complex conglomerate known as northern European social democracy doesn’t necessarily make them good, exactly as remote control assassination doesn’t become good merely by virtue of being American.

In short: Point taken about social democracy. At times, some of it isn’t completely terrible. But that only gets us so far, and not quite to the Sanders slot in the ballot box.

---

Jason Kuznicki is editor ofCato Unbound, and his ongoing interests include censorship, church-state issues, and civil rights in the context of libertarian political theory. He was an assistant editor of the Encyclopedia of Libertarianism. Prior to working at the Cato Institute, he served as a production manager at the Congressional Research Service. Kuznicki earned a PhD in history from Johns Hopkins University in 2005, where his work was offered both a Fulbright Fellowship and a Chateaubriand Prize.
This post first appeared at the Foundation for Economic Education.

RELATED POSTS:

• “Right-wing and left-wing populism (read Trump and Sanders) are both anti-establishment, but that doesn't mean they are good for liberty?”
  Hating the Establishment Is Not the Same as Supporting Liberty – Jeffrey Tucker, ANYTHING PEACEFUL
• “Less than three decades after the fall of the Berlin Wall, socialism seems to be undergoing something of a revival. A self-professed ‘democratic socialist’ is running for the U.S. Democratic Party presidential nomination, and he is running neck and neck with a party icon. Polls show that more than a quarter of Americans have a favorable opinion of socialism, which might not sound so bad until you learn that that includes 43 percent of those under age 30, and 42 percent of Democrats. Meanwhile, barely half of Americans have a favourable view of capitalism. Democrats, in fact, are as likely to view socialism positively as they are capitalism.
      “What accounts for this collective historical amnesia?”
  Is Socialism Making a Comeback? – Michael Tanner, NOT PC
• “The idea that government could redistribute income willy-nilly with impunity did not originate with Senator Bernie Sanders. On the contrary, it may have begun with two of the most famous 19^th Century economists, David Ricardo and John Stuart Mill.   Karl Marx, on the other side, found the idea preposterous, calling it ‘vulgar socialism’.”
  The Fundamental Fallacy of Redistribution – Alan Reynolds, CATO AT LIBERTY
• “When Karl Marx—in the first chapter of the Communist Manifesto, that small pamphlet which inaugurated his socialist movement—claimed that there was an irreconcilable conflict between classes, he could not illustrate his thesis by any examples other than those drawn from the conditions of precapitalistic society….
      “It is difficult to imagine how different these conditions were from present-day conditions.”
  Socialism: Class Warfare vs. Harmony of Interests – Ludwig Von Mises, CAPITALISM MAGAZINE

[Pic by Shutterstock]

UPDATE: … and on that point above recalling “how eager our leftist intelligentsia has been to praise Chavez’s Venezuela,” let’s not forget that lion of the left the great Noam Chomsky and who he’s had hard-ons for over the years:

[Hat tip carton: Anoop Verma‎]

Quote of the Day: “Sanders says he wants to make the United States more like Finland, Sweden, and Denmark … ”

 

“[Bernie] Sanders says he wants to make the United States
more like Finland, Sweden, and Denmark. And those countries
do indeed rank higher than the United States in the Cato
Institute’s Human Freedom Index … . But Sanders wants
to emulate those countries in the ways they are less free
than the United States … not in the ways they are more free …”
~ Michael Cannon, from his post ‘A Libertarian Argument for Bernie Sanders?’

 

RELATED POSTS:

• “I think of Sweden as a kind of Rorschach test, a kind of psychological test where you have some ink which doesn’t portray a particular picture or anything, but you see what you like to see.
      “You see what you think about in the back of your mind and in your subconscious. So some people see this as a nice, open economy – a globalised, free-trade economy. Others look at the government and think, oh, it’s the perfect, big government, socialist country. And others see other things. It could be free love or the pop music. People tend to like Sweden. That’s something we’re very aware of.”
  No, Sweden Doesn't Have it Figured Out (with Johan Norberg)
• “If I could put the economics of Bernie Sanders into a nutshell, it would be this: Burden private enterprise with one directive after another, and then demonise it when it ultimately falls down under the awful weight of taxes, higher costs, and mandates. While many people believe that instituting the Sanders economic agenda would help turn the USA into another Sweden or Denmark, the more likely outcome would be turning this country into another Venezuela.”
  The Economics of Bernie Sanders
• “By now, however, the point should be well made. There might be many things the Left finds attractive about the Nordic model, but it is not the socialist utopia of their imaginings.”
  Socialist utopia proves elusive – Liam Hehir, STUFF
• “Sweden often gets held up as an example of how socialism can work better than markets. But, as Norberg shows, Sweden’s history in fact points to the opposite conclusion.”
  How Laissez-Faire Made Sweden Rich – Johan Noberg, LIBERTARIANISM.ORG

 

Quote of the Day: A message for Bernie Sanders supporters

Pic from news article: ‘'Venezuela Takes Dramatic Step Towards Food Rationing'

 

“The alleged goals of socialism were: the abolition of poverty,
the achievement of general prosperity, progress, peace and
human brotherhood. The results have been a terrifying failure
—terrifying, that is, if one’s motive is men’s welfare.
    “Instead of prosperity, socialism has brought economic
paralysis and/or collapse to every country that tried it. The
degree of socialisation has been the degree of disaster. The
consequences have varied accordingly.
    “In more fully socialised countries, famine was the start, the
insignia announcing socialist rule—as in Soviet Russia, as
in Red China, as in Cuba. In those countries, socialism
reduced the people to the unspeakable poverty of the pre-
industrial ages, to literal starvation, and has kept them on
a stagnant level of misery….”
    “No man of authentic benevolence could evade or ignore so great a horror on so vast a scale.”
     ~ Ayn Rand, from her 1962 article ‘The Monument Builders’

RELATED POSTS:

• “New voters are flocking to old-school anti-capitalists. But do they really know what they’re being asked to imbibe?”
  So, what’s socialism, Bernie? Part 1 – NOT PC
• "Yeltsin asked customers about what they were buying and how much it cost, later asking the store manager if one needed a special education to manage a store. In the Chronicle photos, you can see him marveling at the produce section, the fresh fish market, and the checkout counter. He looked especially excited about frozen pudding pops. ...
      "In Yeltsin’s own autobiography, he wrote about the experience at Randall’s, which shattered his view of communism, according to pundits. Two years later, he left the Communist Party and began making reforms to turn the economic tide in Russia. You can blame those frozen Jell-O Pudding pops."
  When Boris Yeltsin went grocery shopping in Clear Lake – BLOG.CHRON.COM
• “…  It means, at least given my preferences, I am today materially richer than was John D. Rockefeller in 1916.  And if, as I think is true, my preferences here are not unusual, then nearly every middle-class American today is richer than was America’s richest man a mere 100 years ago.”
  Most Ordinary Americans in 2016 Are Richer Than Was John D. Rockefeller in 1916 – Don Boudreaux, CAFE HAYEK
• “[Bernie Sanders] is upset with a political and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged. He believes that we have a two-tiered society that increasingly dooms millions of our fellow citizens to lives of poverty and hopelessness. He thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field.
  I agree with him [says Sanders’s bete noire Charles Koch]. …
      “At this point you may be asking yourself, ‘Is Charles Koch feeling the Bern?’
      “Hardly.
      “I applaud the senator for giving a voice to many Americans struggling to get ahead in a system too often stacked in favor of the haves, but I disagree with his desire to expand the federal government’s control over people’s lives. This is what built so [so much cronyism and so] many barriers to opportunity in the first place.”
  Charles Koch: This is the one issue where Bernie Sanders is right – Charles Koch, WASHINGTON POST
• “Perhaps people can be forgiven for having come to the belief that capitalism is synonymous with Wall Street shenanigans or bank bailouts. That’s what politicians, academics, and the media have pounded into us for years. …
      “After all, if one looks at the long course of human history, our existence was pretty much hand to mouth for most of it. All that began to change in the 1700s with the development of modern — that is, [mostly pro-]capitalist — economics.
      “But one doesn’t have to go back 300 years to see the advantages of free-market capitalism. Consider that in the last 25 years, a period during which much of the world has embraced free markets, a billion people have been lifted out of poverty, and the global poverty rate has been slashed from more than 37 percent to less than 10 percent.
      “It’s not just the decline in poverty that tracks with the adoption of free markets and capitalism. Literacy rates increase and infant mortality declines as countries adopt market-based economies. Life expectancy rises, and people’s health improves. Even the environment gets cleaner.
      “And opportunities open up for women and minorities. Indeed, nothing challenges entrenched elites like the ‘creative destruction’ of free-market capitalism.”
  Is Socialism Making a Comeback? – Michael Tanner, NOT PC
  

Burning Sandals for General Secretary

 

The wires vibrated, the tumblers turned, and out dropped this irregular despatch from our regular correspondent Suzuki Samurai

---

Has there ever been a more ghastly bunch of presidential candidates for Americans to choose from? Ever? Ever at any time at all?!

I thought that Mitt the Git Romney or Obamamessiah was a bad enough choice.

But Trump? Seriously?

Cruz? What?!?

Hairy Clit-on? Yuk!

Where’s the choice?

Where’s there something to choose from?

The death-by-a-thousand-cuts course that the US has been on for years is painful to watch – even more painful to be part of it, I imagine.

The hope that America once represented is now hopeless. The liberty lost. The choices nugatory; the candidates negligible at best.

So listen up: All you folk who vote for the “least-bad” of the very bad candidates, it’s time to admit it. You're just stalling.

Hoping that in some small way your awful choice for president is going to save you...at least a little bit.

Hoping that there will be at least a bit of a roll-back.

Hoping they will at least slow the growth of the Fed beast down.

Hoping America won't go further down the toilet – evern further down.

Well hope away kids. You know where hope for change got you all.

So on the other hand, you could abstain from votingaltogther. You could join the don't-vote-it-only-encourages the bastards abstentionists so you can claim you weren't part of sullying your own integrity. Hmm, tempting. But all it really does is encourage the bastards to get away with screwing you regardless.

So what to do?

Here’s my answer:  to all the the fed-up, the knocked, the American libertarians, the Objectivists and the abstentions, I say to all of you get out and vote like all hell. Get out and vote like hell for one Bernie Ilyich Sanders and just get it all over with.

Do it! Bring the curtain down. And then get away as far as possible cause it'll get ugly. Real ugly.

But while you're away get organised. Get other liberty minded people educated; raise funds; and be ready to fill the vacuum before the black fascists fill the void left over from the red ones.

It's like keeping alive a horse with a broken leg – shoot the fucking thing, and go out and get a new one.

Oh, and best of luck.

Suzuki  !

Is Socialism Making a Comeback?

 

Guest post by Michael Tanner

Less than three decades after the fall of the Berlin Wall, socialism seems to be undergoing something of a revival.

A self-professed “democratic socialist” is running for the U.S. Democratic Party presidential nomination, and he is running neck and neck with a party icon. Polls show that more than a quarter of Americans have a favorable opinion of socialism, which might not sound so bad until you learn that that includes 43 percent of those under age 30, and 42 percent of Democrats. Meanwhile, barely half of Americans have a favourable view of capitalism. Democrats, in fact, are as likely to view socialism positively as they are capitalism.

What accounts for this collective historical amnesia?

Perhaps people can be forgiven for having come to the belief that capitalism is synonymous with Wall Street shenanigans or bank bailouts. That’s what politicians, academics, and the media have pounded into us for years. [Hard to make the case we’re fully capitalist when a government central planner sets the whole econonomy’s interest rate – Ed.] When was the last time you saw a movie where businessmen weren’t greedy and evil, if not outright murderers. Perhaps we need to be reminded of what free-market capitalism really is, and how much better it has made our lives.

After all, if one looks at the long course of human history, our existence was pretty much hand to mouth for most of it. All that began to change in the 1700s with the development of modern — that is, capitalist — economics.

But one doesn’t have to go back 300 years to see the advantages of free-market capitalism. Consider that in the last 25 years, a period during which much of the world has embraced free markets, a billion people have been lifted out of poverty, and the global poverty rate has been slashed from more than 37 percent to less than 10 percent.

It’s not just the decline in poverty that tracks with the adoption of free markets and capitalism. Literacy rates increase and infant mortality declines as countries adopt market-based economies. Life expectancy rises, and people’s health improves. Even the environment gets cleaner.

And opportunities open up for women and minorities. Indeed, nothing challenges entrenched elites like the “creative destruction” of free-market capitalism.

It is free-market capitalism that provides the innovation and opportunity that leads to the increase in choices we have today. Choices in where we work, how we live, and, yes, the products we buy. From new drugs that save lives to labour-saving devices that reduce the drudgery of household work to the device you are reading this essay on, capitalism drove these developments each step along the way.

There was a reason, after all, why West Germany built the Mercedes-Benz, while East Germany produced the Trabant.

Bernie Sanders may think it’s terrible that we have a choice of deodorants, but Venuzuelans have no choice at all in a Venezuelan supermarket.

Need more? According to the Human Freedom Index, more economic freedom correlates with more personal freedom. Just consider countries with state-controlled economies and how little personal freedom they allow. On the other hand, countries with free-market economies tend to be free in other ways, too.

Of course, when Bernie and his followers talk about socialism, they don’t really want to turn the U.S. into Venezuela or Cuba. They want to have socialism while keeping all the benefits of capitalism — having their cake and eating it too.

That’s why Bernie frequently cites Sweden and Denmark as examples of socialism. This ignores the fact that both countries have long since understood that you can’t really tax and spend your way to prosperity. Call them ‘SINOs’ — Socialists in Name Only.

In fact, when it comes to international trade and business regulations, both Sweden and Denmark are less socialist than the United States, according to the most recent Economic Freedom of the World rankings. In the 1990s, Sweden introduced school choice into elementary education, and it has even partially privatised its social-security system. Denmark recently cut the duration of unemployment benefits, and both countries have significantly reduced their corporate-income-tax rates; the Danish government has slashed the rate from 32 percent in 2000 to 23.5 percent last year. That can’t be what Bernie Sanders wants, can it?

In the end, most of socialism’s defenders wind up defining the term down to where it is nearly meaningless. Sanders likes to describe Social Security and public schools as examples of socialism. Then again, with Social Security running almost $26 trillion in the red and the disaster that the public schools have become, maybe they aren’t the best examples to point to.

Chances are many of socialism’s current fans like it because they think it means “free stuff.” But of course there’s no such thing as a free lunch. The U.S. can’t pay for the programs we have now. The deficit is on its way up, and the national debt just topped $19 trillion.

If we wanted to finance expenditures at the level of European social democracies, we’d have to roughly double the amount of tax revenue that the federal government currently collects. And those taxes wouldn’t fall just on the rich. Recall that Sanders’s health-care plan would impose substantial new taxes on the middle class. We’d sacrifice economic growth and prosperity in exchange for a bunch of bureaucratic programs that sound good but don’t actually work. [And Sanders’s “fantasy economics” has been denounced as “voodoo” by no less than Paul Krugman and four former Democratic chairs of the Council of Economic Advisers – Ed.]

What is missing from this campaign is a candidate who can unapologetically speak to the power and promise of free-market capitalism. But that’s hard to do while calling for subsidies for your favourite business or using government to seize property that people don’t want to sell you. For that matter, it’s hard to preach free markets while asking the government to prop up wages by restricting the flow of workers or demanding taxes — er, tariffs — on products that are built in places you don’t like.

After all, it’s not enough just to win elections. If we really want a better future for this country, we need to win the battle of ideas. And socialism, despite its new-found popularity, remains as bad an idea as it ever was.

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Michael Tanner is a senior fellow at the Cato Institute and the author of Going for Broke: Deficits, Debt, and the Entitlement Crisis.
This post first appeared at the Cato at Liberty blog.
Cartoon by Nick Kim.

 

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No, Sweden Doesn't Have it Figured Out (with Johan Norberg)

Guest post: Tom Woods interviews Johan Norberg

Bernie Sanders,” Tom Woods writes, “United States senator from Vermont and self-described socialist, has surprised everyone with the vigour of his 2016 presidential campaign, both in terms of size of his crowds and the strength of his fundraising.
    “His message, on the other hand, is garden-variety leftism, particularly in economics, where he speaks as if the private sector can be ceaselessly burdened with no ill effects on anyone, except a bunch of greedy fat cats who deserve what they get.”
     One of the garden-variety myths the moron is peddling is about Sweden and the alleged success of their brand of welfare-state socialism. As Scott Sumner points out:

The heart of the Democratic Party is now with Bernie Sanders, whatever the polls show. And let’s not have anyone accuse me of McCarthyism, he calls himself a “socialist.” When asked, the head of the Democratic Party couldn’t think of a single difference between socialists and Democrats. And please don’t insult my intelligence by talking about Sweden. Sweden is not a socialist country. Venezuela is socialist. When Sanders starts advocating free trade and investment, liberal immigration rules, privatization, zero inheritance tax, 100% nationwide school vouchers, a $0/hour minimum wage rate, then come back to me with your Sweden talk. For now, he just wants the bad parts of Sweden.

In the first chapter of his latest book Bernie Sanders is Wrong, [which he’s made available for free download]Tom Woods asks Swedish author, lecturer and documentary film-maker Johan Norberg about the truth behind what everyone hears about Sweden …

WOODS: Sweden comes up with surprising regularity in the United States, and it comes up not because people have some interest in Swedish history and culture, I’m sorry to say.

It’s because they want to use Sweden as an ideological bludgeon with which to beat people who are skeptical of state power. So I want to talk to you, as somebody who was born in Sweden, who is speaking to us from Sweden right now, and who is very knowledgeable about Sweden, to help clear this up for an American audience.

Are Swedes aware that their society is held up as a model for how political organization and the economy ought to be arranged?

NORBERG: I think we are aware of that. We have noticed throughout the years that people actually tend to like Sweden for some reason, perhaps because we’re kind of small and insignificant, and we’re not very threatening. So people tend to think of Sweden as a nice, decent place, peaceful. We don’t bother people.

And then they tend to like different aspects of what they see. I think of Sweden as a kind of Rorschach test, a kind of psychological test where you have some ink which doesn’t portray a particular picture or anything, but you see what you like to see.

You see what you think about in the back of your mind and in your subconscious. So some people see this as a nice, open economy – a globalized, free-trade economy. Others look at the government and think, oh, it’s the perfect, big government, socialist country. And others see other things. It could be free love or the pop music. People tend to like Sweden. That’s something we’re very aware of.

WOODS: You have an article alleging that Sweden actually succeeded economically not because of welfare state spending and government intervention, but both in spite of those things and prior to those things. So can we go back and look at the history of Sweden?

When do we begin to see robust economic growth, and what was the role of the state at that time?

NORBERG: When you start to think of when Sweden was really a successful economy that the rest of the world looked at, you begin to notice Sweden in the 1950s, ’60s. In 1970, Sweden is one of the richest countries on the planet. I think the per-capita income is the fourth most prosperous on the planet, and that’s after a 100-year period of rapid economic growth – one of the fastest in the world.

Probably only Japan beat us during those years. So you would have to say that this starts sometime in the 1870s, which is interesting, because at that time Sweden had gone through a liberalisation and deregulation process.

Between 1840 and 1870, we had a major political movement of classical liberalism, of a laissez-faire liberal attitude where they wanted to reduce government to open up to free trade, deregulating industry and so on.

And it’s sort of a funny anecdote: the minister of finance, who was one of the pioneers of these reforms, left in the mid-1860s after having really liberalised and opened Sweden up, and his opponents said, oh, now you’re leaving because you don’t want to see the failures that you brought upon us and the problems that Sweden will experience after these reforms.

But what happened was that growth really took hold. If you want to look at one particular set of numbers, between 1860 and 1910, right before the First World War, real wages in Sweden increased by 25 percent per decade in manufacturing. That’s much faster than before and much faster than afterwards -- which is interesting, because that’s 20 years before the Social Democrats ever got power in Sweden.

So the real boom happened during this laissez-faire period. Public spending was still below 10 percent, and Sweden was one of the most open economies in the world.

WOODS: This seems to be a common feature of a lot of left-wing commentary. They’ll look at a snapshot of a society in a particular year without looking at the video, so to speak, of that society. What had been going on prior to that snapshot?

We see this in the debates over the regulatory state in the U.S., for example. We’ll look at a regulatory agency, and we’ll see that after they created it, the result was that – for example – there were fewer workplace fatalities. What they don’t ask is: what was the already existing trend in workplace fatalities before we got this agency? And it turns out that workplace fatalities were already falling dramatically! Likewise, in the story of Sweden, we don’t get what you just told us about the growth in wage rates before all the interventions came, but that’s three-quarters of the story!

NORBERG: Exactly. That’s an incredibly important point. A lot of people look at Sweden and say – and especially, they used to do that when we were at the peak of the big government and the welfare state in the 1980s – look, Sweden is very prosperous, and at the same time, taxes and spends heavily. It’s a very almost socialist economy, and yet they are rich. Why is that? Well, it reminds you of the old joke: how do you get a small fortune?

Well, you start with a big one, and then you make a couple of mistakes, and then you end up with a small fortune. We had this tremendous growth during the years when Sweden had the most open economy and the smallest government. Even when the Social Democrats began to get power in the 1930s, they understood this economic model, and they didn’t want to interfere too much. They were actually heavily influenced by a couple of famous classical liberal economists.

[TW note: “Classical liberalism” refers to 19th-century liberalism, which was much closer to modern libertarianism than it was to modern American liberalism.]

So most of the time, they were open for business and chose free trade. As late as the early 1950s, Sweden had lower taxes and less public spending than in the United States and the rest of Europe, and that gives you a perspective on why this happened. You built this big fortune under these circumstances.

In early 1970, Sweden was one of the richest countries, and then the Social Democrats began to hike public spending, increase taxes, and so on, but they could do that only because we already had that wealth because of this free-market period -- and also, obviously, because Sweden had stayed out of two world wars. That meant that our industry was intact, we exported to both sides, and the young men of the country were still alive and able.

WOODS: I think a skeptic might come back at you and say, if Sweden really had been doing that well, then how could the arguments for the welfare state have gotten any traction?

NORBERG: Yeah, and that is a good question. It’s one that both historians and economists think about quite a lot when that happens, but actually, it follows a fairly normal pattern in most countries around the world.

You get rich, and then you begin to take that wealth for granted. He who has satisfied his thirst turns his back on the well in a way. You begin to take it for granted. You don’t think of the preconditions for creating more wealth, building these new businesses, and the kind of fierce competition and openness that it takes.

So instead, you begin to demand all of it at once. You begin to build these pressure groups who want more access to this wealth and more evenly distributed wealth. And that’s, I think, what began to happen in the 1970s. We were so rich so that we thought that we couldn’t make any mistakes anymore.

We could throw out the economics textbooks, and we could begin to think of other things, like a fairer distribution of wealth, how to make sure that everybody got a piece of the action.

WOODS: And that is one of the arguments that is made by American progressives today. They will say: whatever else you can say about Sweden, it has more economic equality than we see in the United States.

NORBERG: And that is true, partly because of more redistribution. But also, even here you need some historical perspective to understand where we’re coming from. Sweden had a fairly equal distribution compared to many other countries during this openness period as well, partly because it’s a very small country -- even today just 10 million inhabitants -- and a homogenous country, which meant that there weren’t these huge diversities when it came to wealth. Sweden didn’t even have a feudal period like the other European countries.

So we were all, in a way, property-owning farmers when we started out. So we had a history of more equality, more trust, societal trust, between people. This social trust, though, also made it easier for people to accept bigger government. Because when that happened in other places, people were very suspicious: what happens when they take our money away? Will they just divert it to their own use?

Will it be inefficient? Will it be bureaucratic? Well, Sweden has always had in a way a fairly efficient and non-corrupt public sector and civil servants. And a lot of trust: you don’t think of the government historically as someone who is there to loot and take it all away from you. They’re more like your neighbours, in a way.

So you trust them, and then you trust them a bit too much. And of course, all power corrupts in some way. And that’s what happened during these years, when the government grew rapidly in the 1970s and the 1980s and public spending actually doubled in just two decades, from 30 percent to 60 percent. That was really the start of the welfare state in Sweden.

Click here to download your FREE copy and keep reading…

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Johan Norberg -- a native of Sweden, a classical liberal and a globalist -- is an author, lecturer, and documentary filmmaker.  Visit his website at www.JohanNorberg.net. 
This post first appeared at Laissez Faire Books.

$1,500 Sandwich Illustrates How Exchange Raises Living Standards

“Man stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons… Man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in their favour…
     It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity but to their self-love…
…[B]y directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention….
…. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” [Emphasis mine]
~Adam Smith, from The Wealth of Nations

"Here is a worker whose daily wages is four francs. With two of them, he can purchase a pair of stockings. If he alone had to manufacture those stockings completely—from the growing of the cotton to the transporting of it to the factory and to the spinning of the threads into material of the proper quality and shape—I suspect that he would never accomplish the task in a lifetime."
~ Frederic Bastiat, from his Economic Harmonies

$1,500 Sandwich Illustrates How Exchange Raises Living Standards
Guest post by Chelsea German

What would life be like without exchange or trade? Recently, a man decided to make a sandwich from scratch. He grew the vegetables, gathered salt from seawater, milked a cow, turned the milk into cheese, pickled a cucumber in a jar, ground his own flour from wheat to make the bread, collected his own honey, and personally killed a chicken for its meat. This month, he published the results of his endeavour in an enlightening video: making a sandwich entirely by himself cost him 6 months of his life and set him back $1,500.

(It should be noted that he used air transportation to get to the ocean to gather salt. If he had taken it upon himself to learn to build and fly a plane, then his endeavour would have proved impossible).

The inefficiency of making even something as humble as a sandwich by oneself, without the benefits of market exchange, is simply mind-boggling. There was a time when everyone grew their own food and made their own clothes.  It was a time of unimaginable poverty and labour without rest.

The greater the number of people involved in exchange, the more beneficial the process becomes. This morning, thanks to international trade, I am drinking coffee grown in Latin America, viewing a computer screen with eyeglasses made in Europe, and typing this blog post on a keyboard made in Asia. Fortunately, freedom to trade internationally has improved, on average, around the world. Increased trade has helped raise living standards and decrease global poverty.

However, the recent trend in the United States is less positive. If trade protectionist politicians, like Bernie Sanders on the left and Donald Trump on the right, have their way, then U.S. freedom to trade internationally may deteriorate further. They put down trade by claiming that it harms the U.S. economy and destroys jobs. Yet, there is a widespread agreement among economists that free trade is key to prosperity. (Learn more about the relationship between increased trade and jobs here).

This morning, as you drink your coffee, take a moment to consider where it comes from. You probably would not be drinking it right now if it were not for trade. This video elegantly draws attention to the myriad ways in which the exchange of goods and services across national borders touches lives and helps raise living standards. Almost everything you use is the product of a complex web of human cooperation, often extending beyond your country. Even something as simple as a bag of groceries or a pencil is the end result of a “symphony of human activity that spans the globe.”

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Chelsea German is the managing editor of HumanProgress.org, and a researcher at the Cato Institute.

Follow her on Twitter.

Her post was reposted from the Cato at Liberty blog.

The Economics of Bernie Sanders

Bernie Sanders is not a new Mao or Marx. He’s really just a modern New Dealer recycling old New Deal plans and rhetoric. And, just like the original, Sanders’s New Deal would do nothing to end the current economic malaise, and much to prolong it, says guest poster William L. Anderson.

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As the political campaign of Hillary Clinton continues to run aground, Democrats are flocking to the campaign of Bernie Sanders, the self-described “socialist” US senator from Vermont who has been a fixture in that state for more than three decades. Not unlike the presidential campaign of Ron Paul, Sanders is drawing large, enthusiastic crowds, though to a very different message—one of increased state control of the US economy.

Obviously, when a person running a campaign based upon socialist principles is drawing attention and big crowds, we might ask just what does Sanders mean by “socialist,” and what would he do if he were elected president of the United States? To better answer those questions, I am taking a closer look at what we would call the “economics” of Bernie Sanders.

What Do We Mean by “Socialism”?

Before looking at Sanders’s platform, however, I believe it is important to note that when socialists speak of “victories” in the economy, they are not talking about actual results, but rather political achievements in the forms of laws being passed that mandate certain policies. Whether or not these policies actually achieve what socialists claim will be accomplished is another story altogether, but results themselves are irrelevant to socialists. Power is.

This should surprise no one because, after all, socialism is based upon political control of the economy. From each according to his ability, said Marx, to each according to his need.  True (or at least original) socialists believe that state agents via the “magic” of their authority should assess the takings from those of ability, and allocate all resources to where there is the greatest need. Political representatives, not surprisingly, determine what constitutes the greatest need—and what products of ability should be taken. The state would take ownership of all factors of production, and then wisely determine the needs and how production of goods would fulfil them.

Ludwig von Mises in 1920 in his short work, Socialism (three years later expanded into a book), exploded the socialist myth by pointing out that in a world of scarce resources, economies needed private ownership, prices, profits and losses to determine where resources should be directed. The early years of the “experiment” of the Soviet Union proved Mises correct, and socialists then sought to redefine what socialism actually meant.

In the USSR, and later in China and North Korea, the state took ownership of factors of production, but tried to create a parallel economy by using shadow prices and production functions via the mechanisms championed by Polish communist Oskar Lange, who admitted that Mises had pointed out serious flaws in the original plans of socialists. We also know how that “experiment” turned out, which is why there no longer is a USSR, China has abandoned much of the economics of Mao, and North Korea is a failed state where most people live in grinding poverty.

But people like Bernie Sanders, while maybe not rejecting the old socialism spiritually, nonetheless have embraced a “socialism” in which government takes ownership of large portions of what has been produced by private enterprise and transfers wealth from one group of people to another. A look at the Sanders website spells out his brand of “socialism” that he says is based upon what Nordic countries like Sweden, Denmark, and Norway have done, levying high taxes with governments using that funding for social programs like medical care and other public welfare initiatives.

Secondary Socialism

A number of people have pointed out that the Sanders “programme” is not socialism per se, but rather is something based upon socialising the results of private enterprise, or what one might call secondary socialism. The Bernie Sanders regime would take control of some of the produce of private enterprise, as opposed to taking outright control of factors of production, which would remain in private hands. If this reminds one of the fascism of the 1930s, that is because Sanders is promoting a version of the governing models of Germany under Adolph Hitler and Italy under Benito Mussolini.

Of the two, Sanders certainly is closer to Mussolini. Like Sanders, Mussolini called himself a socialist and was a leader in the Italian Socialist Party. Like Sanders, Mussolini decried “profiteers” and the wealthy, and spoke out against political corruption. Like Sanders, Mussolini spoke of a larger “national purpose” and sought to harness nationalism as a political force. Like Sanders, Mussolini sought to impose more and more controls on Italian businesses in order to direct production in a way to satisfy political purposes. Like Sanders, Mussolini built political power by appealing to Italian voters by saying that other Italians were well-off because they had gained their wealth on the backs of the poor.

Having similar economic proposals to Hitler and Mussolini does not make Sanders either of those two men, and it is important to emphasise that while Sanders regularly employs the powerful political tool of appealing to voter resentment of others, he is not advocating the kind of genocide that ultimately helped to characterise the fascism of Central Europe in the 1930s and 40s. Bernie Sanders is an economic nationalist, and economic nationalism was at the heart of European fascism, but we do not want to make unwarranted accusations against Sanders, either.

At the same time, I do not want to let Sanders totally off the hook. He promotes economic nationalism and has built his campaign upon resentment, the kind of which Henry Hazlitt wrote in 1966 in his famous, “Marxism in One Minute.” Hazlitt wrote:

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. (Emphasis mine)

Fostering resentment breeds consequences that cannot really be called unexpected. As one moves through the website for the Sanders campaign, there is plenty of resentment for others. First, there is the ubiquitous “One-Percent” that is the main focus of the typical Sanders stump speech:

This campaign is sending a message to the billionaire class: “you can’t have it all.” You can’t get huge tax breaks while children in this country go hungry. You can’t continue sending our jobs to China while millions are looking for work. You can’t hide your profits in the Cayman Islands and other tax havens, while there are massive unmet needs on every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America, if you refuse to accept your responsibilities as Americans.

While I would agree wholeheartedly that the US economy is in serious trouble, it is not because of the “greed” of billionaires. It is because the US government, through the Federal Reserve System, has created what David Stockman has called the “casino economy” that has substituted trading of sovereign debt and monetary manipulation for a real economy with interest rates that reflect actual economic fundamentals. Like the Bush and Clinton administrations before it, the Obama administration has promoted political entrepreneurship and demonised market entrepreneurship.

Sanders’s List of Recycled Twentieth-Century “Solutions”

Americans are not jobless because some people are not paying “their fair share” of taxes; they are jobless because the US government insists on directing resources from higher-valued uses to lower-valued uses, as determined by consumer choice. They are jobless because Washington insists on remaking the economy in its own image. There is nothing in the entire Sanders campaign that would change any of the things that vex the US economy the most.

So, what does Sanders propose to “revitalise” the US economy? Here are some things listed on his website:

• Raise taxes on US corporations (ironically, corporate tax rates in the Nordic countries are substantially lower than current corporate taxes in the USA, something that has escaped Sanders’s notice);
• Raise the minimum wage to $15 an hour;
• Expand the reach of labour unions and vastly expand their membership;
• Make it illegal for US corporations to manufacture goods abroad, and then sell those goods in the USA;
• Impose new taxes on financial transactions;
• Spend at least a trillion dollars on building and repairing roads, bridges, and utilities;
• Create a “youth jobs programme” in which unemployed young people are given government-sponsored jobs (Sanders sees no connection between high minimum wages and youth unemployment);
• Enact “equity pay” that will “guarantee” that women are paid the same as men for comparable work;
• Break up banks and financial institutions;
• Enact a Canada-style single-payer healthcare system;
• Provide free tuition for all public colleges and universities;
• Expand Social Security benefits;
• Require businesses to provide 12 weeks of paid family and medical leave, at least 10 days of paid vacation a year, and seven days per year of paid guaranteed sick leave.

Notice that there is nothing in the Sanders platform that calls for “nationalisation” of the means of production, nor does he propose to do away with the price system. In other words, Sanders’s vision of socialism is not what Mao or Trotsky or Lenin proposed, yet there is not one thing in the entire platform that would reverse the dangerous economic trends of the past decade.

Instead, Sanders proposes to direct huge amounts of resources in the direction of constructing something akin to a European welfare state. To put it another way, Sanders wishes to “turn back the clock” to create or promote social and economic structures that already have been undermined by the modern “sharing” economy.

If one reads Sanders’s platform from another perspective, it would be the New Deal. Indeed, there is nothing Sanders has written or said from the stump that would not be reminiscent of a New Deal rally (with the possible exception in appealing to black Americans, which was not part of the Democratic Party agenda in the 1930s, as well as Sanders’s appeal to furthering the Sexual Revolution). Bernie Sanders pushes an economic agenda that is frozen in time.

The problem, economically speaking, is that Bernie Sanders proposes nothing that actually would enable entrepreneurs to help bring about a true economic recovery. In Sanders’s world, entrepreneurs are parasites and employers are oppressors who seek to harm their employees, and wealth is defined by how much governments have in their treasuries.

If I could put the economics of Bernie Sanders into a nutshell, it would be this: Burden private enterprise with one directive after another, and then demonise it when it ultimately falls down under the awful weight of taxes, higher costs, and mandates. While many people believe that instituting the Sanders economic agenda would help turn the USA into another Sweden or Denmark, the more likely outcome would be turning this country into another Venezuela.

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Bill Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland. His Ph.D. in economics is from Auburn University, and he serves as an associate scholar with the Mises Institute. He has published numerous articles and papers on economics and political economy, including articles in The Independent Review, Reason Magazine, The Free Market, The Freeman,Public Choice, The American Journal of Economics and Sociology,Quarterly Journal of Austrian Economics, and others.
This post first appeared at the Mises Daily.

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