Bernic Sanders and Democratic Socialism

We can take heart that a recent poll showed that 47% of Americans said they could vote for a socialist. But a lot higher percentage might be willing to do just that if they had a better idea of what democratic socialists like Bernie Sanders actually stood for.

An article I just read by the historian Eric Foner (http://www.thenation.com/article/how-bernie-sanders-should-talk-about-democratic-socialism/) points out that democratic socialism has a long and proud tradition in the US politics. Foner argues that Sanders should be drawing on that history rather than using Denmark as an example. I agree.

The premises of democratic socialism are that government should be the agency that protects society from the excesses of rapacious capitalism and that guarantees every individual basic human rights.

Democratic socialists argue that, left to itself, capitalism does not necessarily promote the common good. Examples abound. As Piketty documents in Capitalism in the Twentieth Century, left to it itself, capitalism produces gross inequality, which is both morally and economically indefensible and a threat to democracy. Left to itself, capitalism results in "bubble" economies (in the stock market, housing, commodities, etc.) which inevitably lead to systemic crises. Left to itself, capitalism fails to account for environmental costs of production, leaving us with levels of pollution and global warming that are a threat to our very existence. In essence, democratic socialists want government to regulate capitalism to protect it from its own excesses.

Democratic socialists also argue that every human being has inalienable rights, among those being the "right to life, liberty and the pursuit of happiness". These rights must be guaranteed to all Americans and include: the right to participate in American democracy on an equal basis with every other American; the right to be secure in their person, protected not only from other individuals, but from arbitrary and capricious actions of government; the right to a job with a living wage and financial security when they are no longer able to work; the right to the best health care available; and the right to a quality education so that they have the opportunity to reach their potential. Government exists to guarantee these rights and provide the resources to make them a reality.

The basis for these rights and government's obligation to provide for and protect them can be found throughout US history, from political programs like those of the Populists and the New Deal, to the Four Freedoms of FDR, to the heroic battles of the abolitionist, labor, civil rights, LGBT and women's movements. It's a proud history of struggle, one that is unfortunately not always taught in schools. It is time to draw on that history and support its current manifestation. Whether he wins the nomination (and the presidency) Bernie Sanders has an opportunity to clarify and promote this vision. This is, as educators say, "a teachable moment".

Between a Rock and a Hard Place

There was an interesting article in the paper today. It noted that automakers were concerned about the possibility of an increase in interest rates, which the Fed has been considering. Such an increase, the article went on the say, would seriously cut into sales, and force the companies to cut back on production and/or make riskier and longer term loans to continue their brisk business (the best since 2006). It didn’t mention builders, but one can assume the same to be true there and most probably also for other durable goods manufacturers

This is a clear indication of the problem the Fed is facing. The current lackluster “recovery” (which, by the way, is the third or fourth anemic recovery in a row) is so precarious that the Fed has had to keep interest rates below zero (when inflation is factored in) to maintain it. This has a number of negative consequences, the most significant of which is that the Fed has no wiggle room should the economy slowdown from its current pace. In other words, the monetarists seem to have run out of effective tools to manage the economy.

Add to this the fact that many major economies outside the US (China, European Union, Japan) are weak (which precludes the US exporting its way out of a possible recession) and the fact that the average business cycle is about 10 years (and the last recession started 7 years ago). Not a pretty picture.

The cause is undoubtedly the extreme and increasing inequality. As Thomas Piketty pointed out in his book, Capital in the Twentieth-First Century, the extreme level of inequality is a central feature (we might even say, contradiction) of capitalism throughout most of its history, except for the extraordinary period between WW I and the 1970s. Two factors account for the reduction of inequality during that period – first, the destruction of capital that resulted from two World Wars and the Great Depression, which greatly reduced the “claim” of capital on the national income, and second, significant government actions to redistribute income during that period.

If this analysis is correct, then the only way to avoid a crisis the likes of which we haven’t seen since the end of WW II, is income redistribution, on a scale which probably goes well beyond what even progressive politicians like Bernie Sanders are proposing. With the current political dysfunction at the national level, will it be possible for the US to move in this direction or are we destined to head further down the rabbit hole?

George Vlasits

October 18, 2015

Book du Jour

American Nations (http://www.colinwoodard.com/americannations.html) was extravagantly recommended to me when I was in Florida over the previous winter. I tried to get my hands on a copy as soon as I returned to DC but wasn't able to do so until very recently. Seems the library's copies were that much in demand. So, being something of a contrarian, the praise for the book mostly made me feel a bit skeptical. It couldn't be that good, could it? Well, maybe it is & maybe it isn't but it's good enough, that's for certain. The book is at it's most authoritative in the early chapters when it is purely a work of North American colonial history. We truly started out not as a nation at all nor even as closely related & supportive settlements. For the most part the original colonies very independent, with little in common, & divergent interests and these differences were not obliterated but only briefly put aside by the growing dispute with the mother country. So, the United States of America was very much a marriage of convenience which has persisted through all of its history explaining much of the nature of our constitution, our geographic spread across the continent & our shifting disputes, wars, enmities & allegiances to the present day. At least that is what the book attempts to describe & in my estimation it does a very creditable job of it. In other words, the author tells us a great deal we hadn't otherwise been taught & answers many questions about how our history has unfolded.

No book is perfect - except religious ones, of course - & what seems to be lacking in this one is hard evidence. Logically it holds together wonderfully well but one wonders if other interpretations might serve equally. There are numerous citations & claims that historical voting records support the stated conclusions. At this point, I have not subjected these claims to critical scrutiny but feel somewhat reassured that the citations exist. Furthermore, the book offers little in the way of solutions to our present state of impass except hypothesizing that if the present course persists the US as we know it cease to exist as presently constituted; that is might be split into constituent parts, that certain regions of the present US, Canada, & even Mexico might form new federations, & that the nation or nations that ensue might resemble the EU in terms of regional independence vs central power. At minimum the book is thought provoking & I in turn recommend it highly.