Bernie Sanders, Democratic Socialism, and The Other America

The Legacy of Michael Harrington, Hillary Clinton, and the Marxist Critique (Part One of a Five Part Series)

As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems.

– Pope Francis I, Laudato Si

Democrats and Republicans, and all those who hold fast to the divine status of the market, clearly do not want a national discussion about free markets, capitalism, and those for whom free markets are really designed to serve. This is why the richest 1% in the United States is alarmingly concerned about Bernie Sanders, a democratic socialist who has gained serious political momentum in electoral politics with his success in Iowa and New Hampshire. What elites fear is that the problems associated with capitalism, and the rationale for their elite status, will reveal that the outcomes of the unfettered market result in class warfare. And all of this has captivated America’s youth, who remain transfixed on Sanders’ message of radical inequality and the subversion of democratic governance through Citizens United.

The media spin Bernie’s popularity amongst young voters as merely symptomatic of youthful inexperience. They paint Sanders as a slick politician who promises pipe dreams of free college tuition, student debt modification, and free universal health care. But what the media and elites truly fail to address is the fact that even the parents of the young voters ask, “Why not?” The elites fail to acknowledge the feelings that young voters and their parents have when together they recognize publicly that, if all major industrialized countries have such social benefits, then so should they.

Just as we all must pay for our mistakes in life, Bill Clinton is paying the price for his mistakes right now. His laundry list of follies includes the likes of Larry Summers, Robert Rubin, Alan Greenspan, Phil Graham, and all the lunatic elites who have facilitated the hijacking of the US—those who deregulated the economy by abolishing the Glass-Steagall, and thereby creating fraudulent financial investments based on financial derivatives (betting against you own investments) which they then replaced with economic collapse, short sales on homes, foreclosures, job loss, wage cuts, underemployment, wage stagnation, survival credit card debt, usury level student loans, and the longest war in the history of the US. The 1% has provided an apologetic for the continued free market and economic massacre. They blame Obama even though the economy has improved modestly, and yet, the aftermath is still personal devastation, even with the help of TARP funds, HARP funds, and Obamacare.

None of this affected the 1%; their stock portfolios boomed. In fact, the 1% claim they would like to improve things even more by cutting social security and replacing it with a private Wall-Street-funded pension. How’s that for generosity? Nothing to be afraid of since the new Dodd-Frank legislation has fixed the problem… Right! Maybe the 1% can explain how Goldman Sachs recently settled a 5 billion dollar lawsuit over fraudulent mortgages without any executive having to serve jail time.  So much for reform and breaking up the big banks! Dodd-Frank did nothing! Other gestures of generosity include increasing the age for retirement to 67, as well as growing the economy on the backs of workers by demanding 4% GDP growth to fix the sluggish economy—just like the old command economies of the Soviet Union and Eastern Europe. What remains unstated is that, to do this, workers will need to work longer and harder without the overtime, compensation, or benefit packages that should come with all of this. The problem here is not about capital, competition, and the profit motive. It is not about the threat of a socialist workers’ utopia where the state owns everything and redistributes wealth based on need. The problem is about political corruption and elite actors being held captive to big money and corporate interests so as to legitimize pure avarice wrapped in free market dogma.

The rest of us? We are expendable. Any discussion or question regarding the equitable distribution of wealth and workers’ rights and their creation of surplus profit is essentially verboten. Nor will the 1% allow any discussion in this regard, whether media, elite academics and universities, or corporate financial apologists. Such discussion is easily shut down by simply writing it off as socialism, the new “s” word. And what CNN (TimeWarner), MSNBC (Comcast), and FOX News (Ruppert Murdoch) want is for no one to seriously trace the money. If they do, they will find out that the 1% invest their money, not only in Wall Street, but also in NASDAQ and other markets around the world. And these markets reciprocate with great loyalty.

To be fair to the capitalist class, they have no real fear of the “s” word as such, or Bolsheviks and anarchists. After all, they believe that Bernie Sanders is not electable as a socialist even though the country and economy has been held together for the past seventy years by socialist programs and policies to mitigate, in microeconomic terms, market failures. What the 1% dread at a visceral level is that their bourgeois existence, justified through the impartial microeconomic laws of the universe, will be exposed, not by a rival economic theory such as socialism, but by the deeper levels of existential human suffering that have finally crucified the middle class and poor at the most fundamental level—their economic existence. Who can argue rationally against this? When personal concrete experience contradicts the sacred dogma of economic theory, the theory needs to change. This Marxist concept, coined as “praxis,” needs to be understood and utilized as the intellectual sledge hammer to undo Citizens United and the power-elite who want to desperately conceal the rift between people’s personal economic tragedies and things economically “sacred.” Go ahead and thank Antonio Gramsci (Prison Notebooks), Paolo Freire (Pedagogy of the Oppressed), and the entire movement of critical social theorists of the Frankfurt School (Max Horkheimer, Theodor Adorno, Jürgen Habermas), jailed, imprisoned, or banished because they dared to question the divine status of the market and the nature of authoritarianism that kept liberal markets in place.

The middle class and underclass had no real chance to organize against this since they had no power or effective community organizing efforts like those of Saul Alinsky. The union movement made a go of it in Europe and the United States, but the unions in the US soon became victims of their own success. In other words, they had it so good that they no longer wanted to “rock the boat” for greater economic rights. But it is radically different now because the middle class is starting to feel it slip away – their economic well-being – toward a new address on skid row. The 1% dread this revelation, and it is frankly too late. The new skid row middle class know they are expendable. There is no denying it. This is the reason why the electorate in 2016 will turn on establishment Wall Street democrats and embrace Bernie Sanders. This is why Hillary and Bill, Republicans and libertarians, media freaks like Chris Matthews, write off Bernie Sanders as just a youthful fad. The truth that they want avoided? That the liberal market economy is only for a few, as in the 1%. And all of this undermines market shares for Comcast, Time Warner, and Fox News.

This can all be changed with a socialist avant-garde demanding an economic bill of rights to make the economy accountable democratically to all citizens as “the peoples economy.”

Trump and his cult following of neo-fascists are another story altogether. And how can Trump possibly win the loyalty of voters whose class interests he opposes? Even though Trump tells the public he is funding his own campaign, he in no way will sever his ties from corporate elites who benefit from his class status and he from theirs. Do his followers really believe he has their best interests at heart, especially if this means greater economic justice which will, without doubt, invariably conflict with his economic self-interest? Trump’s cryptic remarks that wages in the US are already too high reveal where this will lead: downward pressure on wages to maximize profits. This is the real “art of the deal” and will be the starting point for Trump’s negotiations in the future should the hustler become president of the United States.

Insofar as it manifests itself today in the US and around the world, capitalism is “on trial.” This will no doubt entail an analysis questioning the underlying causes of poverty and inequality and this may lead to questioning the liberal notions of the private ownership of capital and the priority of capital over labor. Naturally, liberals and Keynesians will talk about managing the problems of the market through tweaking public policy, etc. They will argue that the boom-bust cycle and the downward pressure on wages that result from private capital investment does indeed result in outcomes such as unemployment, underemployment, poverty, and all the assortment of health-related maladies that accompany these disasters. This is arrogantly dismissed as an acceptable transaction cost on the way to an eventual bull market, understood in terms of the most efficient means known in the world today for allocating scarce resources through the free market. Yet, Bernie Sanders is relentless in focusing on the issues and has not lost sight of the real outcomes of the billionaires getting richer, the middle class disappearing, and the poor, left in the dust.

The mixed or regulated economy since the New Deal and Great Society programs were supposed to solve the problems of liberal capitalism. These remedies, based on socialist strategies implemented in Northern and Western Europe, have worked well to stabilize economic conditions in these European countries, even in the midst of Europe’s current “great recession.” We argued above, nevertheless, that socialist remedies have always been in place in the US, going way back to the Sherman Antitrust Act in 1890. Yet, if both theories, capitalism and socialism, are understood as flexible models that can work harmoniously, it should not be a problem at least as both have been applied intelligently over the past two centuries. In industrialized and post-industrialized countries, capitalism has been able to take on a variety of forms, socially, culturally, politically, and ethically. As an economic system, it has been able to morph into a Scandinavian model, Western European model, Australian-New Zealand model, Japanese model, Chinese model, Russian model, English model, Irish model, and US model. All of these are different versions of capitalist development and for that matter socialist development. But without public sector support and public financial investment, the capitalist system on its own will collapse, according to Nobel economists Simon Kuznets and Kenneth Arrow since extensive public infrastructure investment is needed to maintain the entire system.

We argue here that capitalism is dependent on pubic financial support without which the entire system would collapse. Public infrastructure investment is imperative, and this above all includes education, understood as a public good. What is needed to make capitalism work better in the US in particular is more public funding in providing free health care, free public education, public financial support in housing, etc., since markets tend to provide these “commodities” to a shrinking pool of consumers as Kuznets and Arrow have argued. The remedy is regulation of the capitalist system and prioritization of public financial support to maintain a healthy economy. Whether defined as democratic socialism or social democracy, the market economy that we know needs to be understood as an entire public good, or as Elinor Ostrom describes it, a “common pool resource.”  The market needs to be understood and dealt with as a public resource, not a private enterprise subject to the laws and rules of traditional private property and is too important as a strategic economic asset to place in the hands of individuals seeking their own rational interests often at the expense of others. Not all is a zero-sum game, but too often economic matters result in this relationship. This is one of the major themes of Bernie Sanders and democratic socialism, and why the Bern is a very dangerous man. The Friedman-Greenspan School of libertarian thought has only undermined capital development by undermining the public infrastructure to support its development, regardless of the nomenclature as capitalist or socialist.

Edward Martin is Professor of Public Policy and Administration, Graduate Center for Public Policy and Administration at California State University, Long Beach, and co-author of Savage State: Welfare Capitalism and Inequality; Mateo Pimentel lives on the Mexican-US border, writing for many alternative political newsletters and Web sites. He can be reached at: Read other articles by Edward Martin and Mateo Pimentel.