Calling Bernie Sanders a “socialist” reflects how much the center of
political gravity in the US has shifted to the right. Bernie is a classic social democrat, no
socialist he. One way to understand the
difference between these political positions, muddied by the infantile
political discourse, is to examine the role of the so-called public goods.
Public goods are products or services that have two
properties: they are non-excludable and non-rival. Non-excludability means it is too expensive
or impractical to exclude people unwilling or unable to pay for a good from
enjoying its benefits or utility.
Non-rivalry means that one person enjoying the utility of that good does
not diminish another person’s utility of the same good. For example, a loaf of bread is a private
good because it is rather easy to prevent non-payers from eating it, and if I
eat it then you will not be able to eat it.
Clean air is a public good because it is costly and impractical to
exclude those who do not pay for it from enjoying its benefits, and my
enjoyment of it does not diminish your enjoyment of it. As a consequence, public goods must be
delivered by government through compulsory cost sharing aka taxes, whereas
private goods may be delivered through voluntary exchanges aka market
transactions. This is Econ 101.
Contrary to what many bourgeois economists say, there is nothing
“natural” about being a public or a private good. All goods and services have a certain degree
of non-excludability and non-rivalry, depending on the institutional mode (or
“institutional sector” in the macro-economic parlance) of their production and
delivery, which in turn is defined by government policy. Take, for example, roads. If the government builds them using general
taxes and makes them available to everyone, they are public goods. That is, it is not possible to exclude non-payers
from using them, and one person’s using them does not diminish the utility of
another person using them. If the
government turns them into toll roads, however, they become private goods. Although they are still non-rival (unless
congested beyond capacity, but that is a temporary limitation affecting every
user equally), non-payers are prevented from using them. Another example is health care or education –
they can be a public good and funded by taxes or private goods and funded by
service fees paid by patients or students.
It is clear that it is the government policy that defines
not only which particular good is public or private, but also the overall balance
between public and private goods in the entire economy. Here is where it makes sense to distinguish between
different overall political doctrines governing the balance of such goods. They range on a continuum between two extreme
positions: on the “right” extreme virtually all goods in the economy are made
private, and on the “left” extreme virtually all goods are made public.
Of course, the real life regimes fall in between these two
extremes. Thus, ANARCHO-CAPITALISM,
often misleadingly dubbed “libertarianism,” eliminates most but not all public
goods. Public goods typically retained
under such a regime include the legal system enforcing contracts and protecting
private property, the military protecting property rights overseas, and certain
government service to businesses, such as compilation of economic statistics,
weather forecast, geological survey, or the maintenance of transportation
infrastructure etc.
The REGULATED variety of CAPITALISM expands the share of
public goods in the economy to government management of the economy, limited
public transit and education, as well a certain minimum of social protections,
such as old age or unemployment insurance, but most other goods remain private.
The SOCIAL DEMOCRACY (aka welfare state) further expands the
share of public goods in the economy by adding other types of services to the
mix, such as health care, expanded education services, public transportation,
public housing, maternity supports, old age and unemployment protection. However, most other goods, services and
assets are still private, and some public goods are funded by a combination of
public funds and private user fees, which makes these goods “mixed
public/private goods.”
SOCIALISM moves further toward the “left” by expanding
public goods even further. Under
socialism, most key industries produce public goods – that is goods that are
funded mostly by the public sector, although some limited user fees may be
used. These include not only social
welfare services provided in social democracy, but also key durable goods,
industry products, mining, agriculture, etc.
The institutional arrangement for producing and delivering such public
goods may vary from state to cooperative ownership of the production facilities
or some combination thereof. The share of private goods and assets is
relatively small and may include retail trade, some services (e.g. taxicabs,
catering, etc.), and small scale agriculture.
Variants of this system existed in the some Eastern European countries
of the x-Soviet bloc (Czechoslovakia, Hungary, Poland, etc.).
Finally GARRISON COMMUNISM is a system under which almost
all goods and most assets are public i.e. owned by government that controls
both their production and distribution, and the compliance with production and
distributions requirements is enforced by regimentation and military force. Private goods are limited to informal
exchanges of goods and services among households (aka “grey economy.”).
Variants of such a system existed in the former USSR during the Stalinist
period, China under Mao and Cambodia under Pol Pot. It would be safe to say, however, that the
only country that has such a system today is probably North Korea.
The US is a regulated version of capitalism, which the
Democrats want to maintain more or less “as is” and Republicans try to push to
the right toward anarcho-capitalism.
What Bernie Sanders proposes is to move the status quo to the left, to
incorporate more public goods available in a social democracy, but still
maintain the dominance of private goods (not to mention assets). So it not that far removed from the status
quo. If all his policy proposals were
implemented, the US would be a right-leaning social democracy that provides a
broader array of public goods than those available today, but not as broad as
those available in left-leaning social democracies, such as the Scandinavian
countries.
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