Perils of "Democratic Socialism"

By Ilya Somin.

"One of the most significant recent developments in left-of-center politics is the rise of "democratic socialism." Democrats are currently engaged in an important debate over whether this is a good direction for the party. They should heed prominent liberal legal scholar Cass Sunstein's warning: "Those who now favor large-scale change should avoid a term, and a set of practices, that have so often endangered both liberty and prosperity."

Prominent self-proclaimed socialists include Bernie Sanders (one of the front-runners for the 2020 Democratic presidential nomination) and Rep. Alexandria Ocasio-Cortez, a rising star in the party. Some recent surveys indicate that many more Democrats have a favorable view of "socialism" than "capitalism," though others show less support for it. Even a good many politicians who eschew the democratic socialist labels have endorsed some of the radical policies associated with it, such as the Green New Deal, "Medicare for All," and federal government-guaranteed jobs for all Americans, among others.

Historically, socialism—defined as government control over all or most of the economy—has led to mass murder, poverty, and oppression on an enormous scale. The experience of communist nations around the world is instructive. To avoid terminological confusion, it is worth noting that the communists saw themselves (correctly) as implementing socialism; "communism" was, on the Marxist-Leninist view, a later stage of social evolution none of these regimes ever actually claimed to have attained. The current horrible oppression in Venezuela (perpetrated by a socialist regime that generally does not claim to be communist), which has led to perhaps the biggest refugee crisis in the history of the Western hemisphere,  is just the latest iteration of the same pattern.

Nonetheless, current advocates of democratic socialism argue that this awful record isn't relevant to their proposals. They draw two important distinctions between their agenda and that of the socialist movements that caused such enormous suffering in other nations. First, they emphasize that these earlier experiments in socialism were undertaken by authoritarian regimes. By contrast, today's democratic socialists are committed to multi-party democracy. Mistakes and abuses of power will be curbed by electoral competition.

Second, we are assured that latter-day socialists don't actually mean to impose government control over the means of production. They just want greatly increased regulation and welfare state spending. Often, their agenda is analogized to the policies of Scandinavian nations, which have large welfare states, but remain relatively prosperous and free.

Unfortunately, these distinctions are not as reassuring as they might seem. The expansion of government power advocated by modern socialists is so great that it would put most of the economy under state control, even if much industry formally remained under private ownership. It goes far beyond any Scandinavian precedent. And it is unlikely that democracy can effectively constrain the abuses of such a leviathan state. It is also questionable that a government like that could remain democratic in the long run.

The Enormous Scale of the Democratic Socialist Agenda

The standard agenda favored by most democratic socialists –  single-payer health care, universal free college, and a guaranteed federal job for anyone who wants one—would cost some $42.5 trillion over a ten year period ($4.25 trillion per year). This would nearly double current federal spending levels, which are projected to total just under $4.75 trillion in fiscal year 2020. Federal government spending would rise from its current level of about 20% of GDP to 35-40% or more (depending on future economic growth and levels of spending on other programs, which is also projected to rise).

This does not include many parts, the "Green New Deal," endorsed by most democratic socialists. That would add another $10-15 trillion over the next decade, not counting items such as universal government-provided health care, which are already included above.

In combination with state and local spending (currently around $2.8 trillion per year, though some of that comes from federal grants), implementation of the democratic socialist agenda would ensure that government spending accounts for the vast majority of the economy. State and local spending would, very likely, also increase substantially if the democratic socialists get their way.

The socialist agenda is not limited to increased spending. They also advocate massive increases in federal regulation. Examples include a $15 minimum wage, greatly increased regulation of labor and corporate boards, expanded environmental regulation, expanded regulation of media and the internet, increased protectionism to keep out foreign goods, and so on. The combination of the $15 minimum wage (which even many liberal economists believe is likely to significantly reduce private sector employment) and guaranteed federal jobs would ensure that a large proportion of the work force would, over time, come to consist of direct employees of the federal government.

While many enterprises would officially remain under private ownership, implementation of the democratic socialist agenda would ensure that the federal government controls the lion's share of actual economic resources. If that happens, the US federal government would face many of the same problems of knowledge and incentives faced by previous socialist regimes. It too would have to figure out how to centrally plan the vast bulk of the economy. And it too would find that government planners lack the knowledge to make such a system work, and that it creates many perverse incentives.

The democratic socialist agenda goes well beyond the Nordic nations advocates sometimes cite as models. While these countries have comparatively large welfare states, they combine them with low levels of regulation and high openness to international trade. To take just one example, none of the Nordic nations have a national government-mandated minimum wage.

The Nordic nations actually come close to the United States (and occasionally even outscore it) on standard measures of economic liberty. Iceland (slightly ahead of the US) and Denmark (slightly behind) were statistically indistinguishable from the US in the latest Index of Economic Freedom ranking put out by the conservative Heritage Foundation. Finland and Sweden were only slightly lower. When Danish Prime Minister Lars Løkke Rasmussen tried to explain to Bernie Sanders that his country is not actually socialist, the latter should have listened. Indeed, what US democratic socialists advocate goes beyond the current level of government control of the economy in any Western European nation.

Democracy Can't Make Socialism Safe

Perhaps democracy will save us from any potential negative effects of bringing most of the economy under government control. If the government abuses its power or mismanages the newly socialized economy, we can just "vote the bastards out." Any aspiring American Lenin or Hugo Chavez will be voted out of office or—better still—never elected in the first place.

Unfortunately, the democratic element of democratic socialism is unlikely to save us from the severe risks of the socialist part. Voters in democratic systems can and do elect dangerous demagogues. Hugo Chavez was democratically elected.

Closer to home, our own voters elected Donald Trump. And he is far from the first illiberal demagogue who ever achieved political success in American history. Liberal Democrats should carefully consider what would happen if someone like Trump gets control of the levers of power in a democratic socialist state where the federal government controls most of the economy.

The danger of future demagogues aside, it is far from clear that even our current crop of democratic socialist leaders is immune to illiberal temptations. Bernie Sanders, our most prominent socialist politician, has a long history of supporting authoritarian socialist regimes abroad. He and others might not be averse to using the same sorts of tactics at home, if the opportunity arose.

Even when run by more conventional politicians, democracy is unlikely to be an adequate safeguard against the dangers of socialism. As Conor Friedersdorf points out, a democratic state in which the government controls most of the economy is one where unpopular racial, ethnic, or religious minorities will be at severe risk, as their personal and social lives will be far more under the control of the political majority than is the case today. Nothing in the nature of socialism somehow makes racial, ethnic, and religious prejudice disappear, or even diminish significantly. Consider the awful experience of minorities in numerous socialist nations around the world, ranging from the Soviet Union to Ethiopia.

A socialist state that controls most of the economy would also make it nearly impossible for voters to acquire enough knowledge to effectively monitor the government. It would greatly exacerbate the already severe problem of voter ignorance that plagues modern democracy. In a world where most voters—for perfectly rational reasons –  do not even know basic facts such as being able to name the three branches of the federal government, it is highly unlikely they will learn enough to properly monitor a socialist state. Most of the powers of government would instead fall under the control of politicians, bureaucrats,  powerful interest groups, or worse.

Finally, it is unlikely that a democratic socialist state will actually remain democratic in the long run. If the government controls the vast bulk of the economy, it can, over time, use its control over key resources to reward its supporters and suppress opponents. This has, in fact, actually happened in Venezuela, where the government has used such tools as its control over food resources to incentivize support for the regime, and forestall opposition.

In the US, such tactics might not be immediately effective because of our greater wealth, and because judicial review would curtail them. But these constraints are far from foolproof. American socialists could, for example, break judicial resistance through court-packing, a strategy successfully used by both left and right-wing authoritarians in other countries. Ominously, even some non-socialist Democrats now see court-packing as an attractive tool to wrest control of the Supreme Court back from Republicans.

Even if Bernie Sanders or some other self-described socialist becomes president, he is unlikely to be able to quickly implement the full socialist agenda, or transform the US into another Venezuela. But if left unchecked, the growing acceptance of democratic socialism on the left increases the odds that such things could happen over time.

Former Colorado Governor John Hickenlooper recently told his fellow Democrats that "socialism is not the answer" to the problems that ail American society. Many in the audience of activists and party stalwarts booed.  But they should instead take his advice to heart."