Bernie’s Doomed Democratic Socialism

Thanks to Bernie Sanders, “Democratic Socialism”, by which he means a cornucopia of state-supplied benefits paid for by squeezing billionaires, is now all the rage. And according to Bernie and his fans, this vision is hardly Utopian -- generous womb-to-tomb entitlements work just fine in Scandinavia.

Predictably, the clamor for DS stresses the “free stuff” -- free education, including college, single-payer comprehensive medical care, universal state-funded daycare, subsidized housing, and countless other “free” or nearly free goodies.

Unfortunately, little is said about price tags and, even more importantly, total silence surrounds whether an arrangement that thrives in Norway can similarly flourish in the U.S. It is assumed that people and their values are world-wide interchangeable so if all Norwegians suddenly departed and Somali immigrants replaced them, Norway’s democratic socialism would scarcely miss a beat.

Absolute nonsense -- and if that were true, Democratic Socialism would be universal, even in dirt-poor sub-Saharan Africa.    

Begin by acknowledging the obvious -- successful Democratic Socialism requires mountains of tax revenue to finance all the handouts. Absent sufficient income, everything is empty rhetoric. Put colloquially, Democratic Socialism requires flocks of Golden Geese, all happy to lay ample golden eggs.

In practice, this means large numbers of profit-making, taxpaying businesses. Absent these, the economy is just a giant Ponzi scheme where government extracts money from one welfare recipient to bestow it on to another. This need for generating wealth is easily forgotten when fantasizing about all the forthcoming free stuff. Nor do fans of Democratic Socialism appreciate that an angry goose can hide its eggs from egg collectors or fly to friendlier climates if squeezed too hard.

Those feeling “the Bern” may not realize it, but Scandinavia is a hotbed of big-time capitalism. According to the Forbes 2000, a rating of the world’s largest companies, multi-billion dollar revenue firms include Stavanger (an oil and gas giant), Nordea (banking), A P Møller-Maersk (shipping), Volvo, SKF, Nokia and many, many more.

These big cash-generating firms, in turn, need thousands of skilled employees who dutifully show up, properly perform their jobs, and otherwise allow these private sector firms to earn the profits financing all the “free” stuff. Think of it this way: would Volvo stay in Sweden, let alone be able to pay the taxes if their workforce were a bunch of illiterates baffled by cutting edge robotic technology? Would any quality-conscience consumer own a Volvo if manufactured by incompetents?     

The citizen-related demands of successful Democratic Socialism further requires that people not torture the Golden Goose for more than it can produce. Tradeoffs are always necessary so generosity in one area requires frugality elsewhere.

Consider financing a “free” a university education. Yes, higher education in Scandinavia is generously government subsidized but this is financially feasible since overall educational costs elsewhere are kept under control. Envisage Swedish bureaucrats trying to fund low-tuition universities when millions and millions of krona must be allocated to disastrous K-12 schools with their armies of school police and electronic security, additional staff to manage out-of-control disruptive students, specialists in remedial education to teach basics a second or third time, scores of experts to develop new ways to uplift chronic strugglers, millions for school repair that results from vandalism and similar money-consuming obligations.

Democratic Socialism also only flourishes where people gladly pay for their government services. It's hard to imagine Democratic Socialism in a nation of tax cheats. Then there are those “little” bills that make civil society possible: water and electricity bills, promptly paid parking fines to avoid costly court proceedings, paying for public transportation and keeping up with property taxes. Further add not overburdening government with poor civic habits: “airmailing” garbage out the window, littering parks with empty beer bottles or otherwise forcing government to add unnecessary employees.       

Similarly essential is restraint at the public trough. Free quality medical care cannot survive a population that converts every injury into an ambulance ride to the emergency room. Similarly bad personal habits s can quickly bankrupt “free” medical care. Try sustaining socialized medicine where a population eats itself into obesity causing diabetes and heart attacks, slides into narcotics addition, practices dangerous sex, smokes and drinks to excesses and otherwise burdens the state with self-imposed tribulations? Better yet for keeping the goose healthy is for citizens themselves to shoulder burdens that would otherwise deplete state coffers, for example, volunteering to help senior citizens. 

Democratic Socialism is also closely linked to immigration policy though Bernie’s supporters almost never acknowledge it. Admitting millions of low-skilled immigrants will inevitably boost government welfare spending and, to repeat yet one more time, the already harassed goose may decide that enough is enough and fly to low-tax Ireland. In the final analysis, open porous borders and ample social welfare benefits are incompatible unless the government keeps printing increasingly worthless paper money. Ironically, the election of the anti-immigration Donald Trump may be more helpful in sustaining Democratic Socialism than his open borders rivals.         

Lurking underneath this explanation of why Democratic Socialization may only selectively flourish is the politically awkward issue of crime. Rampant criminality is incompatible with the prosperity vital to generous government-financed entitlements. Capitalist enterprises whose taxes pay the “freebies” bill will almost never remain in crime-ridden areas unless relocation is impossible (as in extractive industries such as mining) or are heavily subsidized to prevent mass unemployment. Few employees want to risk their lives when commuting or send their children to dangerous schools. It is no accident that crime-prone cities like East St. Louis, Missouri, or Selma, Alabama have little industry or commerce. Consider how much more money Washington could spend on our nation’s health care if the cost of fighting crime fell sharply? And the billions saved by hospitals not having to treat gunshot wounds or drug overdoses?  

All and all, though it is never publicly acknowledged, an ironic relationship exists between a successful Scandinavian social welfare system and pre-existing wealth and an orderly, peaceful citizenry. In a nutshell, it would be far easier to bring Democratic Socialism to an already prosperous San Francisco than financially struggling Detroit, though residents of the latter would benefit far more than the well-healed San Franciscans. The reason is simple: San Francisco is already wealthy and could easily make a few minor adjustments (e.g., limiting the poor population) that could finance Bernie’s socialist dream. Turning Detroit into Stockholm, by contrast would require hundreds of billions in new taxes, all on top of the hundreds of billions already spent there, and every nickel would come from beyond the city’s borders.   

Democratic Socialism is wonderful after the creation of massive wealth (Sweden was rich long before it instituted the social welfare state). By contrast, poor cities or nations will only exacerbate their poverty by trying to squeeze an already emaciated, sickly goose barely able to lay one or two golden eggs a month.

What Bernie and his followers are really demanding is a massive redistribution of wealth: robbing the wealth-generating Peters of San Francisco to bestow freebies on the unproductive Pauls of Detroit with no guarantee that Detroit would be the next Stockholm. It is hard to visualize a more Quixotic crusade. Lofty rhetoric aside, feeling the Bern is far closer to communist redistributive economics than some idyllic Scandinavian fantasy.

Thanks to Bernie Sanders, “Democratic Socialism”, by which he means a cornucopia of state-supplied benefits paid for by squeezing billionaires, is now all the rage. And according to Bernie and his fans, this vision is hardly Utopian -- generous womb-to-tomb entitlements work just fine in Scandinavia.

Predictably, the clamor for DS stresses the “free stuff” -- free education, including college, single-payer comprehensive medical care, universal state-funded daycare, subsidized housing, and countless other “free” or nearly free goodies.

Unfortunately, little is said about price tags and, even more importantly, total silence surrounds whether an arrangement that thrives in Norway can similarly flourish in the U.S. It is assumed that people and their values are world-wide interchangeable so if all Norwegians suddenly departed and Somali immigrants replaced them, Norway’s democratic socialism would scarcely miss a beat.

Absolute nonsense -- and if that were true, Democratic Socialism would be universal, even in dirt-poor sub-Saharan Africa.    

Begin by acknowledging the obvious -- successful Democratic Socialism requires mountains of tax revenue to finance all the handouts. Absent sufficient income, everything is empty rhetoric. Put colloquially, Democratic Socialism requires flocks of Golden Geese, all happy to lay ample golden eggs.

In practice, this means large numbers of profit-making, taxpaying businesses. Absent these, the economy is just a giant Ponzi scheme where government extracts money from one welfare recipient to bestow it on to another. This need for generating wealth is easily forgotten when fantasizing about all the forthcoming free stuff. Nor do fans of Democratic Socialism appreciate that an angry goose can hide its eggs from egg collectors or fly to friendlier climates if squeezed too hard.

Those feeling “the Bern” may not realize it, but Scandinavia is a hotbed of big-time capitalism. According to the Forbes 2000, a rating of the world’s largest companies, multi-billion dollar revenue firms include Stavanger (an oil and gas giant), Nordea (banking), A P Møller-Maersk (shipping), Volvo, SKF, Nokia and many, many more.

These big cash-generating firms, in turn, need thousands of skilled employees who dutifully show up, properly perform their jobs, and otherwise allow these private sector firms to earn the profits financing all the “free” stuff. Think of it this way: would Volvo stay in Sweden, let alone be able to pay the taxes if their workforce were a bunch of illiterates baffled by cutting edge robotic technology? Would any quality-conscience consumer own a Volvo if manufactured by incompetents?     

The citizen-related demands of successful Democratic Socialism further requires that people not torture the Golden Goose for more than it can produce. Tradeoffs are always necessary so generosity in one area requires frugality elsewhere.

Consider financing a “free” a university education. Yes, higher education in Scandinavia is generously government subsidized but this is financially feasible since overall educational costs elsewhere are kept under control. Envisage Swedish bureaucrats trying to fund low-tuition universities when millions and millions of krona must be allocated to disastrous K-12 schools with their armies of school police and electronic security, additional staff to manage out-of-control disruptive students, specialists in remedial education to teach basics a second or third time, scores of experts to develop new ways to uplift chronic strugglers, millions for school repair that results from vandalism and similar money-consuming obligations.

Democratic Socialism also only flourishes where people gladly pay for their government services. It's hard to imagine Democratic Socialism in a nation of tax cheats. Then there are those “little” bills that make civil society possible: water and electricity bills, promptly paid parking fines to avoid costly court proceedings, paying for public transportation and keeping up with property taxes. Further add not overburdening government with poor civic habits: “airmailing” garbage out the window, littering parks with empty beer bottles or otherwise forcing government to add unnecessary employees.       

Similarly essential is restraint at the public trough. Free quality medical care cannot survive a population that converts every injury into an ambulance ride to the emergency room. Similarly bad personal habits s can quickly bankrupt “free” medical care. Try sustaining socialized medicine where a population eats itself into obesity causing diabetes and heart attacks, slides into narcotics addition, practices dangerous sex, smokes and drinks to excesses and otherwise burdens the state with self-imposed tribulations? Better yet for keeping the goose healthy is for citizens themselves to shoulder burdens that would otherwise deplete state coffers, for example, volunteering to help senior citizens. 

Democratic Socialism is also closely linked to immigration policy though Bernie’s supporters almost never acknowledge it. Admitting millions of low-skilled immigrants will inevitably boost government welfare spending and, to repeat yet one more time, the already harassed goose may decide that enough is enough and fly to low-tax Ireland. In the final analysis, open porous borders and ample social welfare benefits are incompatible unless the government keeps printing increasingly worthless paper money. Ironically, the election of the anti-immigration Donald Trump may be more helpful in sustaining Democratic Socialism than his open borders rivals.         

Lurking underneath this explanation of why Democratic Socialization may only selectively flourish is the politically awkward issue of crime. Rampant criminality is incompatible with the prosperity vital to generous government-financed entitlements. Capitalist enterprises whose taxes pay the “freebies” bill will almost never remain in crime-ridden areas unless relocation is impossible (as in extractive industries such as mining) or are heavily subsidized to prevent mass unemployment. Few employees want to risk their lives when commuting or send their children to dangerous schools. It is no accident that crime-prone cities like East St. Louis, Missouri, or Selma, Alabama have little industry or commerce. Consider how much more money Washington could spend on our nation’s health care if the cost of fighting crime fell sharply? And the billions saved by hospitals not having to treat gunshot wounds or drug overdoses?  

All and all, though it is never publicly acknowledged, an ironic relationship exists between a successful Scandinavian social welfare system and pre-existing wealth and an orderly, peaceful citizenry. In a nutshell, it would be far easier to bring Democratic Socialism to an already prosperous San Francisco than financially struggling Detroit, though residents of the latter would benefit far more than the well-healed San Franciscans. The reason is simple: San Francisco is already wealthy and could easily make a few minor adjustments (e.g., limiting the poor population) that could finance Bernie’s socialist dream. Turning Detroit into Stockholm, by contrast would require hundreds of billions in new taxes, all on top of the hundreds of billions already spent there, and every nickel would come from beyond the city’s borders.   

Democratic Socialism is wonderful after the creation of massive wealth (Sweden was rich long before it instituted the social welfare state). By contrast, poor cities or nations will only exacerbate their poverty by trying to squeeze an already emaciated, sickly goose barely able to lay one or two golden eggs a month.

What Bernie and his followers are really demanding is a massive redistribution of wealth: robbing the wealth-generating Peters of San Francisco to bestow freebies on the unproductive Pauls of Detroit with no guarantee that Detroit would be the next Stockholm. It is hard to visualize a more Quixotic crusade. Lofty rhetoric aside, feeling the Bern is far closer to communist redistributive economics than some idyllic Scandinavian fantasy.