John Locke Update / Research Brief

Sanders and Ocasio-Cortez are Not Socialists, So What are They?

posted on in Fiscal Insight, Spending & Taxes
Featured Image

Neither Bernie Sanders nor the congressional nominee from New York, Alexandria Ocasio-Cortez, show any evidence that they are actually socialists, despite describing themselves as such.

The Merriam-Webster Dictionary gets the traditional definition exactly correct when it defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.” That is, if someone is going to call themselves a socialist, then, at minimum, they need to advocate for government ownership of the means of production, i.e., industry. And they are only a socialist to the extent that they do this. Historically, the foundation of every socialist economy has been the nationalization of key industries.

This was, of course, the case for dictatorial regimes in Cuba, Russia, Venezuela, North Korea, etc., but it also happened after WWII when the socialists took control in Great Britain. The first thing they did was to nationalize major industries, including iron, steel, coal, and health care.

So, when will Bernie or Alexandria declare their intention to nationalize General Motors, Apple, or ExxonMobil? In fact, they are not even calling for the nationalization of industries that they openly repudiate, such as coal or banking. One might argue that they are advocating real socialism in health care with the overt push for a single-payer system, politically advertised as “Medicare for all.” But, in fact, neither Medicare nor other single-payer programs like Medicaid are socialized medicine. No one is advocating for the actual government takeover of hospitals or making doctors government employees, as they did in Britain. This would be socialized medicine and the model for such a program, at least in the United States, would be the Veterans Health Administration (VA) system, not Medicare. If the Sanders/Ocasio-Cortez wing of the Democratic Party really wanted socialized medicine, their cry would be “VA for all” not Medicare for all.

If the socialist wing of the Democratic Party are not socialists, what are they? First and foremost, they are unshackled welfare statists, directed by a morality that values, above all, a form of outcome-based egalitarianism. As a result, they favor all-encompassing government programs that they believe will minimize income inequality and the outcomes that flow from such inequalities. As we have seen, this includes a steeply progressive income tax system, government control of payments for health care services, tuition-free higher education, guaranteed employment, etc. Note that none of their proposed programs seeks to nationalize these industries. What they do seek to do is equalize the benefits that these industries provide through one or another kind of government payment scheme.

In the area of economic policy these self-proclaimed socialists embrace, not socialism, but what is called “dirigisme”, which the Merriam-Webster dictionary simply defines as a system that embraces “economic planning and control by the state” and the Collins English Dictionary describes as “control by the state of economic and social matters.”

But both Wikipedia and the Encyclopedia Britannica have more refined definitions that I think captures the essence of what is advocated by Sanders, et. al. Wikipedia states:

Dirigisme or dirigism (from French diriger, meaning ‘to direct’) is an economic system where the state exerts a strong directive influence over investment. It designates a capitalist economy in which the state plays a strong directive role, as opposed to a merely regulatory one.

According to The Encyclopedia Britannica:

dirigiste [adjective form] policies often include centralized economic planning, directing investment, controlling wages and prices, and supervising labour markets.

Dirigisme is considered to have been “an inherent aspect” of the fascist economies of post-WWI Italy, Spain, and Germany, which have been described as being “based on private individuals being allowed property and private initiative, but these were contingent upon service to the state.”

While the ideological goals of Bernie Sanders and his followers are quite different from those that were held by Mussolini in Italy or Franco in Spain, dirigisme offers an ideologically neutral economic system that allows for those in power to advance whatever goals they happen to have. What needs to be emphasized is that dirigisme is neither socialism nor capitalism. It is a system where industry is privately held but governmentally directed to advance the interests and goals of the state, regardless of what those goals might be.

While not using the term dirigisme, a 2016 article in The Atlantic titled “Sanders is Not a Socialist and America isn’t Capitalist” recognized much of this. In it, author Marian Tupy states, “Sanders is not a typical socialist. Sure, he believes in a highly regulated and heavily taxed private enterprise, but he does not seem to want the state to own banks and make cars.” He describes Sanders as being in favor of what the author calls a “social democracy,” which fits squarely within the broader concept of dirigisme discussed here. According to Tupy,

In a social democracy, individuals and corporations continue to own the capital and the means of production. Much of the wealth, in other words, is produced privately. That said, taxation, government spending, and regulation of the private sector are much heavier under social democracy than would be the case under pure capitalism.

I think it is unlikely that the rather arcane term “dirigisme” will catch on anytime soon as a description for the set of policies being offered by the so-called socialist wing of the Democratic Party. But it is important to understand that those policies are not, in fact, socialist but represent an approach to economic policy that has been adopted, historically, by both far-left progressives and far-right fascists, albeit with different goals in mind. On the other hand, neither can these policies be defined as capitalist, despite the fact that they maintain the institutional infrastructure of private property.

When it comes to private property, dirigisme separates control of property from its legal title. While legal title to the means of production may remain in private hands, use of that property, particularly when it comes to what and how goods and services are produced, distributed, and paid for, is directed by the state to advance the goals of the state. Upon close examination, this, not the outright ownership of the means of production by the state, is the proposed world of Bernie Sanders, Alexandria Ocasio-Cortez, and nearly all who describe themselves as progressives, whether or not they also describe themselves as a socialist.

Roy Cordato is Senior Economist and Resident Scholar at the John Locke Foundation. From January 2001 to March 2017, he held the position of Vice President for Research at the Locke Foundation. He also holds the title of Lecturer at… ...

Donate Today

About John Locke Foundation

We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

The John Locke Foundation is a 501(c)(3) research institute and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations.