Senator Bernie Sanders, the independent member from Vermont, looks likely to be the Democratic Party’s nominee to take on Donald Trump in the upcoming 2020 United States (US) presidential election. A self-identified democratic socialist, Sanders has many Democratic operatives and media pundits warning of the allegedly inevitable Trump victory come November 3rd. The same people who reassured us that Trump’s election was impossible now claim Bernie Sanders is unelectable. Forgive me for not being entirely convinced. In truth, the electability case against Sanders is a proxy argument for criticising his economic agenda.
Priests of the economic orthodoxy frequently remind CNN and Fox News viewers that higher taxes and greater government intervention will stifle growth, increase inflation, and reduce private sector innovation. Some even try to conflate Sanders’ Scandinavian style democratic socialism with Latin American socialist authoritarianism. Yet, there’s simply no evidence for any of these fear-mongering claims. On the contrary, Sanders’ domestic political agenda would greatly strengthen America’s economy and increase its power and legitimacy on the world stage. Australians should be buoyant about the prospects of a Bernie Sanders administration.
Immigration concerns won Trump the Republican nomination and eventually the presidency. Economic inequality could do the same for Bernie Sanders. At every debate and campaign rally, Sanders reminds viewers that three American families own more wealth than the bottom half of American society. Not only is this immoral, it’s bad economics (and it’s not just democratic socialists who think so). The International Monetary Fund (IMF) believes that income inequality harms economic growth. Research observes an inverse relationship between income accruing to the top 20 percent and economic growth. All of this is contrary to the mainstream claim that lower taxes increase overall prosperity by growing the economy.
Even when growth occurs in an unequal economy, it is highly unsustainable. Low wage growth suppresses the purchasing power of the working and middle classes, reducing demand for goods and services. Interest rates are cut in order to stimulate demand, leading to high levels of household debt from borrowing. In the event of a downturn, the underlying weakness in the economy is exposed, causing longer and more severe recessions. The only way to deleverage households and create sustainable growth is through income redistribution. Sanders’ proposal for a $15 per hour federal minimum wage and universal healthcare isn’t just a moral indictment on the current American system; it’s sensible economic policy.
Inequality is not the only issue facing the economy: productivity (output per worker) is lagging. Historically, labour force productivity is a key driver of wages growth. American productivity is low relative to other developed countries, contributing to stagnating wages and sluggish economic growth. Infrastructure spending is a universally recognised way to boost productivity. That’s why Sanders has pledged massive amounts of money to rebuild America’s physical infrastructure and ensure every household has access to high-speed broadband internet. Investing in public education and removing access barriers to tertiary education is another core plank of Sanders’ platform. This too is necessary if America is to remain competitive internationally. American students are falling behind their peers across other developed countries, especially in maths and science.
Bernie Sanders’ agenda takes America’s long-term strategic and economic goals extremely seriously. If America continues on its current path, it will be a country in which thousands die each year from lack of healthcare, where billionaires buy elections, and where the military remains engaged in forever wars on the battlegrounds of yesteryear. That is not a country that can uphold the legitimacy of democracy and compete with an aggressive and authoritarian China. A Sanders presidency is the West’s best hope.
Since the “Great Divergence,” technology has broken the nexus between population and economic power. This is how small European countries have been able to outpace states ten times their size. American productivity, driven by technological advancement and the best higher education system in the world, is what enabled the US to emerge as the world’s economic engine after World War II. China is now stealing that mantle. Once again, it appears that population size will determine economic power. However, China is, in many ways, a “low productivity superpower.” America can preserve its position as the world’s biggest economy if it invests in its citizens, not just its corporations.
It is virtually inevitable that China will someday overtake the US as the world’s largest economy. Whether or not this spells the death of the liberal international order is a separate question. Collectively, North America and the European Union (EU) are the worlds largest economic bloc. Under renewed American leadership, the West can prevent the rise of authoritarian powers from threatening democracy globally.
Leadership rests on power, and power rests upon legitimacy. Currently, American global leadership is experiencing a legitimacy deficit. Invocations of the “rules-based order” are hollow given that the US flagrantly violated all rules when it invaded Iraq in 2003. Citizens of Pakistan might wonder why the rules apparently don’t apply over their skies, as extrajudicial drone strikes murder innocent civilians. This is not a false equivalency. Few countries would wield their global power better than the United States. Then again, no other country professes its claim to global leadership.
If Americans do not want the Chinese model of state-sponsored capitalism and repressive authoritarian politics spreading overseas (the so-called “Beijing consensus”), then they need to make the alternative more attractive. Given the differences in population sizes, it is noteworthy that the US imprisons more people than China, in total. When the Global Financial Crisis (GFC) threatened Chinese growth, the government invested in high-speed rail. When the GFC struck America, it bailed out the banks. Years after the crash, many Americans remain unemployed. Developing countries can’t be blamed if they stop listening to advisors from Washington.
Foreign policy begins at home. As such, America’s role in the coming century will depend upon its situation at home. Political gridlock and polarisation affect those who can afford them least: struggling working-class families. If they give up on the American dream, then so will the rest of the world. Only Bernie Sanders can restore America’s place in the world.