Conventional Wisdom: Bernie Sanders, the Keynesian Candidate

Bernie Sanders’s revolution may have ended, at least for this election cycle, on Monday night when he endorsed Hillary Clinton from the stage at the Democratic National Convention. But that doesn’t mean it failed entirely. Barely a blip on the national radar just a year ago, Sanders not only gave Clinton a run for her life, he did so as an unapologetic Democratic Socialist, breathing new life into the American Left and providing a critique of capitalism that goes far beyond that of even the most progressive congressional Democrats.

To get a sense of Sanders’s accomplishment and its implications for the political party whose heart he won, if not its nomination, it’s important to identify what he doesn’t support.  “I don’t believe government should own the means of production,” Sanders said in a speech he delivered last fall, in an attempt to define Democratic Socialism. That position distinguishes Sanders from garden-variety socialists, to say nothing of adherents of communism. While Sanders has no problem with the government taxing or regulating Microsoft, unlike those other groups, he doesn’t believe, either as a moral or practical matter, it should own the company outright.

What he does favor is reminiscent of John Maynard Keynes’s vision of the responsibilities of government (and the implications, therein, for capitalism). In “The End of Laissez Faire,” an essay that was adapted from a series of lectures he gave in 1926, Keynes suggested that “progress lies in the growth and the recognition of semi-autonomous bodies within the State.”  These “bodies” were distinguished by the fact that their “criterion of action … is solely the public good as they understand it,” and they included institutions such as banks and universities in addition to those services we would traditionally bracket under public utilities.

Keynes granted the possibility that the work of these “semi-autonomous bodies” might be better accomplished via private enterprises subject to market forces, and in determining whether this was so in particular cases, he believed that economists played an essential role.  “[T]he chief task of economists at this hour is to distinguish afresh the Agenda of government from the Non-Agenda,” he said, “and the companion task of politics is to devise forms of government within a democracy which shall be capable of accomplishing the Agenda.” In other words, while democratic decision-making ultimately determines what properly falls within the ambit of the public good, with respect to any of its constituent parts, it falls to economists to help determine whether the invisible hand better ministers to a particular end or whether the effort should be a public undertaking.

To the degree that Sanders eschews socialism outright but still endorses extensive government intervention in the economy, he seems to take a similar approach. His efforts to break up the major investment banks and regulate them consistent with a public utility as well as his call to make all public universities tuition-free reflect his belief that the “criterion of action” of such institutions is more consistent with public aims, rather than private enrichment, and he further believes that their mission is best accomplished by largely insulating them from market forces.  In this respect, what distinguishes Sanders is the scope of what he would define as the “public good”—a definition that goes well beyond that of conventional Democrats—in addition to the fact that he seems doubtful that much of the proper “Agenda” of government may be achieved with the help of private enterprise.

The latter prejudice should be far more disconcerting to free-market enthusiasts than the former.  It is one thing to say that government should play a central role in defining the public good; it’s another thing altogether to say that the public good, however it is defined, is rarely achieved by private efforts. Sanders seems to incline toward the second view. Only time will tell if the Democratic Party follows.