The Difference Between Sanders and Warren, or Can Regulated Capitalism Save the Country?

Gallup Poll from earlier this year

by Gaius Publius

I'm writing this as a heads up, since the issue will come up forcefully in not too many months. Elizabeth Warren and Bernie Sanders are not equivalents for each other, and it's not even close. Though both would make the next administration, if either were elected, a progressive one by many definitions, the nature of the progressivism under each would be quite different.

(I suspect they'll also have different foreign policies, and other, major policy differences will likely emerge as well. But let's deal only with what's already on the table, already known and before us.)

David Dayen, writing at the New Republic, made the point quite well, so I'm going to quote him at a little length. But first, let's bottom line this:

Bernie Sanders is a socialist. Elizabeth Warren is a capitalist. Both want the economy to work on behalf of the people, but their methods of getting there, on quite a few issues, could not be more different.

In addition to the cage match that may or may not develop between two strong-minded politicians — a match in which personalities, and voters' preference about personalities, could play a huge part — there will also emerge a fundamental conflict of ideas as well.

Can the current capitalist system be reformed and retained, or must it be partly nationalized — taken over by government — and reduced in size and capacity, for the country to be saved from its current economic enslavement to the "billionaire class"? In addition to questions of personal preference, Democratic primary voters will be asked to decide this question as well.

And the question applies quite broadly. The billionaire class also controls our response to climate change. Is it possible for a "free" market system — a system in which billionaires and their corporations have control — to transform the energy economy enough to mitigate the coming disaster, or must government wrest control of the energy economy in order to have even a hope of reducing the certain damage?

Heavy questions, and consequential for generations to come. Here's how Dayen frames it:

The Essential Difference Between Bernie Sanders and Elizabeth Warren
The potential 2020 candidates are often portrayed as identical progressives. A closer look proves otherwise.

Senator Bernie Sanders wants to be president—he made that much clear with his energized campaign in 2016. Senator Elizabeth Warren does, too, as several recent moves show. They both have widespread name recognition and share similar political philosophies. Is there room enough in a Democratic primary for the two of them? ...

Warren and Sanders recognize that they share the same lane in a presidential race: They’re both populists dedicated to fighting economic inequality. Splitting the vote and missing the opportunity to elevate that signature issue in presidential politics would be a worse fate than any extinguished personal ambition.

But Warren and Sanders are hardly identical progressives. They have markedly different approaches to empowering the working class. In the simplest possible terms, Warren wants to organize markets to benefit workers and consumers, while Sanders wants to overhaul those markets, taking the private sector out of it. This divide—and where Warren or Sanders’s putative rivals position themselves on it—will determine the future of the Democratic Party for the next decade or more. [emphasis added]

I think the last statement is accurate, with one proviso. If the Democratic Party's current corrupt leadership keeps control through 2020, all bets are off. The future of the Democratic Party will then be its past, a past of charismatic Obamas and Clintons, and the real resistance — the fight against rule by the rich — will seek in vain again from faithless Republicans what it can only conclude will never ever be available from Democrats.

But that proviso aside, let's look at the policy detail that marks this Warren/Sanders divide. First, about Warren, who wants to change the rules of the big money poker game so that smaller players (us) are not so disadvantaged:

Warren’s suite of policies, rolled out in recent months, all try to reform rules that empower the wealthy at the expense of regular Americans. Her Accountable Capitalism Act would ensure worker representation on corporate boards, and require large corporations to consider all its stakeholders—not just investors but workers, consumers, and communities of interest—in any decision-making. Her climate bill would force public companies to disclose climate-related risks, giving investors more information to use their money toward sustainable goals.

Her housing bill would transfer money for affordable housing to communities that adopt zoning policies to make it easier to build. Her 21st Century Glass-Steagall Act seeks structural separation of commercial and investment banks to keep companies making the riskiest trades away from taxpayer-funded bailouts. And the Anti-Corruption and Public Integrity Act would buttress these gains by reducing the role of special interest lobbying in federal policymaking.

Sanders, on the other hand, doesn't want to write new rules for the poker game; he wants to break it up:

Sanders, while concerned with making markets fairer, would rather just rip them up, either through limiting how much companies can grow or instituting publicly funded options alongside them. He would put a hard cap on the size of financial institutions to make them more manageable. He would make public colleges and universities tuition-free, rather than expanding access for certain needy students. He would create a federal jobs guarantee through 2,500 American Job Centers nationwide, and he estimates that his $1 trillion infrastructure investment would support 13 million publicly funded jobs as well. And in health care, he would simply nationalize the insurance sector, putting everyone on a Medicare-style plan.

Take just his Job Guarantee program. Under the Stephanie Kelton / Levy Institute proposal (pdf), which the Sanders Institute endorses, the federal government wouldn't just offer a job to anyone who wants one. It would deliberately compete with the private sector in order to put a floor under wages and working conditions.

Here's how Kelton explained the proposal to me in 2014:

If [FDR-style jobs programs] were created the right way, and you said, “Anybody who’s ready, willing and able to work, or unable to find a job in the private sector — or if you just don’t like that job — you can come and take this [government] job. We’re going to create one for you at a living wage with these benefits …”

You create a package for the worker that then becomes the minimum, [which] everyone else has to provide … or they’re not going to get workers. That becomes the de facto minimum. … We’re not going to let you starve in America.

"We're not going to let you starve in America" — unlike Walmart and Amazon, I hasten to add. That's a nice carrot. But notice that the stick, the implementation, is deliberately anti-neoliberal. Here's how I said her proposal back to her in the same conversation, just to make sure I heard it right (6:55 in the clip):

I don’t want this to go by without people getting what was said. … You’re saying that you don’t really need to define a minimum wage, because the government sets a floor. … [Then] anybody who wants a better job than the junk job they’ve got can work for the government. That forces the private employers to compete with the government for workers, and that’s a good thing for workers. Is that what you're saying?

Her answer: "It is what I'm saying."

Of course, there's quite a bit of overlap between Sanders' proposals and Warren's, which Dayen also explains, and also much fuzziness around the simplified labels "capitalist solution" and "socialist solution." Still, the areas of non-overlap are quite clearly marked.

Will voters respond to Warren's charisma on the stump and ultimately decide that market tweaks are a more, well, American solution than Sanders' market-busting proposals? The 2020 election, if each or either emerges as a frontrunner, will provide the answer. And if either is elected, the four years that follow will show if the chosen answer actually works.

GP