The Lesson Of The Sanders Campaign: Liberalism Isn't Becoming Socialism (Maybe Vice Versa???)

With the conclusion of the presidential primary season and self-described Socialist Bernie Sanders' surprisingly successful campaign, it is time to ask: Is liberalism becoming socialism?

U.S. conservatives have already answered the question: Yes!

While this had been an occasional right-wing talking point since the New Deal, it was never commonplace before President Obama. But, since 2009, one almost can't listen to right-wing radio without hearing Obama called a Marxist. (Boy, Marxism sure is good for the stock market.)

With Sanders' exceeding expectations, the Socialist label was broadened to the entire Democratic Party and appeared in more mainstream venues.

On Fox News, conservative radio host and former Republican presidential candidate Herman Cain couldn't help but smile big -- really big -- when he declared that the Democratic primary race is between Socialists. Jason Riley called liberalism and socialism "a distinction without a difference" in The Wall Street Journal. Even Chris Mathews of MSNBC felt compelled to ask Democratic National Committee Chair Debbie Wasserman Schultz the difference between a Democrat and a Socialist.

Underlying the trend: every Democratic economic proposal is now labeled by critics as "socialism". Free or reduced college tuition? Socialism! Higher minimum wage? Socialism! Incentives for executives to provide shares of corporate stock to their employees? Capitalism? Nope: Socialism!

But socialism has a very precise definition: "government ownership of the means of production". Socialism, including Bernie Sanders' preferred terminology, "democratic socialism", means government, not investors, owns the economy -- or at least, the key actors in the marketplace.

But this wasn't the definition that Senator Sanders ran on.

When Socialists took power in Great Britain and France after World War II, they nationalized an auto company, an aircraft company, mines, and more.

You don't hear Sanders calling for Ford or Boeing to be nationalized.

In fact, Sanders has been explicit: "I don't believe government should take over the grocery store down the street or own the means of production."

OK, he has proposed nationalizing one industry: health insurance.

That isn't socialism either

Conservatives believe the marketplace is "perfect" -- that is, optimal and self-correcting. Socialists believe the government is "perfect" -- that is, optimal and self-correcting.

Only liberals believe that the government and the marketplace are essential and imperfect. Since neither is completely "self-correcting", each is needed to mitigate the flaws of the other.

There are many examples of marketplace imperfection. "Risk" is one example. Perhaps a minor flaw for wealthy investors who use risk to earn a return or who are not greatly harmed if the companies they invest in go bankrupt and they lose their investment.

But for the employees who work for those companies? Many, through little or no fault of their own, are at unbearable risk of failure and could find themselves on the streets. How long will it take them to find jobs? And will those jobs compare to the jobs they lost?

The marketplace manages risk through insurance -- but nowhere close to optimally. Our government recognizes that large numbers of people will either not have the money to purchase unemployment insurance as necessary or make the wrong decision as to whether they need it. Thus, government provides this insurance.

And it's hardly limited to unemployment. Federal and state governments universalize a variety of social insurance to correct this one marketplace flaw: workman's compensation, disability, Social Security -- even insurance for our bank deposits.

Note that Sanders isn't proposing nationalizing the health care industry, as Britain has done. Only health insurance! He doesn't want to replace the marketplace. He just wants to protect everyone from this inherent feature of the marketplace.

That isn't socialism. It's liberalism.

But Senator Sanders and conservatives aren't the only ones conflating these two terms. Countries that once did nationalize major industries are headed in the opposite direction, while retaining their "socialist" images.

And it's not just the Communist extremes like China moving rapidly toward a capitalist marketplace. Nor Cuba, where they are discussing worker cooperatives as an alternative to government ownership.

No, we can look to "democratic socialist" Europe: In Sweden, government dominated the economy -- public spending topping out at 70.5 percent of the GDP. Today, it has dropped to about 50 percent. And the same trend is true in country after country. No Western European country has a public sector that is even 60 percent of its economy today -- and most dropped the percentage of public spending by about 20 percent -- prior to the recession of 2008 and the small increase in counter-cyclical government spending that resulted from it.

European countries are even privatizing some of the companies they had nationalized.

So, is liberalism becoming socialism as conservatives assert? Hardly. The lesson of the Sanders campaign, as well as economic trends worldwide, is that socialism is becoming liberalism.

Perhaps redefining socialism is a worthy endeavor. Given that the upper 1 percent is taking nearly all of recent productivity gains while the working class is falling out of the middle class, one could envision a form of "socialism" that goes beyond "safety-net" liberalism, retaining a large private sector but assuring that assets and income are spread more broadly. Greater worker ownership of the workplace, annual income modeled after the Alaska Permanent Fund's distribution of royalties from public assets, and Universal Trust Funds could all be elements of this New Socialism.

But Donald Trump made more of an effort in the past year to redefine conservatism than Sanders did to redefine socialism. So, forget the polls that show him defeating Donald Trump. The Republicans would have used the term to beat him decisively.

So here's the other lesson of the Sanders campaign: If you're running for president, don't use the term socialism if you don't intend to redefine it.

Unless you just want Herman Cain to buy you dinner.