Bernie Sanders finally embraces socialism
His corporate accountability plan would be a game changer for millions of Americans
From the beginning of his rise to national prominence, Bernie Sanders has faced criticism and confusion over his insistence that he is a democratic socialist. "It has long struck me as puzzling that Bernie Sanders refers to his ideology — which I would characterize as social democracy or even just welfare state liberalism — as democratic socialism," wrote Vox's Matt Yglesias in 2016.
Monday, with the release of his "Corporate Accountability and Democracy" plan, which would radically enhance workers' influence over their employers, Sanders has proved that this label is not just a holdover from the 1980s — and the vital importance of socialist policy for repairing what is broken in American society.
Sanders' plan has many moving parts, and resembles Elizabeth Warren's plan for corporations in some ways. Like her he would mandate co-determination for large corporations — reserving 45 percent of the seats on corporate boards for worker representatives — and require the adoption of a "stakeholder charter" requiring them to consider a wide variety of interests instead of just shareholder returns. He would jack the corporate tax rate back up to 35 percent, and revitalize the moribund antitrust enforcement at the Federal Trade Commission. (Incidentally, as Sandeep Vaheesen points out at The American Prospect, this last part could be done without needing to get anything through Congress.)
However, Sanders is considerably more aggressive than Warren where it counts (as has been a consistent theme in the campaign). He would require all large firms to disperse 2 percent of their stock annually into a Democratic Employee Ownership Fund, until at least 20 percent of shares are owned by the workers. These shares would receive normal dividends and voting rights, but could not be transferred or sold. The campaign reckons this would be an enormous change — affecting 56 million workers, and giving them an annual dividend that would average as much as $5,000. Sanders would also establish a $500 million fund to help workers buy up their own companies, grant workers first rights to buy a company if it goes up for sale or bankrupt, or if a factory is being outsourced (along with several other smaller items).
Like all political traditions, socialism has a variety of definitions, and leftists can be incredibly sectarian about obscure ideological points. But Sanders' proposal is unquestionably directly in the middle of the socialist tradition. The signature idea of Karl Marx, for example, is worker control of factories. In Capital he famously imagined "an association of free men, working with the means of production held in common," as opposed to a system where one person owns the factory and wrings profit out of the workers who operate it.
But this program also fits with more capacious definitions of socialism, like that of Karl Polanyi, who argued that socialism was simply the tendency "to transcend the self-regulating market by consciously subordinating it to a democratic society" — essentially making the economy serve the needs of the people instead of the other way around. A corporation is a legal construct of the state, and changing its governing laws so that it better serves social needs is entirely in keeping with this line of reasoning.
It's also worth noting that employee ownership funds poll quite well. As John Duda at Democracy Collaborative writes, more than half of people support the idea of employee ownership funds while fewer than a quarter of people oppose them — whether it is 10 percent of a company's equity or 50 percent. And it's not hard to imagine why! Allowing workers a cut of the profits they helped produce is intuitively fair, and requires nothing in the way of new taxes. The only losers are the tiny handful of wealthy people who own most stocks.
There are a number of reasonable objections to Sanders' proposal. Firms have varying levels of profit relative to their workforce — some capital-intensive ones (like real estate management firms) would have massive payments to their workers under this scheme, while others (like Walmart) would have only small ones. People who are not workers wouldn't get anything directly. (These could be countered by creating one big wealth fund, and granting dividends to every citizen.)
But this is still one of the best ideas to come out of the 2020 campaign. Matt Bruenig calculates it would eventually take up $7.1 trillion in corporate equity. That would make a big dent in income and especially wealth inequality, which, as an unavoidable side effect of capitalism, has plagued the United States since its founding, even during the halcyon post-war days of high unionization and rising wages.
That inequality has gotten much worse since the mid-1970s, and is a major engine behind the various social catastrophes plaguing the United States. Corporations have abandoned all social responsibilities, austerity has eroded an already-threadbare welfare state, and the multiplying riches of the top 1 percent have led them to squirrel their wealth overseas and retreat to walled fortresses. Meanwhile, suicide, violence, and overdose stalk the communities that have been left behind. Even quite comfortable people are gripped by anxiety that they or their children might fall down the class ladder, given how precarious American working-class life can be.
America desperately needs some aggressive action to cut the masses back in on the fruits of economic production. Bernie Sanders' democratic socialist vision is a great place to get started.
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