Sen. Bernie Sanders, I-Vt., does not shy away from his socialist roots. Still, I’m sure his campaign is not pleased with the release of newly digitized newspapers and files from his tenure as a leading member of the Liberty Union Party in the 1970s.
The Liberty Union is a self-proclaimed “radical political party” that advocated introducing Soviet-style socialism (aka communism) to the United States. While leading the group, Bernie Sanders called for nationalizing the energy industry, banks, phone, electric, and drug companies. He argued that government should control the means of production for all major industries and should impose a 100 percent income tax on the highest income earners.
When Sanders left the group, it wasn’t to walk back his extreme socialist views. It was because he believed the party was not working hard enough to fundamentally transform the country (again, that country was the United States, not the Soviet Union). Not surprisingly, the socialist group was apparently content doing the bare minimum.
If Sanders got his way in the 1970s, we would be living in a very different country. Free markets are competitive by nature and allow businesses to innovate, pushing society forward to progress and prosperity. A state-run economy would have smothered the market for goods and services and eliminated the breeding ground for free exchange of ideas.
Nationalized economies are a giant game of Simon Says or, in this case, Stalin Says. Everyone is afraid to move. In addition, the odds are stacked against nationalized economies. Entrepreneurs and businesses fail all the time in a free market, but new ones pop up to take their place. Nationalized systems go all in on government management, which is usually a bad bet. Even worse, those who disagreed with the takeover would become an enemy of the state.
Nationalizing banks would turn investing into a political process that benefits Washington at the expense of everybody else. If you think the government is bad with money now, imagine unaccountable bureaucrats tasked with micromanaging bank holdings. Financial fiascos like Solyndra would become the norm.
We’ve already seen this in practice. When Venezuela nationalized its financial institutions, banks closed, and dissenting employees were jailed. Residents of the former Eastern bloc are still reluctant to put money in bank accounts, fearing their life savings will disappear.
Nationalizing the energy sector would have decreased energy production due to miles of red-tape regulations and a lack of innovation, leading to higher energy prices, and an increased cost of living for everyone.
When Mexico and Venezuela nationalized their energy industries, environmental concerns were often ignored. Bureaucratic negligence and outdated technology in the Soviet Union contributed to the Chernobyl nuclear disaster.
More recently, Germany mandated renewable energy despite the country’s inability to meet energy demand using only wind and solar. As a result, states were forced to utilize high carbon-emitting brown coal. These are the unintended consequences of creating and enforcing policies for the world you wished you lived in, rather than reality.
Under nationalization, there would have been no shale boom — key to lowering the United States’ greenhouse gas emissions. We would be experiencing more blackouts and electrical shortages when supply cannot keep up with demand.
Sanders’ nationalization initiative would empower government-backed monopolies in the telecom and air travel industries, leaving consumers with no viable alternatives. Before 1978, the Civil Aeronautics Board controlled who could fly and where. The industry existed only for the benefit of those wealthy enough to afford the high cost of air travel.
Nationalization of the airline industry would have continued the CAB’s status as regulatory czar. The middle class would not be able to afford air travel, and the world would have become far less interconnected.
Similarly, the breakup of “Ma Bell’s” government-backed monopoly on telecom in 1983 jump-started Internet innovation. Had the U.S. nationalized telecom, cellphones and the Internet as we know it today would almost certainly not exist.
Private companies like Google, Apple, and Amazon wouldn’t exist — can you imagine a federal agency providing similar services? Good luck getting bureaucrats to compete and innovate the way Silicon Valley startups do.
Nationalizing private industry can have life-or-death consequences. Government-run healthcare providers would have higher wait times for specialized care and reduced investment for the medical breakthroughs that have saved millions of lives throughout the past 50 years.
Socialism fails because it removes the market signals that allow for free societies and economic prosperity. Governments don’t operate under the same incentives and accountability standards as private industry. A big government monopoly can fail a thousand times over, and there is nothing you can do about it, because at the end of the day, they have an army, and you don’t.
Socialists like Bernie Sanders claim to advocate for workers. But if that were true, they would create policies that return power to individual workers, not redistribute what little autonomy they have left to government.