The New Road to Serfdom

Senators Sanders and Warren are battling for the heart and soul of the progressive wing of the democrat party by making outlandish promises.  Neither claims to be a socialist, Sanders says he’s a democratic socialist whatever that is, but their proposals and philosophy certainly have the trappings of Socialism.  Their basic philosophy is to promise programs that guarantee individual security and deliver on those promises by increasing government authority over all aspects of life and the economy.

Senator Sanders has just introduced his Green New Deal with a price tag of $16 trillion over 10 years.  This is on top of Medicare for All, free tuition, family leave, and expanded social security.  Depending on whose analysis is used, the cost of these promises has to exceed $4 trillion annually.  The Federal Government’s budget for this fiscal year is only $4.4 trillion.

The appeal of these proposals is mystifying because taxes on everyone would have to significantly increase. The Sander’s tax plan would raise $15.3 trillion over the next decade, according to the Urban-Brookings Tax Policy Center (TPC).  Even if you believe these calculations, which should be taken with a lot of grains of salt, the net result is a growing national debt and more taxes for everyone. According to the Tax Foundation, the average tax rate for the top 50%in 2018 was 15.6%–the bottom 40% pay no federal taxes. To raise an additional $4 billion, tax rates would have to double.

Many of the Sanders Warren supporters may not be aware of Friedrich Hayek’s 1939 book the Road to Serfdom which he wrote as a warning to the “socialist intelligentsia of England.  Before casting their votes in either primaries or the general election, progressive democrats should read Hayek’s book  because it explains the reality of the socialist promise.  The history of past attempts at national economic planning is sobering.  Germany and Russia in the 1930s in addition to Great Britain demonstrated that the effect of national planning is a loss of personal freedom as well as the rule of law. Britain’s Lord Chief Justice warned of a new despotism “exercised by a thoroughly conscientious and honest bureaucracy for what they sincerely believe is the good of the country.  But it is nevertheless an arbitrary government …”

The historian, Jon Meacham, defined the American soul as “ the belief in the proposition, as Jefferson put it, that all men are created equal.  It is therefore incumbent… to create a sphere in which we can live, live freely, and pursue happiness to the best of our abilities. We cannot guarantee equal outcomes, but we must do all we can to ensure equal opportunity.” A government that can being into reality the progressive promises of Sanders and Warren is a government that will have to restrict the freedoms to live freely and pursue happiness.  That is the trade-off that is involved in supporting the Sanders-Warren progressive plans.  While it is unlikely that all of these proposals will be enacted if the democrats win the White House and control Congress, some will in some form.  That is the larger problem.

Implementing any of these proposals or scaled down versions will require ever more regulations and a larger bureaucracy. Regulations will be administered by federal bureaucrats; not angels who would administer them with total fairness and benevolence. Individuals have their own agendas and enjoy decision making power. Hayek warned, “That means …even a strong tradition of political liberty is no safeguard if the danger is precisely that new institutions and policies will gradually undermine and destroy that spirit.”

Author: billo38@icloud.com

Founder and president of Solutions Consulting which focuses on public policy issues, strategic planning, and strategic communications.

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