 Welcome back to the FeeCast, your weekly dose of economic thinking from your friends at the Foundation for Economic Education. I am Richard Lawrence, and our panel is Brittany Hunter, Dan Sanchez, and Mary in March. And we are back after a brief hiatus for last week. We, many of us, went to Freedom Fest, where you were a finalist for the Reason Young Voices Award. Congratulations for that. Thank you. That's an awesome honor for you. And so today we're going to talk about something somewhat familiar to our audience, who have been with us for a while. On FeeCast number five, a couple of months ago, we really started delving into the word socialism. And we had delved previously into other words such as liberal and progressive in the past. But we really dedicated an entire episode to socialism for the reason that it is a very weighty topic. And it's a word that is misused and abused, frankly, very often, constantly, in fact. And so the reason we're reviving this conversation today, of course, is there's been some news. Using that word. There was a woman named Alexandria Ocasio-Cortez, who won a very important victory in a democratic house primary in New York City. And she is a self-described democratic socialist. And she's been making the media circuits recently, going on Stephen Colbert, talking with Margaret Hoover on the new firing line, by the way, which I didn't realize until recently has been revived since the days of William F. Buckley. But she goes on and she talks about a lot of weighty issues. A lot of different things, such as unemployment. In fact, she made a gaffe the other day that said, well, the unemployment rate would be much higher if people didn't have to go out searching for second jobs, such as Uber, various other things. The gig economy would probably play into that. And so one of the things that we want to talk about now on this episode is what is democratic socialism? And that's our topic today. And so I want to cue you first, Dan, because I think you have a very interesting idea. We were talking right before the show about democratic socialism. More is a feeling than is a philosophy. Yeah, I mean, there are definitions and there are technical definitions for democracy and for socialism. But oftentimes when people are advocating it, they're not really thinking technically that they're more feeling. It's more of a sentiment than a philosophy, I think, that it's sort of when people think of the terms democratic socialism, it's more of sort of the associations that it conjures in their mind and generally about human welfare and generally about caring for people. And so the antithesis of democratic socialism, they think of that as the opposite of those sentiments. They think of it as selfishness and not caring for your fellow human being. And really, it's sort of a challenge for us as advocates of free markets and of capitalism because the very word capitalism connotes the ownership of capital and greed. It's a dirty word for a lot of people. And so a lot of us have had conversations with democratic socialists in the past, self-described, and I wonder if we might take a step back because these people who call themselves democratic socialists, including Alexandria Ocasio-Cortez, have concerns. Yes. Yeah, I think that people who carry this kind of sentiment, they have reasonable concerns that they can point to. There are a lot of problems that we experience. I know Alexandria Ocasio-Cortez in particular. She worked two jobs right after college. She had student loans to pay back and she and her mother were trying to keep their house from being foreclosed after her father passed away from cancer. So I completely can see how she would have sympathy for people struggling with student loan debt. I mean, in the United States, 44 million people have student loan debts amounting to 1.5 trillion and that's increased. Your average person has about $37,000 in student loans and that's gone up in the last 13 years. And we can look at things like health care. It's very expensive in the United States to care for your health. And when you compare that to what looks like the cost in other countries, it seems like, what are we doing in the US? Other countries look like they're doing it better. Right. And so it's almost like if you care about those things at all, it's assumed that, well, you must be favorable of democratic socialism. And if you are critical of the policies of democratic socialists, people think that it's because you don't care about those things that you don't care about the environment and you don't care about people's health or students getting out of college with, in some cases, hundreds of thousands of dollars of debt and not being able to find a job. And it goes back to a quote that we talked about last session. I mean, last episode of Frederick Bostiot said that people who think that we don't who, when we say we don't want the government to provide these things, socialists assume that we are opposed to those things, like health care and education. Not only that, but you look at why student loans were able to get so high, why health care is such a mess. That is a government-controlled system. Both of those things are only possible because of it's not capitalism. Capitalism would provide a much different solution. It is government control of the economy. And also when you're calculating these things, I don't know that when we look at the Nordic countries, for example, and we talk about their costs for health care being lower than the United States. I don't believe that's factoring in the amount that's being spent in tax dollars to pay for health care. Right, right, because that's typically left out of the equation because it's always looking at the wider economy without government investment. But there is something interesting about what Alexandria Ocasio-Cortez said on maybe numerous shows, including Stephen Colbert, where she said basically a democratic socialist believes in a country as wealthy as the United States that no one should be hungry, no one should be without an education, no one should be sick. And of course, no one should be sick enough that they go bankrupt because of medical bills. And so these are legitimate concerns that she's bringing to the table now and trying to find ways to address those through her surprise win of the primary. And we have an article about that appearance. It's called The Questions Stephen Colbert Should Have Asked Democratic Socialist Rockstar, because that's what the New York Times referred to her as, as a political rock star. So we have that link in underneath the video. But what was that question? Well, a lot of questions about how would socialism work in practice? That's what the author Barry Brownstein was getting at. But really, I mean, the discussion that she had with Colbert, it was so superficial. It was, and it was, again, assuming that being for those things, like not wanting people to be too poor to live, she said, is what democratic socialists believe. But the thing is that that's what classical liberals have believed. That's what we believe. Since the 18th century. Yeah, I certainly don't want people to be in poverty or to be drowning in debt. That's no way to live. And to be fair to her appearance on Colbert, those shows are not exactly the best venue to go into deep philosophical or political discussions. So there is an ability to kind of gloss over these sorts of things. But that's why we're talking to you here. And that's why you're watching this. And so all of us have had opportunities to talk with people who identify this way, democratic socialists. In fact, you, Brittany, you were telling me this really interesting story about a time in college. Yeah, well, it baffles me because, again, we I think democratic socialists have this this idea that they're kind of holier than that, right? Because they care about people. But oh, and no one else is afflicted by this problem of any other ideological persuasion. But during my undergrad, I had, you know, opportunity to have classes with all these people. And one one particular student looked at me and he said, you know, once a week we go out and we shoot guns practicing how to kill you, how to kill capitalists, essentially. And I thought, you know, how how socially tolerant of you, how democratic of you to use that to use that against me. But it was a little bit jarring, one how angry. And I'm not saying all democratic socialists are angry, but there seems to be an underlying kind of anger where where there's we're so mad that things aren't all equal that we're going to go this route. And it's scary, it's terrifying in some instances. And it's sort of a populist emergence of this trend, because really the Occupy Wall Street movement, which was like anger based. That's what I was in college. Yeah. Yeah. And it was justifiable anger. There was a lot of cronyism. Absolutely. That was resulted in the financial crisis. And and so there were a lot of deep concerns, but they were blaming the wrong people. They were they were blaming capitalists when they really they should have blamed government or at least done research to see who to blame. But I don't think that they just assumed capitalism. We're going to go a lot more deeply into these ideas in just a second. But I do want to take one moment because use the word there populist. What is populism? OK, well, populist is sort of grassroots, so it's sort of like a good thing. Not necessarily, because a lot of times when people get into this mob mentality, there's like an anonymity of the mob, and it can make them push for really criminal sources of redress that people wouldn't have been willing to do if they did in a private, individual capacity. OK, so these are mobs of people getting together, advocating for a certain type of change. And when someone is called a populist, generally, I think the other implication there is that they are basically playing to the lowest common denominator, demagogue or a rabble rouser. Right. So they can be nationalists. They can be socialists. They can be of really any particular persuasion. But what it typically ends up in is the person who's advocating for this populist sentiment has more government control over society, over life. Right, because a mirror image of the populist Occupy Wall Street movement was the populist Tea Party movement. Exactly. And a lot of that got funneled into the Trump candidacy. So much of it, too much of it. Just as much as Occupy Wall Street got funneled into Bernie Sanders and now Ocasio-Cortez. Both Democratic socialists who will talk about a little bit more, but we're going to take a quick break and we'll be right back after those messages. Welcome back to the FeeCast. We've been talking about Democratic Socialism. And one of the most interesting things to me about Democratic Socialism is how it's socialism that's been modified by democracy. And so it feels to me like it's a very different thing. And so it feels to me like it's not quite socialism because it's Democratic Socialism. It's kind of like all these other terms that we're using today, like environmental justice or social justice, various other things. Neoliberal would be another one that people in our field would be recognizing. But it's interesting to me because these modifiers end up changing entirely the word that follows them. And so I wonder Democratic Socialism, we're going to get into this, whether it's actually true socialism. But I'm thinking maybe it's not. Yeah, I mean, it's sort of a modification of a modification because socialism in the first place is sort of like a terminological strategic move. Because when you think of society, that's something that everybody favors, including capitalism and liberals, that but but hanging the word society on your ideology, it gives it sort of like an automatic endorsement. And but then what happened is that what people were calling socialism ended up having a huge death toll and a really bad track record. So in spite of the positive connotation, it started getting a negative connotation. And so then the people, the socialists felt like they had to distinguish what they were advocating with the bad things that happened in the past with Stalinism, with Soviet communism. And they said, OK, well, in the past, socialism was about revolutionary communism, where we liquidate the capitalists and we overthrow the government and we establish a dictatorship of the proletariat. But this is kinder and gentler. This is democratic socialism. So we don't want tyrants. We don't want authoritarians. We want democracy and we still want all the same economic policies. But we want it through democratic means, right? It's so interesting to me because in the aftermath of World War Two, the social democrats were some of the biggest and most popular parties in Europe. And that was a time at which social democrat basically was somewhat socialist. And now social democrats are identifying themselves as democratic socialists. So the evolution of terms also plays into this. But I think the bottom line here is when people think of socialism, they should not think of something that's particularly social. Socialism by itself is when the means of production are owned at least partially, but many times fully by the government. That's the major distinguishing factor here. And so when people talk about democratic socialism as something only that really addresses human welfare needs, they're really misusing the term socialism entirely. Yeah. And especially when you talk about I mean means of production are part of it, but I think a lot of people associate it with the redistribution of wealth, not realizing that the redistribution of wealth is only possible once you've seized the means of production and you have wealth to redistribute. You can't do that without it. So while it is a part, it is not in full, you know, what we think of socialism. And I think that's why people are able to get away with sort of like the kinder, gentler feelings because they're emphasizing the redistribution. They're emphasizing caring for people and they're glossing over the the seizing of resources that has to happen first. Yeah, you can put lipstick on a pig, but I'm not going to kiss it. And I think that you can dress up socialism in any way you want. But at the end of the day, if you're taking things by force, you're not advocating for a policy that's pro-social. And from what we've seen out of history, that that's where this always leads. All of the nations that called themselves socialists years later, we're like, oh, but they were communists. They weren't socialists. They weren't doing it right. Right. And you have an article coming out about Simone Bolivar, at least in Bolivia. Yeah. And and sort of the moniker that the current regime in Venezuela used when they're talking about their socialist revolution that they are still in the midst of is Bolivarian Bolivarian socialism. And so they've that's kind of their modifier on socialism. And that is not working out very well for them in the least. Down in Venezuela, like we've spoken about in the past, starvation, crime, infant mortality, not just starvation. We're talking people resorting to eating their pets because there's no food. I mean, it's not even just people are going hungry, they're skipping a meal. I mean, this is horrific. These are the things that we can imagine in the case of Venezuela. They were the number one producer of grain not that long ago. There was an article we were talking about from a few years ago in The Nation magazine and it was entitled Venezuela's radical food experiment. And they mentioned in this another kind of obfuscation of terms, a term called food sovereignty, whereby the implication is that a country should be self sufficient about its supply of food. And we're seeing this all the time with energy independence is another thing that we've heard about in the United States here. But they haven't quite achieved anything positive from a policy of food sovereignty. No, I mean, you you really need to be integrated into the division of labor to really be well fed that like you can't just isolate yourself and expect. I mean, we talked about the idea of Wakanda being, you know, self sufficient paradise, but really no single country has enough natural resources to live the kind of living standards that we've grown accustomed to. These living standards were built off of globalization. It was built off of the fact that the division of labor has extended throughout the globe because of markets. And that is why we're able to have the living standards that we have. One of our heroes, F.A. Hayek used to say the larger the market, the greater the amount of specialization. The bigger the pie, right? That's right. The bigger you can grow the pie because people can focus on the things they're best at and outsource the things they're not, which is most of the things that we rely on to live good, healthy, fulfilled lives. I think one of the perhaps mental blocks we could call it for democratic socialists is that they think of things that we think of as being good things in our lives of community and caring for the elderly and cleaning up waste on the street. They think that these things are going to be impossible in a capitalist society because there is no incentives that they can see to do them. And I just think that's not the case. That's right. There's private charity. I mean, they just always assume that in a free society that the only way that we can help each other is if there is payment involved and there's a quid pro quo. But civil society is much more consistent with a market society than it is with a communist society that that people actually are a lot less generous. And we have a Barry Branstad article about that, too, that people are a lot less generous when when there's a centrally planned economy because it's just a lot poorer for one thing that and so people are a lot more grasping of resources and really there's no such thing as coerced charity. And so like being having your own things to be generous with is important for generosity. It's free will, right? You're making that decision rather than having it stolen from you and then claiming charitable acts. But Dan, I think the first part of you of what you said is to me the most crucial that once we've covered our own needs, that's when we can look beyond ourselves and look to our neighbors and help them with their struggle. But if you're not covering your own needs, then how can you be helpful to anybody else? Put on your own gas or put on your own air mask first, like they say in airplanes. That's right. So it always strikes me whenever I'm talking with a socialist or a democratic socialist, the degree to which you mentioned charity in civil society, the degree to which charity is mocked as a way for people to actually address problems for the poor and disadvantaged. And there's an argument to have and perhaps we could have another fee cast that goes into this, that charity is far from a panacea. It won't fix every single solitary thing. You want to have economic growth so people can end up taking care of themselves in many ways. They can find new ways to serve each other, create value, create wealth. But it always strikes me just how much the idea of charity is put down from among those people who believe that the state is the only actor who can participate fully in that kind of stuff. I wonder if those people have ever been the beneficiaries of charities themselves, because I think the people who have benefited from those kinds of private charities would say differently. I think they would say that they were helped in times of need and they're grateful for it. So switching gears for just a second, I wanted to mention again, that article that you're writing now, because I think that one of the problems that we have in our discourse is that a lot of the countries that we assume are socialist like those countries in Scandinavia that we constantly hear they can make socialism work. But a lot of those countries that we call socialists or at least perceive that way aren't actually socialist. And Bolivia is one that you're working on. Yeah, it's a lot of socialist or democratic socialists right now are trying to say socialism works because Bolivia's economy is thriving. But when you look at the numbers and you actually take a look at why Bolivia's economy is thriving, it's because they've been able to find loopholes in which capitalism can still exist. The black market is able to thrive. The drug war has been deescalated. So all these different things are coming to part or coming to play where the economy is able to boom because of capitalism sneaking through the cracks, not because of socialism. This is interesting. Didn't Murray Rothbard say something? I believe capitalism breathes through loopholes was the Ludwig von Mises said that. And that's an interesting idea. So it doesn't matter how many restrictions you put in place, as long as there are ways for people to kind of circumvent those, they can end up producing happy, healthy, fulfilled lives. Yeah, the market finds a way. And there's even an example in when, you know, peak communism in China that there were still farmers able to sell their extra crops, you know, on the side and black markets because they had to. So when you have to do that to thrive, the market finds a way. Markets are everywhere. The question is to what degree and if they're small time or if they're able to be big and actually serve the great mass of people. So we're going to talk a little bit more about this in a few minutes, but we're going to take a quick break and we'll see you after that. Oh, boy, you know, starting out in the music business or just any business, you have to have the carrot dangling. You have to know what your goals are. I think if anybody goes in without a goal, you're pretty much doomed. This is a family business. My daughters, my son-in-law, my brother, we can't walk away from this. This is something we pass on. I mean, you're always going to run into the wall. It's just, can you figure out how to go under it, around it, over it? That makes for a longevity of a business. You can't give up. You just don't let yourself give up. Watch Mama Gold Tone and more documentaries about women in business in our How We Thrive series at fee.org slash shows. Welcome back to the FeeCast. We've talked a little bit about the meaning of words, the history of some of these words, and we've talked about sort of the contemporary importance of them. One of the questions that I want to throw your way now, Brittany, is, in your opinion, what would a democratic socialist society actually look like? Chaos. I mean, it doesn't even work that way. I think of Stalin. I think of Lenin when I'm thinking this, because I'm thinking of a really loud group of people trying to impose what they believe, which socialism, owning the means of production, on people who don't necessarily care about it. People who aren't necessarily proponents of this idea, but you have this very loud and sometimes violent group coming into power with these really loud ideas. So it's not going to be some peaceful utopia, because at the end of the day, everybody on this panel is not going to agree with it, and we're going to have to be forced into this system. And not only on this panel, but on the street. On the street. It's not, yeah, exactly. Or anywhere else. They're always going to be divergent opinions. Exactly. And when Milton Friedman talks about democracy, he associated it with political freedom. And one of his points is that you cannot have political freedom without economic freedom, because if you concentrate, if you have truly the ownership of the means of production in the government hands, then that is a huge concentration of power, because you can determine what everyone does. You can determine how much everyone is compensated. You can determine where they work, if they work in Siberia versus if they work in Moscow. That kind of concentration of power is not consistent with the democracy. And so Milton Friedman would say, he knows of no place where a country has been wealthy and prosperous, where there has not been economic freedom. Because you can't have political freedom without economic freedom. And every prosperous society has a great measure of both. And I think that's why we're seeing such tyranny in Venezuela. So a lot of democratic socialists say, well, that's not real democratic socialism. That's not real socialism because our idea of socialism is where people are free to have dissent. But when the central government in Venezuela controls rationing how much people eat, I mean, they even have these plastic bags of food that are only allocated to good standing members of the Communist Party. When you have that kind of control, there's no real freedom of dissent. There's no real political freedom. No, and it kind of reminds me of, you see these people in college campuses very loudly championing censorship. A lot of these same people are democratic socialists that are trying to keep right-wing people off their campus because they disagree with them. So where's the dissent? Where is that conversation happening? Right. And another point I think is that crisis leads to centralization of power. Absolutely, yep. And when you have these food crises, and when you have the kind of poverty that socialism breeds, that really lends power to the state, to the central state, and really diminishes political freedom also. And of course, when you say Stalin and Lenin, that's of course outside of the minds of anyone who believes themselves to be a democratic socialist. But you're saying that it's inevitable that if you want to achieve a socialist society, that you have to have a great deal of censorship, a great deal of repression of people who disagree with the regime as it's pursuing its policy, of enforcement, of executive power. And so we might not, as democratic socialists, if we were, think that we were going in that direction, but there's really no other way to go. Once you start controlling the economy, where can you stop? Because you start controlling it, it's not going to work. And then all you can do is attempt to add more controls or say, oops, that was a mistake. And once you have power, who's going to give it up? Yeah, Ludwig von Mises in an essay that we have on feed.org called, Middle of the Road Policy Leads to Socialism, makes that point that there's always going to be bad side effects of every intervention. If you try to fix those with new interventions, then those create more side effects. And it just mounts until you have complete socialism. So wait, let's take a step back, because again, there's a difference between this socialism, as we've described it, and sort of the idea of the welfare state, right? So the concerns of democratic socialists include high healthcare costs, high costs for education, including college education, poverty, inequality, and all the problems that stem. And the destruction of the environment. Destruction of the environment, right. So they're not actually talking about government controlling the means of production. Why is democratic socialism of the welfare variety, the slippery slope that you guys are talking about? Because, like as we've seen, that in healthcare, for example, that we've had massive interventions, especially since the New Deal in the healthcare industry. And it has led to really skyrocketing costs. And it is those costs that has been the impetus for Obamacare. And now we have the failure of Obamacare saying, oh well we need nationalized healthcare, we need single payer healthcare. And so as long as you pursue the internal logic of the welfare state, ultimately it leads to socialism. I want to make sure we're absolutely clear on what you just said, Dan. Previous interventions by the government into these areas such as healthcare have caused the crises that we are still dealing with today in those areas. Exactly. And then call for more intervention, which leads to more crises, which calls for more intervention and so on. But on that note, speaking of capitalism surviving through free loopholes, I wrote an article a couple of weeks ago about medical tourism. People are now leaving the country and getting cost better care at lower costs. So even amongst the government's screw-ups and how they're making it worse, there's still elements of the market that are able to peek through and consumers are able to find those. And what's beautiful about that is that actually delivers on the promise that Marxists pretend to offer. That that is actual the democracy of the market. Mises calls it consumer sovereignty, that every consumer votes with their dollar and all the different consumers can have lots of different plans that mesh with each other and that coordinate through the very intricate market system, whereas the brute top-down centralized system, that leads to tyranny because ultimately you have to have a strong man determining one direction for the economy when you have central planning. You can't have lots of different people having different plans when the government owns the means of production. See how well that worked out for Stalin and the people under Stalin and Lenin. And even if you were to start out with a benevolent dictator or a benevolent group of controllers, how long are those people going to last before they get knocked out by a stronger man and a more violent man? And so there is sort of a timeline of how, let's say, we want to have more affordable healthcare. There's a timeline of intervening on that and then slowly, surely, but slowly, we become actually socialist, right? The government must at some point after intervening time after time to make these little tweaks here and there, the government must at some point say, let's take it over entirely. And we've seen that with single payer, right? So people are saying, Obamacare didn't go far enough. Now we need single payer. We can't have a mixture of private and public. It has to be, I know, all be government. Where's that going to lead us? The fact of the matter is, the central planning and the control, it doesn't work. I was a lefty in college. You may have called me a democratic socialist back in the day. And the reason that I changed my mind is because I learned and I realized that to get what I want, to get people out of poverty, this is not the way. The way is through free markets. Yeah, and it's because you went beyond sentiment. You went on to philosophy. You went beyond just assuming that if you're a good person, then of course you want socialism. So like, okay, I don't want to just seem virtuous. I want actual results. I want a system that actually works for poor people. And once you actually understand economics, then you understand that the market does. And so I'm curious a little bit more about your transformation there. So once you started really studying history, philosophy, economics, you started to understand that for the things that you wanted, the market process, a free and civil society would work better. Right. So I studied public policy in school. I graduated from Georgia State University and we talked a lot about policy and how to intervene, what that actually looks like. And I thought that, well, we've got science. We've got these beautiful charts that show me if we intervene here, if we manipulate the market here, then this is going to be the outcome. But there was a whole lot of unseen factors that I as my college student writing, you know, a five page paper wasn't thinking about and couldn't think about because I don't know everything. The pretense of knowledge, I believe. Yes, absolutely. And so when we talk about the market process, we're talking about the ultimate in individual determination, right? We're talking about individuals all throughout the society actually selecting what, for example, to purchase, what not to purchase, which places to patronize how to live their lives according to what they want to achieve, which is far different. And in fact, a bottom up solution to the problems of society that we know that we face and much, much different than some politician or bureaucrat saying, this is the way it must be. This is the way the problem must be addressed. Right. And in that system, again, the consumers are sovereign and even the capitalists, even like the richest capitalists, ultimately is a servant of that person insofar as he is a producer. In his consumer role, then he switches his hat to be sovereign. But ultimately, everyone as a producer is serving each other as consumers. And they do it so rapidly too. Amazing how quickly a company will actually respond to a problem much more quickly than the Congress or even this local town hall. Yeah. I had a problem just a couple of weeks ago with Southwest with my flight leaving late and I sent them a mean tweet and they were back to me within 24 hours like, I'm so sorry about your issue. They go out of their way to make me happy. Without a word for the DMV or the post office. Oh, my goodness. I know they told me to get another line. And all you get from your congressman is a letter six to eight weeks later that's written out of a form. Well, this has been an awesome conversation. We'll pick it up next week. We'll talk more about these ideas and others on the FECAST. We'll see you then.