Bernie Sanders is right: Markets are dumb

[Jefferson23]

May 29, 2015

Jeff Spross is the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.


One of the more striking aspects of free market ideology in American politics is how cornucopian magical thinking has become not just acceptable, but ubiquitous and nearly unquestioned.

Consider the reaction to a seemingly commonsensical observation that presidential contender Bernie Sanders made on Tuesday. "The whole size of the economy and the GDP doesn't matter if people continue to work longer hours for low wages and you have 45 million people living in poverty," Sanders told CNBC. "You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country."

The smug contempt from outlets as varied as The Washington Post and Reason was swift. Even The Week's own Jim Pethokoukis and Michael Brendan Dougherty got in on the scolding. But no reaction had quite the same quality as that of National Review's Kevin Williamson, who insisted "prices are not arbitrary" before going full Road-to-Serfdom on the Vermont senator:

in full: http://theweek.com/articles/557559/bernie-sanders-right-markets-are-dumb

[merrily]

1. Markets are dumb AND rigged, not free.

[Jefferson23]

2. So rigged, it is criminal. n/t

[Hoyt]

3. Agree with concern for poor, but Sanders really is going to cost American jobs if he thinks

people will purchase goods at the same rate if there are fewer choices of products.

I agree, we don't need so many choices of sneakers, deodorants, etc. But, the economy might well need those choices. Doesn't matter to me, I pretty much have two pairs of shoes, one for when I can't get away with the same brand/look of sneakers, and that's not very often. I have hiking shoes and my dress hiking shoes that aren't quite as big/aggressive. But, how many folks are going to pare down.

Similarly, I've used the same deodorant for decades. Not sure it works that well by people's reaction, but I like it.

I've said before that I would love to see our country more like Denmark -- economically and socially -- but a lot of yahoo voters aren't going to like the idea of limiting choices, and perhaps paying more in taxes to help the poor.

If Sanders is saying, you and I don't need so many shoes, and other things, and should pay more in taxes to help the poor -- he's probably right. But, I can hear the squealing among Republicans and Democrats who believe only people making more than them should pay higher taxes. And, if we are buying less stuff, that will cost jobs, which will create more poor. There's got to be a balance, and Sanders needs to make sure he projects that when he makes such statements.

Again, I agree that this country is screwed up in that we don't do enough to help the poor, and should raise taxes on everyone (more on the well to do, but it will take everyone). But, people cutting back on sneakers is not the solution.

Sanders might have been taken out of context, or he might just have made a poor choice in describing his concern for the poor.

It will be interesting to see how that plays out.

[Hippo_Tron]

4. Our GDP per capita is over $50,000

That means that we produce $50,000 worth of goods and services for every person (that includes children, retired, unemployed) people in the United States. $50,000 a year is enough for someone to live comfortably. When we have a GDP per capita that high and we still have poverty, it's a distribution problem.

[Hoyt]

5. Whatever, you'll be hoping to redistribute a lot less if there are only a few styles of sneakers,

deodorants, etc.

[AgingAmerican]

6. He is saying the country doesn't need flooded with cheap Chinese crap

nt

[jonno99]

7. The problem I have with this line of reasoning is: WHO is going to make the decision

as to what products a store should carry?

History has shown again and again that central planning results in poorer quality, less choices, and subsequently poorer service, and a higher likelihood of product shortages.