Here’s how Yahoo Finance constructed the socialism-capitalism spectrum we used to identify the economic orientation of 15 prominent Democratic presidential candidates.
First, we analyzed each candidate’s views on 4 key economic issues: Trade, climate policy, taxes and health care. For each of those topics, we established three categories: One that was more socialistic, one that was more capitalistic, and one that was in between.
We consider socialistic policies to be those that rely heavily on government intervention or programs controlled by the government. We consider capitalistic policies to be those that rely primarily on private-sector solutions and incentives. An in-between stance is typically one that includes a little of both.
We realize the terms “socialism” and “capitalism” are open to interpretation. In an American context, we’re applying limits to these terms, consistent with the range of policies politically plausible in the United States. We’re not suggesting any of these candidates are promoting Venezuelan-style authoritarian socialism, at one extreme, or unbridled Ayn Randian capitalism at the other extreme. The range of choices is more narrow and depends largely on the role of government.
All four of the policy issues we consider arguably require some degree of government intervention—and the range of policy options varies from more socialistic to more capitalistic. Climate policy illustrates the distinctions. A majority of Americans consider global warming an important problem requiring some kind of action. The Green New Deal, supported by Bernie Sanders, Elizabeth Warren, Cory Booker, Kamala Harris and others, would rely on large new government bureaucracies—funded by new taxes—to shift the U.S. economy away from carbon fuels. We consider that a more socialistic policy. A more capitalist approach would impose carbon taxes, and possibly a cap-and-trade system, to create market incentives for companies and consumers to pollute less, an approach favored to at least some extent by John Delaney, John Hickenlooper and Jay Inslee.
Here’s how we evaluated various policy positions in each issues area:
More socialistic: A full single-payer system such as Medicare for all.
More capitalistic: modestly expanded federal programs that preserve private-sector health coverage.
More socialistic: Substantial tax increases on the wealthy and perhaps others, to fund large new government programs.
More capitalistic: Modest or carefully targeted tax increases, at most, with emphasis on tax-code efficiency.
More socialistic: Trump-style protectionism.
More capitalistic: Support for free-trade deals such as the old Trans Pacific Partnership, with room for more worker protections.
More socialistic: Aggressive government intervention in industries such as energy and transportation.
More capitalistic: Carbon taxes and other incentives that allow markets to determine the most efficient ways to cut pollution.
We ascertained candidates’ positions on the issues by analyzing their public statements and positions, and asking their campaigns when we weren’t sure. Some candidates haven’t staked out clear positions on all four of these issues. In those instances, we did our best to estimate where the candidate is likely to come down, based on past policies and other factors. We’ll update our analysis as candidates refine (or change) their positions.
We acknowledge there’s a degree of subjectivity in what we consider “socialistic” and “capitalistic,” and also in the way we may interpret some candidates’ positions. We welcome feedback and debate on these important issues, and we may tweak our candidate ratings as the 2020 campaign intensifies.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman