× Expand AP Photo President Franklin D. Roosevelt at the dedication of the Chickamauga Dam, a TVA project, in September 1940

Bernie Sanders has made democratic socialism a mainstream idea. Or more precisely, by embracing an ideology that had dared not speak its name, Sanders has demonstrated a latent yearning for a more social economy.

But what does socialism actually mean in 21st-century America? And how radical a break would it be from New Deal–style progressivism, which in fact embraced a good deal of democratic socialism without using the word? (In that respect, FDR anticipated Elizabeth Warren.)

It is tempting to argue that Sanders-style socialism is not that much of a break at all.

FDR, after all, socialized a good chunk of the economy.

But I think we do need a break in one key respect. I’ve teased out this argument in a chapter in a new book, which my Prospect colleagues and I just helped launch at a book event February 25.

The book is titled We Own the Future. Let’s hope so.

We need a more radical break because New Deal progressivism, as great as it was, did not survive an assault from politically resurgent capitalists who commandeered the power of the state beginning with Reagan. That demolition job has now continued for four decades. If our turn comes again, we should not make that mistake a second time.

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What was New Deal progressivism? Basically, through a combination of regulation of labor and capital, social insurance, and public investment, the economy of the New Deal–Great Society era fought capitalism to a draw. This was the era of the so-called mixed economy, in Paul Samuelson’s phrase.

But it turned out to be too mixed to survive.

Two elements were key. For a brief period, government actually sided with organized workers. That enabled strong unions to be political as well as economic counterweights to the immense power of capital in a still mostly capitalist economy.

Government also regulated financial capital to the point where the banking system was almost a public utility. (Investment bankers were on their own, with no expectation of a government bailout if they misjudged risks, which had a salutary effect on risk-taking.) And the SEC insisted on substantial disclosure and transparency.

The financial system was simple enough to regulate. There were no hedge funds, no private equity, no leveraged buyouts, no off-balance-sheet assets, no derivatives, no collateralized-debt obligations.

In the now lost era of the mixed economy, corporations, faced with the power of government and of unions, grudgingly adjusted. They treated unions as stakeholders, and the New Deal regulatory system as the new normal. And they still managed to make tons of money.

But this new normal was politically and institutionally fragile, because private capital retained immense residual power. And that power was only sleeping. It took only one bad decade—the 1970s—for it to come roaring back.

That’s why American progressivism 2.0 needs to be more socialistic. If you look back at the New Deal–World War II era, there were the beginnings of public capital. War production plants were financed not by Wall Street but by the Reconstruction Finance Corporation. The original Fannie Mae was a public entity. Roosevelt was serious about public power via the Tennessee Valley Authority and the great western dams.

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There is a lot that public enterprise actually does more efficiently than private business. Much of the banking sector could be public banks. Most of the pharmaceutical sector would be more efficient if all R&D were financed by the National Institutes of Health, and drug patents were in the public domain. Likewise the internet and its governance. Likewise green public power. Likewise, of course, the health system. Another book that I recommend, The Public Option, by Ganesh Sitaraman and Anne Alstott, spells all of this out.

Our system of social housing is a disgrace because we mostly bribe private developers to provide some affordable housing, which in practice is neither sufficiently affordable, nor sufficient. We need a social housing sector in perpetuity, which can never be part of the market economy.

But before we can trust the government not to be captured by the same special corporate interests, we need to rebuild political power. The New Deal provides an embryonic example. Rural electrification coops not only generated electricity; they generated local progressive leaders. Likewise the early public health service.

In the late 1930s and early 1940s, there was an instructive debate between John Maynard Keynes and one of his protégés, a Polish-born economist named Michal Kalecki who positioned himself somewhere between Keynes and Marx. Kalecki conceded as a matter of technical economics that it was possible via macroeconomic manipulation and tight control of finance to keep a basically capitalist economy at full employment. But as a matter of politics, he warned, the capitalists would never let you do it.

In the heyday of the mixed economy, it sure looked as if Keynes had won the debate. Now it seems that Kalecki won. And that’s why we need a more socialized economy—to weaken the political power of capital as well as the economic power.

One other favorite quote fits this occasion. In 1972, a very young Christopher Jencks wrote a classic of a book called Inequality. Jencks’s research demonstrated that if you were serious about building a more equal society, schools—everyone’s favorite panacea—didn’t take you very far. He closed with this epic insight:

As long as egalitarians assume that public policy cannot contribute to economic equality directly, but must proceed by ingenious manipulation of marginal institutions like schools, progress will remain glacial. If we want to move beyond this tradition we will have to establish political control over the economic institutions that shape our society. This is what other countries call socialism.

This is what other countries call socialism. In 1972, Jencks prudently and puckishly declined to embrace socialism directly.

Today, it is becoming acceptable to call it socialism in our own country. And we’ve lived to see the day when the frontrunner for the Democratic nomination describes himself as a democratic socialist, and according to the polls a majority of Democrats say Amen.