Socialist Democracy: The Truth About Nordic Socialism

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Socialist Democrat. That title rings loudly today, and everyone in America knows the word. Unfortunately, not everyone has a real idea of what it means. Advocates for these ideas don’t want to look at failing nations like Venezuela, Cuba, USSR, along with a number of other examples of failed socialist policies. No, instead they would like to cherry pick the countries that they believe will demonstrate their idea of what a socialist country would look like. Well, to that I say that I will come to you and we can hash that out on your turf. Let’s play this game.

Socialism is the idea that we can force (through government) everyone to be equal by negating the fact that we are all different. Democratic means that 51% get to tell the other 49% what to do. So Democratic Socialism is 51% telling the other 49% that, through the utilization of government’s monopoly on force, they can make everyone equal. No country has ever lifted itself out of poverty through socialism, however. Although, it is true that socialism has contributed to vast amounts of equality. It’s just too bad that the equality achieved through socialism makes everyone equally poor. Socialism relies heavily on taxation and wealth redistribution. As Winston Churchill once stated: “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

All these countries that are touted about as shining examples of successful democratic socialism all gained the economic ability to become socialist through capitalism. There had to be capital before there could be redistribution. Many of these countries are starting to revert because they see the error of their ways. Many of its defenders like to argue that “at least they are the happiest people on the planet.” Well, happiness is rather subjective. Some people like running – I don’t. A 60.2% tax rate, like in Denmark, wouldn’t make me too happy either. Of course, neither would not being able to have control over where I go to see a doctor, what kind of housing I should live in, or which line I should stand in for bread.

Denmark is not a diverse country, something the left champions all the time. Almost 90% of Denmark’s population are of Danish descent; one-fifth of the country’s population lives in one city, and Denmark’s median household income is $38,000. The truth is that when we are dealing with a homogeneous group of people who are very alike and share similar core values, along with the fact that they live in a small population, some of these “socialist” ideas may work in a family-like setting. However, I do not come home from work and divide my paycheck between my wife, my 6-year-old, my 5-year-old, and myself. Same goes with democracy; I wouldn’t ask for a vote on whether or not the family should buy a new car. America is 300 million, very diverse people. So, to simply say that all the people of the Nordic model are happier, therefore, democratic socialism is perfect for America is asinine.

While each of the Nordic countries falls under the banner of the Nordic model, they all differ slightly. However, there are usually commonalities like a free-market economy, high-tax welfare state, and government mediation between private companies and giant worker unions.

Now let’s evaluate some of these “socialist” countries.

Denmark is often propagated by many, including Emperor Bernie Sanders, so let’s start with Denmark. Pre-1960s Denmark was filled with free markets and low taxes, which led to extreme prosperity. In fact, in 1960, 25% of Denmark’s GDP was attributable to taxes, while America’s was 27%. The top income share in Denmark saw its steepest decline between 1870 and 1903 and continued to decline until 1980, where it finally began to level off. Nevertheless, after the ’60s Denmark’s national wealth ceased, and the welfare state began to rise. Denmark’s health care system leaves their life expectancy as the worst in Europe, and with the highest cancer rate in the world. Life expectancy for Denmark, as well as Sweden, was ranked highest in the 1950s all the way up to 1980, but now both countries have steeply declined. The dirty secret of Sweden is that the country was a free-market success story before 1870, but began to stagnate after the inception of democratic socialism between that time and 1936. Income inequality was already on its way to a level point before the inception of the Swedish welfare state, which led to the aforementioned stagnation.

Finland is a country that seems like it has everything together, but looks can be deceiving. Finland is one of the most expensive nations in Europe, only surpassed by Denmark, Norway, and Switzerland. In 2016, in reaction to stagnation, Finland actually cut back on worker benefits. I would argue that this has much to do with the cronyism between the corporate-style labor unions and governments. By continually increasing a minimum wage and tampering with the market, inflation will occur. So, that means that even though Finland is one of the highest-earning countries in Europe, because their cost of living is so high, their buying power is weak.

Another oft-forgotten statistic is the economic comparison between native Nordic citizens and those who’ve moved abroad. For example, Nordics seem to be much better off, on average, in America than they do in their home countries. Danish Americans average $70,925 a year, much higher than the sub-$50,000 average annual wage in Denmark and even higher than the average American’s $52,592 per year. Norwegian Americans don’t even have the wealth from oil like their native counterparts, yet Norwegian Americans still have a 3% higher living standard.

Both New Zealand and Canada, like the Nordic countries, have free-market economies with a large social welfare state. They also limit other liberties like freedom of speech and firearm ownership, which are violations of human rights. New Zealand’s Prime Minister, Jacinda Ardern, called capitalism a “failure.” The problem here is that without that capitalist economy, all the wealth redistribution would cause the country to turn into another Venezuela, Soviet Russia, Cuba, or other “not real” socialist country.

China has had a completely controlled economy. However, in recent years they have begun to move towards a more free market economy, which has led to their rise in economic power. Still, this is at the expense of the people of China, and they live in abject poverty that the government has put them in. We can see isolated areas, like Hong Kong, that have been left to their own devices, and have thrived under free markets.

It’s not just China though. Many of these countries have begun to dial back the socialist ideas that have plagued their countries for decades. In 2017, Denmark’s Prime Minister, Lars Lokke Rasmussen, wanted to cut Denmark’s tax burden by 3.7 billion; while Finland decided to take a step toward phasing out socialist policies by implementing a universal basic income. This was in lieu of a number of social services. While this is still a redistribution of wealth, a universal basic income allows for recipients to spend the money as they so choose, which will benefit the economy more than previous programs would. However, this is still a huge problem despite it being a step in the right direction.

Some countries like Sweden have attempted to merge socialism and capitalism by having their public hospitals and schools run by private organizations, but this has failed because private entities have veered away from investing. Still, they blame capitalism when it was truly the exuberant demands of what government deemed them to provide coupled with restricting the methods of being able to create profit.

Since the 70s America has seen a rise in the socialist agenda, in much the same way as the aforementioned countries. Capitalism and free-market principles have caused a nation to be prosperous, only to have the idea that we must redistribute that wealth. Then, when the money runs out, we must borrow. Following that we see a push for capitalism to be abolished because it “doesn’t work,” and finally we see a full-scale socialist agenda. This inevitably leads to an implosion of a nation, the deaths of hundreds of millions of people, and a full-on collapse of an economy. The United States can become a third world country. While this hasn’t been common among the Nordic model, it is still indicative of the American socialist view. Many proponents of socialism in America, like Sanders and Cortez, will cite these Nordic countries, but advocate for a more centrally-controlled economy, similar to those in Russia and China. These democratic socialist countries are beginning to revert some of their ideas. Just as they never let go of the capitalist economy, because they knew they had to keep that in order to attempt to keep these welfare programs afloat, they are starting to backtrack the policies.

If you want to know how America should emulate these countries, it is this way: America needs to revert back to more of a free nation. We need to phase out bankrupting social welfare programs that have utterly destroyed other nations and are eroding the United States. We need to push back on these garbage economic policies that don’t balance out and allow Americans to be all-around free, just as the founders intended.

With a relatively free market economy and a growing welfare state, America is a democratic socialist country, and we need to push it back out if we have any hope of surviving.

You can read more from Rocky Ferrenburg on Think Liberty here.

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