Under the traditional definition of socialism that requires government ownership and distribution of the means of production, the Scandinavian countries—Denmark, Finland, Norway and Sweden—are not socialist, as Democratic presidential contenders insist.
All are free market economies. None has government-mandated minimum wage laws. These are set by unions. The Fraser Institute, which ranks countries of the world on economic freedom based upon limited government, property rights and sound money value, not socialist attributes, ranked Denmark 14, Finland 20, Norway 26 and Sweden 19. The United States was 12. Socialist countries normally take the bottom of the 180 countries ranked (Economic Freedom of the World Index ).
As to rankings with respect to the ease of doing business, all four countries ranked in the top 17 countries out of 191 on the planet: (Denmark 3, Norway 7, Sweden 12 and Finland 17). The United States is ranked 8 (The World Bank, DoingBusiness Measuring Business Regulations). Socialist countries do not rank high on this index either.
Yes these countries, after becoming comparatively wealthy through the free market system at the end of the 19th century and most of the 20th, did become welfare states in the 1970s. As Nima Sanandaji, the Swedish author of “Debunking Utopia: Exposing the Myth of Nordic Socialism,” wrote in 2015: “Many of the desirable features of Scandinavian societies, such as low income inequality, low levels of poverty and high levels of economic growth predated the development of the welfare state. These and other indicators began to deteriorate after the expansion of the welfare state and the increase in taxes to fund it” (Jim Geraghty, “Ten Reasons We Can’t, and Shouldn’t, Be Nordic,” National Review, March 12, 2018).
By the definition above defining socialism, it may be possible to be a welfare country without the government ownership of the means of production—the Nordic model. But if they gather the wealth through confiscatory taxes and redistribute it through gift-giving to those who had not created the wealth, how can they escape the charge of socialism?
The Scandinavian story since the late ’80s “has been a turn against socialism. Taxes have fallen and markets liberalized.” A backlash “against welfare dependency in Denmark” followed (Rich Lowry, “Sorry, Bernie—Scandinavia is no socialist paradise after all,” New York Post, Oct. 19, 2015).
In countries that already have wealth because of a free-market philosophy, a middle class spawns economic equality for all who choose to work for it. They can afford the free college, health care, welfare, etc. so long as immigration, also wanting everything for free, is very limited.
While Bernie Sanders and Elizabeth Warren are pushing America to embrace socialism, these four countries are pulling back from the free stuff philosophy.
Nima Sanandaji, observed: “In recent years, they’ve tempered the damage of their big-government policies by scaling back their welfare states and setting limits on their fiscal burdens. Their governments have adopted more work incentives, lowered taxes and allowed for more flexibility when hiring and firing workers. They’ve opened their public schools and health care to more competition, and Sweden partially privatized its pension system. They may not be free market quite yet, but they’re no socialist—or even liberal—utopia, either” (Veronique De Rugy, “Does Socialism Work for Sweden? That’s the Wrong Question,” Reason, Sept. 1, 2016).
The welfare state is not sustainable over time, in any country in any time. Inevitably it will attract immigrants who also want the free stuff without having contributed to the foundation that made this possible, as had the Scandinavians. It is impossible to have open borders and a welfare state without eventually impoverishing all. This is what all the leading Democratic presidential contenders offer in the election of 2020.
Harold Pease is a syndicated columnist and an expert on the U.S. Constitution. He taught history and political science for more than 30 years at Taft College. This column was provided by LibertyUnderFire.org.