The Fiction of ‘Scandinavian Socialism’

The left has been attempting to impose the “virtues” of “Scandinavian Socialism” on America for years, most recently in the guise of “democratic” socialism.

Progressives are obsessed with “income inequality,” an “unfair” condition which they insist must be “cured” by reworking America’s social welfare policies, indeed by imposing a national socialist system of government – “democratic,” of course.

Vermont Senator Bernie Sanders, an avowed socialist, failed to win the 2016 or 2020 Democratic presidential nominations, but his campaigns mobilized thousands of progressive activists who share his desire to make America a Nordic-style welfare state. In an October, 2015, Democrat primary debate, Sanders said, “[W]e should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people.”

Sanders-style socialism was not limited to his campaign. In 2016 Ezra Klein, editor of the liberal website Vox, wrote, approvingly, “[Hillary] Clinton and Sanders both want to make America look a lot more like Denmark.”

“Tax the wealthy,” “soak the rich,” or “make the top 1% pay their fair share” are common mantras of the socialist left.

It may be true that U.S. income tax rates are lower than most European tax rates, but America’s tax system is far more progressive than every European country. In fact, “income inequality” in America drops considerably once all income transfers and other social welfare spending are taken into account – a fact most leftists leave out of their “income inequality” calculations.

What the left doesn’t know or ignores is that an analysis of the net redistribution of income/assets among industrialized nations from the top 10 percent of earners to the bottom 50 percent of their populations reveals that America leads every European nation by a significant margin. Norway is third behind the U.S. and the United Kingdom, Sweden is tenth, Denmark eleventh, and Finland is twelfth.

The net percentage of taxes taken from the top 10 percent of American earners far exceeds those taken from the top 10 percent of every European nation, again by a significant margin. Norway is third, Sweden ninth, Finland twelfth, and Denmark drops to twentieth.

Ironically, like its Nordic neighbors, Sweden is not a socialist nation. Sweden is a capitalist nation that, before an influx of unassimilated migrants, could only afford generous social benefits by embracing capitalist policies that America’s democratic socialists reject: a free economy, private property rights, deregulation, privatization of failed state enterprises, open education markets, and, more recently, welfare reform.

Everyone in Sweden’s representative democracy, including the poor and middle class, pays huge tax rates to fund social programs; everybody, including needy Swedes, pays a highly-regressive 25 percent value-added consumption tax, a bit lower on certain necessities; but, favoring wealthy landowners, Sweden doesn’t tax property.

America’s high top marginal tax rates and net redistribution of assets has a number of practical shortcomings.

Moving onto a higher bracket can limit top earners’ incentives to seek higher pay, and transfers to the bottom 50 percent of earners, or, in many (most?) cases, unemployed Americans, lowers the incentives of many recipients to pay attention in school, work or acquire the skills that have the chance to narrow income inequality.

When an assisting hand-up turned into, essentially, strings-free handouts, public welfare became a “career choice.” Government-administered income redistribution created a permanent American underclass of multi-generational welfare recipients, many having little or no sense of responsibility, independence, motivation, or gratitude.

In the aggregate, the resulting loss of human potential is a national disaster.

Cleary, America already is a welfare state on a scale unimaginable – and unsustainable – in every Nordic nation. It is unsustainable here, too.

Furthermore, “Democratic socialism” is oxymoronic, because the “democratic” part never survives. Altruistic Americans should learn the facts of socialism’s unblemished history of empowering and enriching regime insiders while institutionalizing repression and human suffering for everyone else.

Socialist despots in 20th Century Germany, Russia, China, North Korea, Cuba, Iran, Central/South America and today’s Venezuela promised socialist paradises. Instead, their common denominator was/is coercive totalitarianism. Cumulatively, socialism’s body count far exceeds 100 million souls.

Americans, especially disaffected youngsters, must be taught the essential truth that socialism in any form is soulless and repressive, that free market capitalism, a system from which everyone has a chance to benefit, was developed by and for entrepreneurial outsiders – and for willing, self-reliant workers.

https://www.pottsmerc.com/2023/04/03/jerry-shenk-the-fiction-of-scandinavian-socialism/