Scandinavia is not a socialist triumph

Sorry, socialists; Scandinavian success isn’t your trump card.

While Scandinavia has emerged as one of the world’s leaders in terms of how to run an economy, many advocates of socialism claim that its success is down to large numbers of socialist economic principles. This fanciful perception could not be any more untrue; in fact, the Scandinavian countries extol the virtues of the capitalist economic ideology more than anything else. The fact that even figures such as Senator Bernie Sanders, who claimed that America should look to countries “like Denmark, like Sweden and Norway” for their purported socialist beliefs, believe this woeful and misguided claim, comes as a shocking challenge to the belief that socialism in itself cannot bring about economic prosperity. In theory, this is all well and good: differing ideas are needed to promote healthy, beneficial economic debate which allows countries to further develop. Despite this, when one side of the argument persists with making claims that are inherently flawed and against basic facts and statistics, the debate becomes much less healthy than toxic and useless, and this intuitively benefits no one. Hence, while it could be argued that Scandinavia has some socialist principles that have helped it grow economically, it is completely asinine to brand the whole region with the “socialist” moniker. Frankly, it’s akin to saying that socialism alone works in the first place.

Free market capitalism is perhaps most strongly enforced in the countries which Sanders seems to so idolise. While it is disputed whether laissez-faire economics works in the long term or not, it is a testament to these countries’ resilience and principles that they do not intervene and let large companies go bankrupt if they are not performing or have mismanaged their finances. For example, Sweden allowed Saab, an automobile manufacturer, to go bankrupt, even when there was considerable pressure to bail the company out. Many similar occurrences have taken place with the other Scandinavian nations, affirming the ethos of economic competition that these nations hold so dear. This competition, that is so prevalent in these societies, allows companies to make more and more efforts to innovate and gain a comparative advantage over their rivals, thus increasing the prosperity of these companies, which gives the state more income through taxation with which to fund social services such as healthcare and education. This also results in a reduction in unemployment, again increasing the wellbeing and happiness of the country’s citizens. It stands to reason, therefore, that Denmark is the world’s happiest country. And a large proportion of this has nothing to do with socialism.

The reason why countries such as Sweden have evolved into such developed and financially stable economies is also due to capitalist ethos, and most definitively not socialist ones. In the latter half of the 1800s and the early 1900s, Sweden was floundering financially, with it being very poor and economically destitute (1.3 million Swedes left Sweden for America during this time). The capitalist reforms which were then instituted by the Swedish government spurred economic development and growth, incentivising creativity and encouraging investment into small and medium sized enterprises (SMEs). At this point, the country’s taxes were far lower than the majority of Europe’s, raising serious questions to socialists who propose higher levels of taxation. Therefore, despite the fact that the welfare system in Sweden is amongst the best applications of socialism in the modern world, this is only a small cog in the wheel; and to a large degree, has only been made possible through the wonders of capitalist reform that swept the country. After all, the system could have only been financed through money, money which would have been in high relative scarcity had Sweden continued the way it was going.

Scandinavia has also been made into a pseudo-utopia by some socialists, a place where everything is perfect and nothing has ever gone wrong. However, while the region is a massive success story, it is not as prosperous as some would claim it to be. For example, the United States has a higher economic output per person than Sweden, Denmark and Finland, calling into doubt those who claim that the few socialist policies have resulted in an increase in productivity in the Scandinavian region. Moreover, the Organisation for Economic Co-Operation and Development (OECD) also states that the average Dane has an average household debt equal to 310% of his or her disposable income, again making the claim that Scandinavians are more financially prosperous than others seem highly dubious. According to Credit Suisse’s Global Wealth Report of 2014, the wealthiest 10% of people in Norway, Sweden and Denmark possess between 65 and 69% of the wealth of those countries, displaying staggering levels of wealth inequality. While low inequality is frequently espoused by proponents of the socialist economic system as a virtue of Scandinavia, these figures prove that that is not the case, and that, like much of the Western world, Scandinavia also has serious problems regarding wealth inequality.

We do have our share of problems, I admit. Scandinavia is a great place to live, I admit. What I don’t admit, however, is that they’re perfect or that socialist policies have got them to where they are thus far; it’s, in fact, capitalism that has again, saved the day.

Shrey Srivastava, 15

28 Comments Add yours

  1. Brolga says:

    Agreed that the Nordic model is free market but still a lot of socialist policies that have helped the countries in a variety of economic areas, the education system for one which an area where the US is clearly behind.

    Liked by 1 person

    1. I agree with regards to the fact that some socialist policies have helped these countries, but in fact when you look at the data the US is in fact better than these countries with regards to education in reading and maths.

      Like

  2. hobbyie says:

    That’s too much cold for me socialist or capitalist 🙂

    Like

  3. Christine Jones (Carter) says:

    Kind of explains why neo-liberals think socialism is a bad thing – they think it isn’t about business sense, being occasionally ruthless and letting a big business fail. The Dutch are ruthless business people too. But they also understand that health care for all, safe streets, social help for vulnerable people and an education system where there’s almost no such thing as private schools keeps the prison population down, makes for a great place to live without needing to carry a gun, or hide in a car with the doors locked. Socialism is the wrong word anyway, and it isn’t communism or marxism either, it’s a coalition of fair minded people running a country where everyone who pays tax (don’t forget even everything you buy and use is taxed, not just your income) gets to smell some flowers, so that not just the CEO’s and their golf buddies are the only ones that go places, you numpty! It’s not about giving away being the best, it’s about kindness. It’s about not seeing another’s failure as your triumph. It could save the world, but it probably won’t because some mathematical geniuses out there don’t understand that not everyone can be better than average.

    Liked by 2 people

  4. TSS says:

    Reblogged this on TSS.

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  5. TSS says:

    Excellent article as always, Shrey. I appreciate that you always take a bit different angle from the norm. I shared this article on The Systems Scientist.

    Like

    1. Thank you so much 🙂

      Like

  6. Why do people (read: politicians) have a hard time accepting that a capitalist productive model and a socialist redistribution of wealth could co-exist and that people could benefit from such co-existence?

    Liked by 2 people

  7. Robin Stanley Taylor says:

    I think that the exaggerated reputation of the Nordic states may derive from the tendency on the American right to use “socialism” as a pejorative term for dissenting viewpoints in an attempt to liken their opponents to the architects of the Soviet Union. You can find many assertions across the internet that Obama (perhaps called Osama/Obummer/Oblammo instead) is a socialist, when in reality his economic policies would be seen as distinctly right wing from a European perspective. Scandinavia, therefore, is naturally going to be described as one step away from the new Soviet Union.

    Conversely, this state of affairs leads the “progressive” types on the left to worship what they see as a liberal utopian paradise – because if the GOP hate it of course it must be great! Both sides make it sound like the anti-West, which is the epitome of good for the left and the epitome of evil for the right. It is not in either’s interest to acknowledge that the Nordic states aren’t that different after all.

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  8. Dove says:

    The Nordic Model is not a socialist framework. It is a combination of free market forces with some regulatory policies – pretty much a Mixed Economy.
    Very well written, Shrey! Keep going .

    Like

    1. Thank you so much 🙂

      Liked by 1 person

      1. Dove says:

        You are welcome 🙂

        Like

  9. Scottie says:

    Hello Shrey. I love your posts, most are over my head but I love the work you put into them. I did have one problem with this post though. The statement ” It stands to reason, therefore, that Denmark is the world’s happiest country. And absolutely none of this is due to socialism.” I find to be a bit of a stretch. The fact is some social policies such as healthcare , education, social safety net programs, and other socialist policies also add to the happiness of the people. I think it goes back to the old saying… All things in moderation…Any system take to extreme will fail and bring hardship and unhappiness. It is a balance of socialist programs and capitalist earnings that make a good place for healthy and happy populous. Well that is my opinion only. Be well and happy. I see you have had a birthday since I was here last. Congratulations. Hugs

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    1. Thanks Scottie! I appreciate your comments and greatly admire you as a gay man in a country where Trump is poised to become the next President. You know what, you’re absolutely right about what I said, it was perhaps too extreme, changing it now 🙂

      Liked by 1 person

  10. AnjaliB says:

    Good article Shrey! I agree with you. I recommend also to watch the following ted talk. It is by a Norwegian socialogist and comedian. https://m.youtube.com/watch?v=A9UmdY0E8hU

    Like

    1. Thank you! 🙂 I noticed you got your own account. Are you thinking of starting a blog? I would definitely read it. 🙂

      Like

  11. Very well written my friend. I’m impressed with your knowledge at only 16. I appreciate your comment you left for me over at http://www.thevintagegentlemen.com

    Keep up the good work and I look forward to reading more of your articles!

    Like

    1. Thank you so much 🙂

      Liked by 1 person

  12. Jerome Kuseh says:

    I am impressed by this level of knowledge. Outstanding for a 16 year old.

    However, your argument suffers from a fallacy of equivocation in the use of the word “socialist”. A sound argument would require that the word socialist as used in the US sense means same as it is used in Europe and other parts of the world.

    Bernie Sanders is a social democrat – a moderate leftist by European standards but a socialist by American standards. The Nordic countries are social democratic mixed economies by standards outside the US but their generous welfare policies, high tax rates and collective bargaining would qualify them as socialist by US standards.

    So social democracy (the US idea of a socialist and what Sanders supports) has actually worked for the Nordic countries. Socialism as known outside the USA i.e. central planning and state ownership of the means of production is another discussion altogether.

    Keep writing

    Like

    1. Thanks for the comment! 🙂 So I know that the Nordic countries have social democrat governments, however an argument purported by many socialists is that the success of Scandinavia is somehow the success of socialism as a whole, something which I was trying to debunk. Thanks again for the comment! 🙂

      Like

  13. sarahbruso says:

    Your comment about the assumption that socialism works by itself piqued my interest because it reminded me of North Korea. While staunch leftists will argue that there’s not even a hint of private markets in North Korea, most scholars I’ve read suggest “underground capitalism” is very much alive in the DPRK, and it’s helping the country’s people stay afloat during difficult financial times.

    Like

  14. ken011001 says:

    Actually in my sense, nowadays there is no pure socialistic economy. They are all kind of mix (even DPRK has special economic zone that not totally planned by the government.
    Economically speaking, both the extreme conditions can not be the optimal. Extreme socialist requires the government knows everything (then it would be the “God”) and purely maximizing the total welfare, while extreme capitalist requires the economy has no market failure (First Welfare Theorem holds), e.g. no negative externalities. Both are not possible in real life.
    So it’s better to say the Scandinavian as capitalist have also taken the advantage of being socialist.

    Like

  15. fintaann says:

    Really interesting

    Like

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