Stockholm, Sweden. By Oleksiy Mark @ Shutterstock.com
When Cynthia Nixon was running for governor of New York last year, she was asked in an interview her views on being a socialist. The flustered Ms. Nixon hesitating replied, “I am more in … I am more in line with the Nordic model myself.”
But as Adam O’Neal notes in the WSJ, faced with alternatives like Cuba, China and Venezuela, who isn’t “more in line” with Sweden, the classic Nordic example?
Trouble is, most Swedes aren’t in line with American socialists like Ms. Nixon, Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez. “All of their models that they could point to, given a couple of years, they end up in famine and killing,” Swedish author and historian Johan Norberg tells me. “So they always come back to Scandinavia in the end.” True, Sweden has a significant welfare state, but Mr. Norberg says it’s underpinned by “ruthless capitalism.”
Sweden was one of the world’s fastest-growing economies for nearly a century. But by the 1960s, the country began to take its wealth-creating prowess for granted. I tell Mr. Norberg about New York Mayor Bill de Blasio ’s assertion: “There’s plenty of money in this world, it’s just in the wrong hands.” In 1960s Sweden, Mr. Norberg replies, “that’s almost verbatim what they said back then: ‘Now we’re this rich. Shouldn’t we just distribute it, and give it to the people and the places we like?’ ” Such thinking overtook the country’s dominant center-left Social Democratic Party.
Sweden’s Dirty Little Secret
American leftists, even those who shy away from the “socialist” label, generally call for higher taxes on “the rich” to support an expanded welfare and entitlement state. That, too, misapprehends the Swedish example. “We have much higher taxes on the poor and the middle classes than you do,” Mr. Norberg says. “And this is the dirty little secret that no one in the American left wants to talk about.” Nonprogressive taxes on consumption, social security and payroll are 27% of Swedish gross domestic product, 16 points higher than in the U.S.
Free Market Lessons from Sweden
Mr. Norberg does think his country has lessons for America—but they’re free-market ones. Whereas U.S. entitlement spending is on a path of uncontrollable growth, “our politicians basically said, from the left to the right, this is not sustainable. Our social-security system will collapse if we don’t reform it,” he says. Americans who talk up the Swedish model “would have to reform social security, and change it from defined benefits to defined contributions. And reduce social-security pension payments when the economy is doing worse.”
If Sweden fails as a socialist model, what about its Scandinavian neighbors? “Denmark is far from a socialist planned economy,” then-Prime Minister Lars Løkke Rasmussen said in response to unwelcome praise from Mr. Sanders in 2015.
Finland, God Bless, not a Socialist Country
“Denmark is a market economy.” Not long after lunch with Mr. Norberg, I asked Finnish President Sauli Niinistö if he leads a socialist country. His answer: “No, God bless.” Norway is similar, and a major producer of fossil fuels to boot.
Mr. O’Neal is an editorial page writer for the WSJ.
Mr. Norberg is a Senior Fellow at the Cato Institute.
Read more here.
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