Democratic presidential candidate Bernie Sanders recently proclaimed that he wants America to be more like Scandinavia. For the most part, I agree with him—though not for the same reasons!
Sanders and other like-minded socialists seem to view Scandinavian countries as socialist paradises, though contrary to their centrally-planned wet dreams, Scandinavia is hardly a socialist utopia (and most actual socialists admit it).
Scandinavian countries have mixed economies that consist of both capitalist and socialist components. Specifically, their Nordic model emphasizes a robust welfare state balanced out by a liberalized free market. This economic model has allowed them to experience one of the most prosperous economies that rival the rest of the world.
Many socialists would attribute the prosperity of these counties to their big government, but if that were the case, than why have these countries been rolling back their big government socialist policies in favor of free market reforms?
Scandinavia is in the midst of an economic transformation. Thanks to tax reform, openness to investment/trade, sound property rights, little corruption, and continuing efforts to privatize, economies there have made great strides toward liberalization. Denmark, Finland, Iceland, and Sweden have been rated “free” economies by the Heritage Foundation’s 2006 Index of Economic Freedom (online at www.heritage.org/research/features/index/countries.cfm). Norway lags behind with a “mostly free” rating.These countries have already learned the hard way that, as Margret Thatcher once pontificated, socialism works well until you eventually run out of other people’s money, and as such, they are now rolling back their socialist policies in favor of market liberalization and privatization.
Scandinavian countries have low corporate tax rates and transparent procedures to establish a business. Moreover, these countries have implemented numerous reforms over the past couple years. For instance, cutting income taxes has become one of Iceland ‘s crowning economic achievements. Denmark has been ranked by the Economist Intelligence Unit (EIU) as having the best business environment thanks to, among other things, its flexible labor market....
These countries still have much room for improvement despite the strides that they have made toward liberalization. Scandinavian countries have a good deal to offer, yet their reluctance to radically reform the welfare system makes them their own worst enemy. According to Stephen Brugger, executive director at the American Chamber of Commerce in Denmark , it is impossible to maintain things the way they are while expecting different results:
In other words you can’t retain all of the safety mechanisms of the existing social welfare system and simultaneously grow a competitive, innovative and entrepreneurial economy.
However, as I said before, I agree with Sanders that America should be more like Scandinavia—in that we learn from their mistake and favor free markets over big government.
I’ve previously highlighted on this blog many “libertarian” policies that Scandinavian countries have successfully implemented to their benefit, specifically low corporate tax rates, education vouchers, and the rejection of minimum wage laws. If America truly wishes to emulate Scandinavia, it should be with these policies.
Of course, if Sanders is in need of a real example of socialism, he can always look towards the socialist utopia that is Venezuela. Socialism there has been working very well—to have the country run out of food and toilet paper!