Many Americans, especially millennials and progressives, believe Scandinavian countries, particularly Sweden, are veritable socialist Utopias. Bernie Sanders and Hillary Clinton said so during the last election and were unchallenged by the equally clueless media. Whenever I discuss politics or economics with liberal interlocutors, they invariably cite Sweden as proof that socialism works. They are wrong on all counts; Sweden is neither socialist nor especially wealthy. Let’s look at some history.
Sweden once was so dirt poor it sent waves of immigrants to America. Circa 1875 Swedes embraced free market capitalism and began to prosper. Around 1970, Sweden took a hard left turn; taxes soared, welfare expanded and private enterprise was discouraged. The predictable result was rampant crime and drug addiction, Kafkaesque bureaucracy, welfare dependency and emigration by successful Swedes. By the 1990s Swedes saw socialism as a colossal failure; they cut taxes, restored free markets and economic freedom; they replaced leftist governments with right-leaning ones.
The stories of the other Scandinavian countries (Norway, Denmark, Finland) are similar. Today, all four enjoy dynamic market economies albeit with robust social insurance programs financed by high middle class taxes. They can afford such benefits only because of successful capitalist economies that produce sufficient wealth. No socialist economy has ever generated enough wealth to fund such benefits. Sweden is not prosperous because of socialism; it is prosperous because it survived socialism.
Note: The Scandinavian model of social insurance can only work in small, homogeneous populations with deeply shared and ingrained values, social and cultural cohesion and a middle class (there never are enough rich) willing to accept extraordinarily high tax rates.
Americans incorrectly believe Scandinavian countries are wealthy; however, they compare very unfavorably to the US. The GDP of Houston, Texas is larger than all of Sweden. If Sweden were a US state it would rank among the very poorest in per capita GDP. Moreover, Sweden is 30% more expensive. This means that when considering both purchasing power and GDP, Sweden would be the poorest US state – by far.
With the lie of Scandinavian socialism outed, consider if communism, socialism or any collectivist economy ever has produced sustained prosperity. The short answer is never. Socialism may produce short-term gains by nationalizing property, debasing currency, seizing assets and borrowing. This is akin to mortgaging your home, selling your patrimony and stealing your neighbors’ property – all to finance a gigantic party. But the party always ends when the other people’s money runs out.
Examples of communism/socialism are Cuba, USSR, North Korea and Venezuela. Their horrors are obvious except to diehard progressives. These are the places to observe the reality of destructive collectivist schemes. Liberals and their media running dogs falsely cite Sweden and Scandinavia as socialist success stories when, in fact, they are socialist failures and capitalist successes. It is all a big lie as indeed all of collectivism is a big lie. Commies promise you Sweden but they give you Venezuela!
Red October continues next week with a healthy dose of commie humor.