Socialism and the Scandinavian Illusion | Opinion

Socialism has entered the mainstream of American politics, perhaps for the first time in our history. Socialists insist their model isn't the failed socialisms of the past; rather, they claim their model is the one place where socialism seems to work: Scandinavia. "I think that countries like Denmark and Sweden do very well," Sen. Bernie Sanders (I-VT) says. Rep. Alexandria Ocasio-Cortez (D-NY) has said her proposals "most closely resemble what we Norway, in Finland, in Sweden."

But what do we see in Norway, Sweden and other Nordic countries? Lars Lokke Rasmussen, former prime minister of Denmark, insists that those who associate the Scandinavian model with socialism are wrong. "Denmark," he says, "is far from a socialist planned economy. Denmark is a market economy." In line with this, here's the headline of a column by Jeffrey Dorfman in Forbes: "Sorry Bernie But Nordic Countries Are Not Socialist."

At the same time, Rasmussen and Dorfman both know that Scandinavian countries have high marginal tax rates in the 60 to 70 percent range, as well as a whole raft of social programs that largely provide for the higher education, health care and retirement of citizens. If Scandinavia is not socialist, as Dorfman claims, then the American Left has a crushing response: In that case, you will not object to importing a Scandinavian-type welfare state to this country!

We can resolve the conundrum—are the Nordic countries capitalist or socialist?—by saying they are capitalist in wealth creation, but socialist in wealth distribution. Most of these countries have low corporate tax rates, roughly in the same 20 percent range as the U.S. rate. Virtually none has a minimum wage, and companies can hire and fire employees for virtually any reason.

No Scandinavian country imposes financial transaction fees of the kind that Bernie Sanders and Sen. Elizabeth Warren (D-MA) seek to impose on Wall Street. Finland is the only Scandinavia-adjacent country to try universal basic income, which it abandoned after a brief experiment. With one exception, Norway, these countries have no wealth tax. Nor do these countries impose inheritance taxes.

In sum, Scandinavian countries are careful not to kill the goose that lays the golden eggs. Their socialism comes in sharing those eggs—this is the socialist part—but even here, we must recognize how Scandinavian socialism differs markedly from what socialists in America propose. Let's start by considering who pays for the expansive welfare state that covers the costs of college, health care and retirement.

Scandinavian countries typically impose high marginal tax rates—but as the Tax Foundation points out, those rates are not confined to the rich, but kick in at middle-class income levels. In Sweden and Denmark, if you make the equivalent of $70,000, you pay top rates, which are well over 50 percent. In America, by contrast, you have to make $400,000 to pay at the top marginal rate, which is just under 40 percent.

Moreover, Scandinavian countries also impose a value-added tax—the so-called VAT—on virtually all consumer items sold. The VAT rate is a whopping 25 percent. Economists recognize that taxes on consumer items are regressive. That means they proportionately fall more heavily on the poor and middle class, because the poor and middle class spend a higher rate of their income on consumer goods. While American socialists want to "soak the rich," Scandinavian socialists soak the whole society.

Stockholm, Sweden
Stockholm, Sweden Michel Setboun/Getty Images

There is a deeper principle at work here. Scandinavian socialism is a tribal type of socialism, not essentially different from the old Viking days, in which the booty (or kill) was shared among members of the tribe. But of course, even then it was expected that all members of the tribe would participate in the warrior expeditions. Undergirding Scandinavian socialism is the concept of shared sacrifice: Everyone benefits, but everyone is also expected to pay.

One important corollary of this principle is that Scandinavians do not demonize their rich. One rarely hears Scandinavian politicians and media figures fulminating against stock traders, or "millionaires and billionaires." This, by itself, is a startling contrast to socialists in America, who would be rendered virtually mute if they were not permitted to rage against Wall Street and the "top 1 percent."

The reason American socialists target the rich is that our conception of socialism is based on the slogan advanced by George Bernard Shaw: "Any government that robs Peter to pay Paul can always count on Paul's support." Its basic appeal is the promise of "free stuff." In Scandinavia, however, there is virtually no talk of free stuff. No one—not even the socialists—promises "free" college, "free" health care or "free" retirement. Why not? Because Scandinavians recognize that it's not free. Citizens at every income level are, through the tax system, paying for their own education, health care and retirement.

Nor do Scandinavians practice the kind of racial politics that has now become a staple part of the American Left. Scandinavian countries wouldn't dream of condoning the kind of mass rioting and looting that we have recently seen in this country. No Scandinavian politician has called for dismantling the police. Nor do Scandinavians go around calling each other racist, even though they have the whitest of white societies in every Scandinavian country except Sweden.

The Scandinavian model is a viable one, at least for certain types of homogenous societies. Can it work in a heterogeneous society like America? I doubt it. But my point is merely that it is not the model our socialist Left genuinely wants. If leftists did want that, they would celebrate capitalist wealth creation, stop demonizing whites and the rich and impose the burden of an expansive welfare state across the whole society.

They are not about to do it.

Dinesh D'Souza's bestselling book United States of Socialism is published by St. Martin's Press. His movie Trump Card will be in theaters nationwide on August 7.

The views expressed in this article are the writer's own.