George Reed: Left behind?
The American left, including a growing number of millennials, is engaged in an increasingly fervent romance with socialism.
Opponents on the right immediately object, citing the recently failed economies of Cuba and Venezuela as examples of socialism’s inherent unworkability.
The left then responds with the booming economies of the Scandinavian “social democracies” of Norway, Denmark, Sweden and Finland.
But that’s where all pretensions to a balanced comparison ends.
The facts are these: free-market capitalism is alive and well in Scandinavia, probably in a purer form than here in the good old U.S.A. World-class corporations such as Volvo, Ericsson Electronics, Electrolux, Equinor (oil and gas) and others head the list. But socialism? Not a chance. A more descriptive term would be responsible capitalism. And how do these nations pay for all their government-provided social services, the world’s most extensive and generous?
Corporate taxes are high, but not as high as our own before the recent reduction. But through generous write-offs, loopholes and other tax dodges — all legal, mind you — no American corporations have ever paid the former 35% maximum rate. But as a percentage of national income (GDP) Scandinavian countries pay almost double what we pay, 42%-48% compared to our low 26%. Among developed nations only Chile and Mexico pay a lower rate. But here’s a surprise. Although in all four countries the median workers’ income is higher than ours, Denmark, Norway and Sweden have no minimum wage laws. Why? I don’t have a ready answer. Maybe their economies so good they don’t need it?
When questioned about their high taxes the Scandinavians agree they are high but add “yes; but look what we get for them: guaranteed retirement income, universal health care ranked among the world’s best, job retraining after layoffs, affordable child care for working parents, paid maternity leave for both parents and free college tuition for those who qualify; no $80,000 student loan debts as a graduation present. Young peoples’ success there is not dependent on their parents’ bank account, but on their own ability and drive. Could anything be more democratic?
Although having strong teachers’ unions, most Scandinavian public schools are operated on a voucher system, an anathema to U.S. teachers’ unions. And unlike Germany where private education is rare, Scandinavian nations have some private schools, but not nearly to the extent found here. Although they vehemently deny it, most American private schools were started in reaction to racial integration in public education in the 1960s, particularly the “Christian” schools.
Back to the socialism question: Scandinavia’s economic culture can best be described as “compassionate (or realistic?) capitalism.” Although they don’t particularly like their high taxes, there are few Norwegians, Danes, Swedes or Finns applying for U.S. citizenship or Scandinavian corporations fleeing to off-shore tax havens. But could we transplant their political, economic and educational systems here and expect them to work? Hardly. What I am saying is that we have something of value to learn from these people. Globalization is here to stay. But we insist on are living in a world that used to be. To ignore this reality is not merely naïve, it’s a little stupid.
George B. Reed Jr., who lives in Rossville, can be reached by email at email@example.com.