In the recent Democratic Party debate Bernie Sanders told us we should look to Sweden, Denmark and Norway to see how a successful democratic socialist economic system works.  I have heard others say the same thing.  Even some conservatives have argued that socialism of the democratic kind works pretty well in those Scandinavian countries.  Rich Lowry, in an article in National Review Online, dated October 20, 2015, says “Not so fast.”  And he has some data to back up his admonition.  But first, just a bit of background.

Democratic Socialism is a name for a variant of socialism.  It arose with the work of Eduard Bernstein, a German follower of Karl Marx who noticed that the prediction s of the master about lower wages, higher unemployment and general misery were not coming to pass in late nineteenth century Europe.  Bernstein was groomed as Marx’s and Engel’s successor, but broke with the party and was demonized by Lenin in the early twentieth century.  But Bernstein’s “child” lived on an came to dominate most Western European nations, especially after World war Two.  The goals of Democratic Socialism are the same as Marx’s Scientific Socialism, but the means were different, peaceful, incremental and democratic.  And the Scandinavian nations are indeed peaceful and democratic.  Bernstein also believed that when the final communist “utopia” arrived, the economic system would be like Marx envisioned. But in the interim period while waiting for the final stage, the economy would be managed/planned and welfare services would be extensive, as they are (or were) in Scandinavian nations.

Lowry says that the Sweden, for example, that Bernie Sanders extols is not the Sweden of today, but that of previous years, and that in fact those nations are moving away from their welfarist mentality precisely because it has not worked.  Of course they haven’t moved all the way to free markets, but they have come some way.  Lowry provides some history and some telling examples.  He cites a Swedish analyst Nima Sanandaji, who has studied Sweden’s past and present.

The first thing Sanandaji mentions is fairly obvious but which has important implications. Swedes are Swedish, and Swedish people have a very long history of solidarity and commonality.  They are also historically known as hard workers, as attested by their flourishing here in America in the nineteenth century in sometimes harsh conditions.  Descendants of Swedish immigrants in the United States have 20% higher average incomes than the average and a poverty rate 50% lower.  The Swedes also have high levels of trust.  All this translates into a condition of relative equality among its people and high life expectancies—before the welfare statism came on the political scene.

But in addition, historically, Sweden was not a Social Democracy.  In the early nineteenth century, emerging from poverty, Sweden embraced free markets and low taxes and prospered as a true success story.  This lasted until World war Two.  Only after the war did Sweden adopt Social Democracy.  In the 1970s, the effective marginal tax rate was over (yes, over) 100%.  Literally all profits over a certain level were “confiscated.”  Business did not boom, people did not flourish.  They did live in equality, but an equality of relative mediocrity.  By the way the profits were given to labor unions—interesting (I am sure Bernie Sanders would like that).  The idea was to “to have ‘a market economy without individual capitalists and entrepreneurs.’” (NRO)  Quite a concept.

In the 1990s, people began to realize that socialism was not going to be the “goose that lays the golden egg.”  And the nation started lowering taxes and liberalizing the economy.  Good things have happened, though not as good as they would be if Sweden once again embraced true free markets.

Just to put an exclamation mark on this shift, I note that in the Heritage Foundation’s 2014 Index of Economic Freedom, Denmark ranks 11^th, one spot above the United States.   That is progress.  And the progress is for all, not just for a few.  Bernie Sanders continually attacks the so-called problem of inequality, but fails to understand two things: (1) one can have economic equality of outcome but at the expense of flourishing for all, even those at the top (unless they are cashing in on cronyism) and (2) one can have inequality without making anyone worse off, rather by making most everyone better off because of the sheer increase in economic productivity.  Social Democracy, like the Marxist socialism before it, advocated by Marx, Engels, Lenin and Stalin (in a more vicious form) is woefully backward looking.  While the Left may embrace it, I hope those of a more conservative persuasion will not.

A quick word for Christians who think about such economic issues.  First, Acts 2 and 4 do not teach any form of socialism.  I have written on this before, as have others, so I assume we all agree on that.  But second, even if we can agree with Social Democrats that our goals are human flourishing and the possible elimination of poverty, we must think clearly about how we would or should achieve those goals.