Home / economy / The Castro-Loving Kids These Days Need to Understand that the Swedish Government Doesn’t Own the Means of Production

The Castro-Loving Kids These Days Need to Understand that the Swedish Government Doesn’t Own the Means of Production


Whenever conservatives point to France to justify abortion restrictions, Scott points notes that most pro-choice types would be fine with French regulations—if they came with the French health-care system and the legal regime that makes those restrictions not terribly burdensome.

This column by Jeff Dorfman, an economist at the University of Georgia, came out about a month ago. But it recently crossed my feed, and it reminds me of conservative invocations of French abortion laws.

The myth of Nordic socialism is partially created by a confusion between socialism, meaning government exerting control or ownership of businesses, and the welfare state in the form of government-provided social safety net programs. However, the left’s embrace of socialism is not merely a case of redefining a word. Simply look at the long-running affinity of leftists with socialist dictators in Cuba, Nicaragua, and Venezuela for proof many on the left long for real socialism.

To the extent that the left wants to point to an example of successful socialism, not just generous welfare states, the Nordic countries are actually a poor case to cite. Regardless of the perception, in reality the Nordic countries practice mostly free market economics paired with high taxes exchanged for generous government entitlement programs.

This is a neat trick. “the people who, when asked what they want, point to contemporary social democracies as examples really want something else. How do I know? Here is a traditional definition of socialism; that’s obviously what they must mean. Because they call themselves “socialists.” And look at the long-running affinity of millennials for Fidel Castro and Daniel Ortega. Sure, they know the latter  primarily as a repressive, pro-business, abortion opponent. But beneath the heart of every democratic socialist is a longing for Hugo Chavez. Also, contemporary American liberals want self-regulating markets, because that’s what liberalism means.”

As in all such lines of argument, ambiguity in the phrase “the left” does an awful lot of work here. It’s not exactly a secret that most of the progressive left are social democrats and not actual socialists. There are, of course, more traditional socialists among our ranks—just as there are in Nordic countries—but we can chat once successful insurgent candidates start calling for nationalizing the means of production.

Let’s move on:

First, it is worth noting that the Nordic counties were economic successes before they built their welfare states. Those productive economies, generating good incomes for their workers, allowed the governments to raise the tax revenue needed to pay for the social benefits. It was not the government benefits that created wealth, but wealth that allowed the luxury of such generous government programs.

Which clearly means that an impoverished country like the United States cannot emulate this model.

Yes, you’d also be correct in nothing that the link to “economic successes before they built their welfare states” says no such thing. But I don’t think we need to go into the history of, say, Sweden’s very mixed economy, or its turn toward liberalization in the 1990s in order to sustain it’s welfare state.

Second, as evidence of the lack of government interference in business affairs, there is the fact that none of these countries have minimum wage laws. Unions are reasonably powerful in many industries and negotiate contracts, but the government does nothing to ensure any particular outcome from those negotiations. Workers are paid what they are worth, not based on government’s perception of what is fair.

It’s amazing what you can do with powerful unions and generous government benefits.

A third example of Nordic commitment to free markets can be found in Sweden which has complete school choice. The government provides families with vouchers for each child. These vouchers can be used to attend regular public schools, government-run charter schools, or private, for-profit schools. Clearly, the use of government funds to pay for private, for-profit schools is the opposite of socialism.

This has actually been a disaster, but take that believers in Swedetopia! I suppose.

It goes on like this for a while. And it is true that the Nordic countries generally score quite high on “economic freedom” indexes and have, in many ways, rather liberalized economies. One lesson to draw from this is the liberaltarian one: that generous welfare states provide the best way to maximize political and economic freedom. I do think, moreover, that all this should make some on the anti-trade left pause, and perhaps push them in the direction, per Erik, of thinking more about trade with progressive characteristics. Also, a fuller appreciation of what existing social democracies look like might, one hopes, attenuate left-wing criticisms of centrist Democrats for their “neoliberalism.” An additional lesson of the Nordic models, which Dorfman does not dwell on? That contemporary social democracy requires taxation that cannot be born solely by the rich.

Anyway, Dorfamn concludes:

If the left insists on naming a system of generous government benefits combined with a free market democratic socialism, I cannot stop them. That seems unnecessarily confusing since the government is actually running no industries other than education (and meddling somewhat in healthcare). It certainly isn’t socialism. In fact, the only reason most such countries can afford those benefits is that their market economies are so productive they can cover the expense of the government’s generosity. Perhaps a better name for what the Nordic countries practice would be compassionate capitalism.

To which I say, “Oh, Dr. Dorfman, don’t throw me in the compassionate-capitalism patch.”

But, somehow, I don’t think Dorfman is arguing in good faith.

It seems clear that Dorfman loves the Nordic brand of capitalism.

Still, he likes job guarantees.
If they replace all other forms of welfare.
So there’s that.

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