The enthusiasm among the expensively under-educated first-time voters for old-time socialist Bernie Sanders, is probably stoked by his (fingers-crossed-behind-his-back) promises to give them “free” college education. Among other goodies. All absolutely free, dropping from the heavens as it were. And as he calls himself a “democratic socialist”, and tells them that Denmark, Sweden and Norway are extremely happy democratic socialist countries with perfectly sound economies – why, what could go wrong if they put him in power and he has that wonderful system do for them what it’s done for those happy Scandinavians?
Margin note: Since politicians seldom if ever fulfill their promises, and never have to pay any price for not doing so, but know that promises always garner votes, we wonder why every ambitious candidate doesn’t offer free everything-he-can-think-of. Free college education for all of course – and free iPhones and free computers. That much goes without saying. But why not also: free houses, free cars (two for a family), free month-long vacations twice yearly … ? And … mmm … what else? Free yachts? No. Perhaps that would be going too far. Might raise a little twinge of doubt. But for the slightly older voter, what do you say to guaranteed paid paternal leave of say a month? Maternal leave of say six months? And who’s for a guaranteed income of [pause to think of a fairly preposterous figure] say $100,000 per annum? You see? That guy has your vote, hasn’t he? What fools we’d be not to vote for him. And if he doesn’t take everybody in, if some pause and wonder how the funding would actually be worked (absent bounty from the lord of the universe), his pitch will have the excellent result of getting the doubters at least to start asking the questions that lead men in desperate times to Real Economics.
But to return to Bernie Sanders and “democratic socialism”. It’s not what he would have them think it is.
Ray DiLorenzo writes at Canada Free Press:
Since democratic candidates Bernie Sanders and, to a lesser degree, Hillary Clinton, point to Sweden, Denmark and Norway as models of democratic socialism, let’s examine where they are today. …
Denmark has the highest level of private debt in the world. More than half of Danes use the black market to obtain goods and services. The number of people below the poverty line has doubled in the past 10 years. Denmark’s schools, according to the OECD (Organization for Economic Cooperation and Development) lag behind even the UK’s. If you need emergency medical service, you need to make an appointment. Cancer rates are among the highest in the world and [the Danes’] use of anti-depressants is the 2nd highest on the planet. Denmark has become a quasi police state. Police are not required to display their ID numbers or give you their names. Denmark has plenty of racists, pedophiles, crooks, drug addicts, you name it … and, the trains don’t run on time. Denmark, as of late, has tilted to the right. With welfare abuse, an eroding work ethic and social order, something had to be done.
Sweden had been poor for much of the 19th century until they turned to free-market capitalism around 1870. They became rich, and, in fact, between 1870 and 1936, they had the highest growth rate in the industrialized world. By the 1960s, Sweden made a hard left turn, raising taxes, welfare payments and discouraging entrepreneurship. In 1975, Sweden was the 4th wealthiest nation on earth; by 1993, it had dropped to 14th. In Sweden, the effective tax rate, in some circumstances, had reached 100%. IKEA founder, Ingvar Kamprad, fled Sweden in 1973. Sweden came up with a scheme to confiscate corporate profits and give them to labor unions. The idea was to have a market economy without entrepreneurs and capitalists. Of course, job creation, wages and opportunity plummeted.
Until recently, Norway has resisted change to a market economy. In 1999, the former social democrat Minister of Business, Bjorn Rosengren, called Norway, “the last Soviet state”. But Norway now is gradually shifting from a full-boat welfare state to a system that rewards work and investment.
What Bernie Sanders has failed to mention, in his sales effort for democratic socialism, is that almost all European nations, including Scandinavia have seen a dramatic fall of support for socialism and now have adopted policies of free-market capitalism and individual responsibility. Sanders’ and Clinton’s idea of democratic socialism and its illusion of prosperity peaked about twenty years ago. The affluence, high levels of income equality, long life and good health, all pre-date the welfare state. Much of what Scandinavia had enjoyed is now at risk due to the welfare state, not because of it.
Generous welfare programs can stifle the work ethic, honesty, innovation and entrepreneurship of even the most ambitious among us. The Democratic Socialists, in essence, have run out of other people’s money, and ideas.