The US is Just as Socialist as Scandinavian Countries – Here’s Why

The famous argument of every leftie that there’s no country that has experienced full-blown capitalism is actually true and we have to give those people credit. Everywhere you look, every country you examine, the chances are that it will have a certain degree of government intervention in the economy that curbs the ultimate growth rate of its GDP.

Sure, some countries are more socialist in that matter than others but can we make the same claims about them that we did, say, 20 years ago? The same left-leaning activists we quoted above also use the region of Scandinavia to prove their point, which is: the balanced socialism, the so-called democratic socialism, actually works and  Scandinavia is the perfect example of that.

On the other hand, many freedom-loving fellows also use Scandinavia as some sort of loathsome example to scorn the interventionist policies of a government and hint to its inefficiency. They often compare these countries to the US and make a case that the latter is far freer in this sense, leading to a higher prosperity level. But is that really true? Let’s find out!

The mixed economy in Scandinavian countries

One thing we need to mention straight away is that we’re not making the case of Scandinavia being a capitalist region; it most definitely is not. The taxes on income, wealth, capital gain, and other sources reach insurmountable levels in Sweden, Norway, and the rest of the countries.

Not only that, but the government also has lots of overwhelming restrictions on many industries. Just the example of gambling in Norway is enough to prove our point. In general, the majority of countries worldwide have a hard time leaving this industry alone – without the over-the-top regulations. They feel the urge to restrict not only their citizens and their ability to play, but also the casino providers and their freedom to deliver these entertaining games.

Sure, online gambling is perfectly legal in Norway, allowing its citizens to head over to Spinia Norway online casino and enjoy their favorite online games, it’s still very much a burden to establish your own casino. establishing your own casino can be quite burdensome.

The Norwegian government controls the whole gambling industry. There are two centralized institutions that monitor every single provider and entice them to register their business under their license. In short, the government is in charge of many industries.

Then there are overwhelming social policies that take up the majority of public expenses. Whether we’re talking about universal health care, social safety net, or free education, the government intervenes in the economy to a massive scale and limits the private sector to operate freely in them.

The speck of freedom

Having said that, we also need to note that the Scandinavian economies are still market-oriented and allow things that are virtually unacceptable for even democratic socialism.

In all Scandinavian countries, production and their means are still owned by private entities – or, at least, the majority of it. Not only that, goods and services produced in these countries are still distributed by the market forces of supply and demand, not a benevolent government or social community.

And as far as education is concerned, while the Swedish government still uses taxpayers’ money to fund education for all Swedes, the actual layout of the educational system takes after the system developed in a capitalist country. Here’s what this means:

Parents can use vouchers provided by local governments to fund the education of their children. However, the main difference between the interventionist government and the Scandinavian government is that the former doesn’t allow parents to choose the school themselves. In Scandinavia, there’s a greater school choice and parents are allowed to take their children in private schools as well.

In fact, this policy of a universal school choice system was adopted in Sweden in the 1990s and closely resembles the system proposed by libertarian economists. This, in retrospect, proved much more effective than the centralized educational policy, increasing the overall performance of Swedish students.

Comparing to the US

Now the interesting part. When we compare the Scandinavian countries to the United States – the “Valhalla” of freedom for many capitalists, we find many interesting aspects of their economies. For example, while the tax rates are still very high in Scandinavia, the progressive taxes on income, wealth, and others in the US are also quite egregious for the standards of any libertarian.

Not only that, but we have also mentioned earlier that the educational system in Sweden still allows parents to choose a school that is closer to their preferences, which is completely absent in the US.

Then there’s the level of centralization in these countries. On the one hand, we have Scandinavian countries that have succeeded in delegating the power to the local governments and other entities. One example of this is how the minimum wage is determined.

In Denmark, Norway, and Sweden, the central government doesn’t impose any minimum-floor on the wages. Instead, the local labor unions and employers continuously negotiate on the salaries and determine their specific minimum wages. In the US, on the other hand, everything is done by the Federal government, including the imposition of the minimum wage rates.

A journey to the mixed economy

Finally, let’s talk about how the Scandinavian countries got their name of the socialist Valhalla and coined the term “Nordic Model”. I’ll take the example of Sweden. Before the 1960s, the time when the country decided to move towards interventionist policies, Sweden was one of the wealthiest and fastest-growing economies in the world.

From the 1870s all the way to the 1950s, Sweden was the first country in terms of per capita income growth and was the fourth-richest country, only to be surpassed by Switzerland, the US, and Denmark.

This quickly changed once the country decided to follow the hype in the 1960s about the wealth redistribution, high taxes, and massive social policies. In retrospect, this left a huge mark on the Swedish economy, curbing its growth and leading it to lots of problems. Therefore, the Swedish government was forced to lessen the interventionist policies in 1994, implementing some of the liberal policies, including fewer regulations, less government spending, smaller government, etc.

Today, we’re seeing the effects of that same policy: Sweden, and all Scandinavian countries, is one of the most successful countries. But not because it’s socialist, but because it managed to accumulate wealth in the past which then allowed the country to bear the burden of a big government.