Written by: Jay Mahn

Nordic countries exemplify the built-in failures of Socialism:

The Nordic countries (or Nordics), consist of Denmark, Finland, Iceland, Sweden and Norway, as well as the Faroe Islands, Greenland and the Aland Islands. The Nordics are a culturally and politically similar group of parliamentary democracies located in Northern Europe. They are often championed by the left as examples of how well socialism could work if the Scandinavian model is implemented.

However, these are the same people that believe in a Utopian version of the world where there are ‘solutions’. Anyone without a warped sense of reality understands that there are no solutions, there are only trade-offs.

Socialism has never worked, and will never work – period. It is an immoral system placing social justice above individual justice. It is a system that relies on liberties being surrendered to the state and forces people, against their will, to contribute to the collective, completely dismissing self-determination and personal responsibility and, in the process, increasing negative social consequences.

There is no other ‘go-to’, for advocates of socialism, other than the Nordics. Without the Nordics, their argument collapses. But are they really a socialist success story?

It is true that the Nordics are prosperous with greater equality, low levels of poverty and long life spans, but these desirable characteristics are a result of the Scandinavian culture, not socialism. If these characteristics were a result of the welfare state, prior to the welfare state, they would be lower.

Nordic countries’ prosperity predates the welfare state, and actually declines when large welfare policies are implemented. The Scandinavian people have a culture of hard work, individual responsibility and living healthier lifestyles(e.g. Hiking, eating fish, low alcohol consumption) which creates their success. It is true that the average lifespan of the Nordics is 1.5 years higher than the US, however, during the 60s (prior to large welfare policies being implemented) it was 2.4 years higher.

The Nordic culture is founded on working hard and taking responsibility. The welfare state, since it has been implemented, has gradually been destroying that culture. An example of this culture is being destroyed is evident when comparing Nordic people living in the US to their cousins living in the Nordic countries. There are about 12 million Nordic people living in the US, more than any population of any individual Nordic country. The Nordic American population’s forefathers were the poor and starving, so they left for America. Because their forefathers were poor, they should at the very least be poorer than their cousins living in Scandinavia, but this is not the case. What you find is that Nordic Americans are 50% more affluent because they are not living in the social democracy that is the Nordic countries. Nordic Americans have better social outcomes, almost half the unemployment rate, much lower high school dropout rates and they have much lower poverty levels. Also indicating that high taxes and big government (in the Nordics) reduces prosperity, as their cultures are the same, with different results.

These examples indicate that it is not socialism working in the Nordic countries, but rather the culture. The combination of their culture and freer markets, lower taxes etc. in the US increases prosperity among Nordic Americans when compared to their cousins living in the Nordics.

(The author of “Debunking Utopia: Exposing the Myth of Nordic Socialism” does argue that welfare isn’t necessarily a bad thing when it is associated with small government – systems where there are low taxes and those taxes support basic education and basic healthcare, not the current system which traps families in welfare dependency.)

The advocates who use the Nordic countries are right about the successes of the Nordic countries but attribute this success to welfare and completely dismiss the culture of those people. The social success of the Nordics all predates the welfare state – high lifestyle, the low child mortality, low poverty. So to argue that those social successes are a result of the welfare state is to cite a result before the supposed cause. (Another reason social outcomes are becoming less favourable, is the increasing amounts of immigrants in some Nordic countries, who do not possess the culture necessary for success, becoming trapped in welfare dependency at the expense of the productive, contributing members of the society.)

The Nordic people are not oblivious to the negative impacts of the welfare state and for the past 2 decades have been turning away from democratic socialism by introducing market reform, lowering the generosities of the welfare state, lowering taxes and moving towards greater individual freedom and a more market based economy. There are 5 (prominent) Nordic countries, 4 of which have centre-right governments which are doing market reform. (Only Sweden has a social democratic government and Sweden has never, in modern times, been as weak as they are today. Even their socialist government is doing market reform.)

To use Sweden as an example, prior to the first socialist democratic government, Sweden had the highest growth rate out of all countries in Europe. From the late 19th century until about 1970, they were very much pro markets, economic freedom, and minimal government involvement. Sweden’s socialist government from 1970 to 1991 attempted socialism and it failed dismally. Sweden recorded the lowest growth rate in Western Europe, and post 1991 introduced market reform, tax cuts, welfare cuts, which resulted in massive growth allowing them to have the second highest growth rate in Europe, with only the UK being higher during this period. Prosperity grows during economic freedom and is hurt when moving away from this freedom.

When looking at Denmark as an example: they have very high taxes, but Denmark has the same economic freedom score as the US. Why? In every other field they are very much pro market, pro-business, ranked as one of the best countries to do business in, because they have very strong protection of private property rights. Some examples are: they have more free market regulations, partial privatization of the pension system, voucher system, private companies carry out most of the welfare in school, healthcare and elderly care. The Danish Prime Minister, Lars Løkke Rasmussen, was tired of people referring to Denmark as a socialist country and stated the following: “I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”

The mix of the culture of the Nordics and freer markets has been proven to create prosperity in the Nordics and when they shy away from free markets, negative social consequences result and growth slows down.

Nordics are extremely homogeneous countries, while countries such as SA or USA are multicultural with culturally diverse societies. Therefore, comparing income mobility in multicultural societies(different cultures) is like comparing apples and oranges. You need to look at income mobility of people in the same cultures.

The real question that needs to be asked is: “Has socialism ever worked (or in this case, appeared to have worked) in any other culture that is not Nordic?” No.

Part 2 – References
Nima Sanandaji, Debunking Utopia: Exposing the Myth of Nordic Socialism, WND Books, Washington, DC

  • Alex J Nagel

    “Another reason social outcomes are becoming less favourable, is the increasing amounts of immigrants in some Nordic countries, who do not possess the culture necessary for success” is this not the same reason then that those who emmigrated to USA and their offspring now live there are wealthier, is a result of mingling with another culture?

    • I would suggest that the reason that immigration into Scandinavian states is damaging, when it is beneficial in the USA, is because the Nordic model places the state as the main source of survival and wealth. The problem with state-accumulation is that there is no real incentive. So people fabricate incentives. They use fear, they make up stuff about honour and they fabricate an imagined community based on ethnicity. When someone not of that ethnicity shows up, it breaks the model.

      In the USA, the main source of wealth was entrepreneurship and thrift. As such, immigrants had to work hard – and did. In Scandinavia, they do not, so rather just disrupt the country’s imagined community.

    • Be Smith

      The mix of the Nordic culture and US freer markets allowed for the Nordic Americans to become more prosperous than their cousins living in the Nordic countries under a socialist democracy.

  • More an example of the failure of high government spending. These countries are not really socialist (the means of production is privately owned) – but they have unsustainable levels of government spending on their Welfare States (the “Social Justice” stuff). Very much like New York State or California.

    • Yeah. I would more call them Social Democracies.