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Monday, June 22, 2020

American Conservatives Love Swedish Socialism

Another conservative American pundit suggests that Sweden and its Scandinavian neighbors are not at all socialist, and in fact worth copycatting. 

Last time it was Rand Paul who went on an inexplicable Swedophile trip. This time the hand that holds the pen belongs to Dinesh D'Souza.

My usual question remains unanswered: if American conservatives like Sweden so much, why do they oppose the left here in this country who want to turn America into Sweden?

D'Souza's delusions, dispensed through the New York Post, start off predictably:
One might think that our experience with the coronavirus has given Americans a scary foretaste of radical socialism. Empty shelves, shortages and limits on basic commodities, economic stagnation, and all of this combined with a sustained assault on our privacy, our freedom of assembly and our religious freedom. We have endured on a temporary basis what some socialist societies typically provide on a permanent basis. Yet the socialist gang is still out there — Bernie and the Squad — touting the virtues of socialism. And they’re pulling the Democratic Party in their direction, with Biden now climbing on the free college bandwagon and embracing the socialist agenda packaged in the Green New Deal.
So far so good. The usual punditry to set up what is to come. Then he turns his attention to Sweden:
Democratic socialists like Bernie and Alexandria Ocasio-Cortez insist that their brand of socialism is modeled not on the failed socialisms of the past, but rather on the one place where socialism seems to work: Scandinavia.
You would think that at this point, the good D'Souza would start explaining what socialism actually looks like in Sweden, Denmark and Norway. Not so. Instead, he embraces that very same socialist concept:
But upon examination the Scandinavian or Nordic model is not what the Left is proposing here. Scandinavian countries are pro-capitalist in wealth creation and socialist in wealth distribution. In the words of Forbes columnist Jeffrey Dorfman, “They don’t kill the goose that lays the golden eggs.” This is a sharp contrast with what Sanders, Warren and other leading Democrats advocate in this country.
Unfortunately, D'Souza forgot to check the facts. Apparently, so did Jeffry Dorfman. The big export corporations that dominate the Swedish economy may be laying golden eggs, but those eggs have gotten smaller over time. That is precisely the problem with socialism - a problem I explained at length in my book Industrial Poverty. There is a clear, unmistakable and negative relationship between the size of government on the one hand and GDP growth on the other: the bigger government gets, the more slowly the economy grows.

In short, the golden eggs get smaller.

It is astounding that American conservatives don't get this point. Is it that they don't check the size of government in Sweden? Or do they simply not understand that socialism means big government?

Anyway. Back to D'Souza's New York Post piece:
Corporate taxes in Scandinavian countries are around 20 percent, no higher than in the United States. There is no minimum wage in Scandinavia. Companies can hire and fire workers for any reason.
Oh dear... two absolute factual errors:

1. Yes, there is a minimum wage. It is negotiated in union contracts, and unions have virtual government status in their ability to force employers into signing a union contract. They can legally shut down and put into bankruptcy a business that refuses to sign a union contract. They can put them under blockade, a practice I have explained in my tri-part series on Sweden. So yes, there is a minimum wage.
2. No, you can't hire and fire workers for any reason. Where on God's Green Earth did D'Souza dig up this nonsense? Again, unions control who gets fired and who doesn't. The default is "first hired, last fired", but the union can negotiate exemptions to that rule. And they do: workers who are not in good standing with the union often get laid off first.

In short: the labor market is controlled entirely by the unions. Their power is codified into law and they de facto have government status. For more on this and other aspects of the Swedish original version of Scandinavian socialism, click here.

Then D'Souza brings up the inheritance tax, claiming that "Nordic countries also have no inheritance taxes." 

I thought he was talking about Scandinavia, but be that as it may. They have other ways of taxing wealth, such as the Swedish property title tax and "real estate title transaction" taxes. The first is a property tax and the second is a tax on the money you net when you sell your property. It currently runs north of 20 percent. Since home ownership is really the only means to building wealth for Swedish families, the property title tax is a wealth tax and the property sales tax is a combined wealth and estate tax.

Why is it so hard for these conservative half-wits to actually do their homework?

D'Souza turns around and tries to make Scandinavian socialism palatable:
Yes, Scandinavian countries have a large welfare state that provides guarantees for college education, health care and retirement. But the key point is that they impose high rates of taxation on the entire society to pay for those guarantees. In America you have to earn $400,000 to pay the top marginal rate of just under 40 percent; Scandinavian countries impose top rates of 50 to 70 percent and they kick in around $70,000 in annual income.
Well, none of the Scandinavian (or was it Nordic...?) countries impose a 70-percent marginal income tax, but let's leave that detail aside for now. He also mentions the high VAT, which runs as high as 25 percent on some items. What he doesn't mention is that the VAT applies to virtually everything you buy. Swedes, e.g., pay a VAT on theatre tickets, train fares and tap water. 

But somehow this is supposed to be a "non-socialist" way of taxing people - not a "soak the rich" approach that D'Souza claims is unique to American socialists:
Far from a policy of “soak the rich,” Scandinavian tax policy is undiscriminating in that it soaks the whole society. No Scandinavian country demonizes its rich and successful citizens the way that socialists and progressives do here. Hardly anyone in Sweden, Denmark or Finland rages against “millionaires and billionaires.”
Nonsense. All you need to do is follow the political debate in one of these countries for a couple of weeks. But there is also a widespread culture in Scandinavia that looks down on the rich, a culture that brands the wealthy as having unfairly earned their money and taking advantage whenever they can buy something others can't. This has led to confiscatory taxes - and to many wealthy people leaving those countries.

I keep asking myself where D'Souza gets all his nonsense, including the one about how no one "rages" against the rich. Oh, wait: I know. He has talked to Johan Norberg, the man who has yoghurt in his shirt pocket.

Once again, D'Souza explains that he doesn't have a clue what he is talking about:
The basic principle of Scandinavian socialism is “we’re all in this together.” Scandinavia is far removed from George Bernard Shaw’s maxim that “Any country that robs Peter to pay Paul can always count on Paul’s support.” Yet that principle is precisely what drives the socialist Left in this country. The appeal of socialism, especially to young people, is the appeal of “free stuff.”
Another exhibition of ill-studied rhetoric. It is the very idea that "we're all in this together" that has led to the socialization of half the economies in these countries. Socialism leads its advance with this aphorism, using it to explain why government must drive out private providers and socialize health care, income security, child care, education - including universities - and retirement security. If D'Souza thinks that America should no longer have private health insurance, private health care providers, private colleges and private child care, then all he needs to do is join the ranks behind Bernie Sanders and Ocasio-Cortez.

Here is another one of D'Souza's talking points:
When Democrats pitch free college it’s not because college is actually free but because they intend to force someone else to pay for it. In Scandinavia, by contrast, citizens never speak of “free college” or “free health care” because they know who is paying for it: They are!
So what?? Nobody spoke of free college or free health care in the Soviet Union either. What is his point?

Then D'Souza drops the V word:
The American Left’s socialist model is in fact more akin to Venezuela than Scandinavia. ... Venezuelan socialism is based on demonizing the rich. Hugo Chavez openly boasted about expropriating the resources of successful entrepreneurs; indeed he was filmed taking their stores and businesses on his national television show.
The difference between Scandinavian socialism and Venezuelan socialism is that in Scandinavia they socialize the proceeds of property; in Venezuela they socialize property itself. It is comparable to the difference between what the reformers in Czechoslovakia during the 1968 Prague Spring wanted to introduce, and the Stalinist system they already had. 

Socialism with a smiley face. 

Or, in D'Souza's own words:
No surprise — many business owners fled the country, creating many of the shortages of basic goods that now plague that country. What Chavez achieved through appropriation, the Democratic Left here would replicate through confiscatory taxation.
And Scandinavian taxes are not confiscatory?? I doubt Dinesh will read this, but for those who really want to learn what Scandinavian socialism looks like I have my tri-part series about Sweden. My native country was the arch-type welfare state that the others copied, so it is a good place to start if you want to learn what socialism actually looks like in Scandinavia.

By praising the Scandinavian welfare state, D'Souza rolls out the red carpet for the Sanderistas of the American left. If he really were opposed to socialism, he could have told his readers a little bit about the economic differences for people who live under these systems. Since he didn't, here is a quick rundown between America and Sweden, based on raw data from the OECD and the Bureau of Economic Analysis:

  • In 2019, per-capita disposable income in America was $55,109; in Sweden it was $36,450;
  • Household net worth was 601 percent of disposable income in America, compared to 526 percent in Sweden; 
  • In dollars, this amounted to $331,425 vs $191,727, leaving Americans with a 73-percent higher net worth than Swedes;
  • Private consumption in America was 68 percent of GDP, compared to 45 percent in Sweden.
This last point means, plain and simple, that the American economy is more free and more tuned toward providing for its people, than for businesses and government. Not only do consumers have more money in America, but they also get to control to a greater deal how they spend that money.

Why do American conservatives dole out so much adoration and praise for Scandinavian socialism? There is always the possibility that they are ignorant, but I would prefer to believe that they are intelligent, studied and educated. In that capacity, they know full well what Scandinavian socialism is all about, how it works and how it slowly chokes its countries to death.  

Therefore, assuming that American conservatives really are the educated men and women they proclaim to be, I can only draw one conclusion from their Swedophilia: they are neoconservatives. The followers of Irving Kristol, Norm Podhoretz and the others wanted a big welfare state with a single-payer health care system and all that. They just thought they could run it more efficiently than the socialists would. 

Socialism with a clean-shaven face.

If Dinesh D'Souza has no problem with single-payer health care, single-payer college education, socialized child care and socialized income security, all of which are staples of Scandinavian socialism - then what does he have to fear from the socialism that Bernie Sanders wants? 

Can someone please explain that to me?

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