Last week I was talking to the Danish filmmaker Andreas Dalsgaard, who contacted me to interview me and gather information about a documentary he is shooting, so he has been in several cities in the United States. We were talking informally about politics. He had previously been in New York, and although for him now Joe Biden is a better option than Donald Trump, he was concerned about the confusion that some of his New York friends have about the economies and political systems in other parts of the world, and especially in his native Denmark, which Democrats like Alexandra Ocasio-Cortez and Bernie Sanders called “socialist,” despite being the eighth freest economy in the world, according to Heritage, and unashamedly embracing capitalism.
The most widespread lie among the world’s socialists is about the political, social, and economic system of the Nordic countries; of course, they will never give Mao’s China as an example, Fidel’s Cuba, Stalin’s Russia, or Chávez and Maduro’s Venezuela. Therefore, every time a debate comes up, they will say that true socialism is Nordic and that everyone else is a swindler, even calling them “right-wingers” to justify their ideology.
Cases where the left tries to attribute the failures of its ideological comrades to those of another side often happen on the continent. For example, in Venezuela the majority of the opposition to the tyranny commanded by Nicolás Maduro is also socialist, which has led them to argue that Chavismo is of the right, when not only has Chavismo itself declared itself socialist, but all its state policies are openly socialist (nationalization, expropriations, high state intervention in the economy, high bureaucracy, the aggrandizement of the state, strong subsidy policies, high public spending, among others).
Venezuela, a country that became the richest in Latin America and was among the five strongest economies on planet earth, was four times richer than Japan and twelve times richer than China, this, during the military dictatorship of Marcos Pérez Jiménez of Tachira. Several decades later, after a “social democracy” that lasted forty years, and a socialism that is already going for twenty-one years in 2020, Venezuela became one of the poorest countries in the world, with more than five million migrants, a hyperinflationary economy and a minimum wage that during 2019 remained between 2 and 6 dollars a month, bringing out the true face of the tragic socialism.
Currently, Venezuela does not even register its GDP data, since the Central Bank has not published them for a couple of years. But the latest Index of Economic Freedom, created by The Wall Street Journal and the Heritage Foundation, places Venezuela at position 179 in the world, in a measurement of 180 countries, where only North Korea is below and Cuba is at position 178, adding that the minimum wage in Venezuela is the lowest in the world.
Now, having made a slight introduction to the discursive narrative of the left regarding false socialism, let us analyze the Nordic economies.
Free market economies
“The Nordic model is not socialist,” said economist Robert Lawson, who noted that a socialist system, in its classic definition, is one in which the means of production are confiscated by the state and labor, land and capital are “collectively” owned by the state.
While it is true that the Nordic countries have high taxes, in those nations the free market prevails and there is ease in setting up businesses. Nor is wealth demonized by state discourse and policy. The difference between the Nordic economies and the American economy is that their tax collection is higher and this, in turn, leads to a percentage of public spending that is also higher, and to the provision of medical care and education, which is not free, but is prepaid through taxation and administered by the State. Economist Lawson describes it as follows: “It’s a private market economy with a lot of taxes.
In a system of capital, or known as “capitalist,” independent people are not limited in producing wealth, while socialism seeks to take over all the businesses and wealth of the nation. This as a rule has always led to another type of oligarchy, the so-called “state oligarchies”, which are made up of the hierarchies of governments, who tend to appropriate all the productive businesses of the nations, as has happened recently in Venezuela. The socialist model is a basic system of compensation based on ideological loyalty, which in turn rewards and sponsors corruption.
The Nordic countries have historically been open to the creation of businesses and have had high indexes of economic freedom, in fact, in the index of economic freedom of 2020, the first place is occupied by Singapore, Denmark is in the eighth, Iceland in the 13th, United States is in the 17th, Finland in the 20th, Sweden in the 22nd and Norway in the 28th, unlike the cases of Cuba, Venezuela and North Korea, which occupy respectively the last three positions in the world ranking.
The Nordic countries are: Denmark, Finland, Iceland, Norway and Sweden. All these countries, as I have already mentioned, have one of the most liberal economies to do business, for example, in Norway and Denmark you only need four days to constitute a company, while in Sweden you need eight and in Finland and Iceland twelve. This, according to data provided by the World Bank; in turn, Denmark’s economy ranks 4th in the world’s best countries to do business, Norway 9th, Sweden 10th, Finland 20th and Iceland 26th.
Bureaucratization is very limited, as are controls over the economy and interference in private enterprises. Norway is the only Nordic country that is still conceptually mentioned as a “social democracy,” this because the state owns important oil fields and manages the production of hydroelectric energy, besides being the nation with the highest tax burden in the world. However, the main doctrine of socialism does not prevail in Norway: control of all means of production and high state intervention in the economy. The fact that Norway is among the ten best countries for doing business in the world proves this.
It is true that for years the Scandinavians flirted with the social democratic model, this in the previous century, in the middle of the 1970s, and their passage of nationalization and state interventionism produced a stagnation in their economies, which was corrected over the years by imposing once again liberating measures on the economy. For example, in that decade of the 1970s in Sweden there was an atrocious increase in taxes and therefore a disproportionate growth of the state and public spending, which negatively influenced the economy of the Scandinavian country. as reflected in the following graph:
The result is that Sweden dropped out of the top 5 countries with the highest GDP per capita, falling more than 10 places. From the 1990s onwards, corrective measures were again taken to get back on track before immersing the country in social democratic economic policies; then, again, the number of public employees began to fall, and in turn, the private enterprise grew, and the result was, of course, the growth of Sweden’s economy.
Conclusion: It is important to emphasize that to generate wealth one should not emulate what rich countries do, but rather what countries did to become rich