The Scandinavian countries are success stories in the modern world, with Denmark, Sweden, Norway and Finland taking the top four spots in the recent U.S. News & World Report’s annual ‘Best Countries’ ranking.
How can these countries which have some of the highest income taxes in the world, regularly top the ‘best country’ indices each and every year?
The policies seem to be ‘socialist’, but can they be compared to the socialist policies used in countries such as China or Cuba?
Differences in the type of Socialism
It would not be fair to brand the socialism used in Scandinavia as equal with other forms of socialism.
For the purpose of this article, I should refer to Scandinavian socialism as “Western Socialism”, and the socialism in China/Cuba as “Leninist”.
The Leninist ideals are distinctly totalitarian, with a dictator in power to control the population through military means, which is largely different to the beneficial Western Socialism which aims to funnel the income taxation into societal benefits such as shared paternity/maternity, pensions, and generous child care to help double income households.
Let’s dig deeper into Leninist Socialism
Karl Marx released his Communist Manifesto which argues to eliminate the existing class struggles between the bourgeoisie and the proletariat driven by Capitalism.
He argued that this was only possible through means of revolution, as Government intervention could not resolve the ‘unstable’ Capitalism.
The movement was highly influential, but as with most movements, interpretation can lead to a broad range of situations.
There were highly beneficial outcomes such as the implementation of the NHS in the UK, but equally there are negative situations where power hungry dictators such as Stalin and Pol Pot caused numerous deaths, controlled the media, and used heavy hands to quell uprisings against the unfair living conditions they created.
Obviously the hard hand of a dictator with multiple deaths attributed to their form of socialism should not be compared to the generous social state of the Scandinavian bloc.
What about France who elected Francois Hollande?
The socialism in France really isn’t comparable to the socialism in the Scandinavian countries, or even with China/Cuba.
Firstly, the country seeks to elect its head of state, with an election every five years, with the opportunity for the population to boot out an underperforming leader, and to completely switch from Socialist policies, to more capitalist ones.
Furthermore, France has military obligations to fulfil; with investment in armies, vehicles and weapons, they commit to the NATO agreement to be ready at all times for defence of other member states, peace-keeping, and ultimately war.
What are the features of Western Socialism?
The Scandinavian countries employ what is called ‘Social Democracy’ which is helpful to distinguish it from the ‘Social Authoritarianism’ of the old Soviet Union.
They have elected Parliaments which offer a broad number of parties where it is common for multiple parties to form a coalition to best represent the voting preferences of the public.
Punishments for those committing crimes is less heavy handed, e.g. the vicious Anders Breivik from Norway who murdered 77 people, and who received 21 years of preventative detention probably would have received a far more significant punishment under a dictatorship seen in history.
This is not to say the Scandinavian approach is better, but it reflects the democratic, and exonerative nature of their societies.
The socialist model which has thrived in these countries has been a ‘pseudo-socialism’, which sees the benefits of the mixed market economy where Capitalism is allowed to thrive with the existence of various Government regulations, and high taxation.
This control allows these countries to curb the increase of inequality as aggregate wealth rises by reallocating resources to its citizens to make sure everyone gets some form of benefit.
By allocating the wealth across the nations in the form of child care, shared maternity/paternity, pensions etc., these countries build a resilient form of community which leads to the high rankings on the ‘best country’ lists.
Does Socialism Always Fail?
As mentioned earlier, the Marxist prediction was that the oppressed workers will unite against the ruling class who are extracting the wealth from human capital, and will lead to a reallocation of the built wealth to benefit everyone – this is highly unlikely, especially in today’s society.
The reality of the previous Socialist societies was that they were on the more extreme end of the spectrum – being defined as Communist.
This is where the societies were ruled by dictators who became too powerful, and where the famous quote from Animal Farm holds: “All are equal, though some are more equal than others”.
Communist societies have fallen one by one: President Bush, and Mikhail Gorbachev formed a US-Soviet partnership which helped in the Gulf War of the early 90s, and lead to a new partnership which would assist in fixing problems between the two states and the world.
Soviet forces were eventually withdrawn from the multiple European states where they were stationed.
What followed were declarations of Independence from Lithuania, Estonia, Latvia and Armenia which were fought by the Soviet State, but dissatisfaction grew as other states such as Azerbaijan and Georgia voted to oppose the Communist rule.
After a failed coup by Boris Yeltsin to overthrow Gorbachev who looked to preserve the Soviet Union in a looser form, the authority of Gorbachev was irreparably damaged, and he resigned, leading to the dissolution of the Communist Party, and the banning of Communist activity in the Soviet region – ironic that an uprising predicted in the Communist Manifesto would be the death of the Leninism.
Even in China, the communism isn’t of the dictatorial form, with no one official ruling the country, instead placing a group of ten officials who control policy.
This has pushed the now obviously Capitalist country into the top rankings for wealth, battling with the USA for the top spot.
Cuba which is famous for its communist rule is coming to the end of decades of rule by the Castro family, has seen its diplomatic relations with the rest of the world improve, with Barack Obama ending the ‘wet feet, dry feet’ policy which stopped Cuban’s from entering the USA, and being entitled to apply for US citizenship after one year (though Trump reversed these changes back in November 2018).
North Korea, probably the most recognisably communist state with a single dictator, cannot be the poster boy for countries wishing to change their economy to a socialist one.
The weak economy has left its citizens starving, desperate to leave the country across the border to the more progressive South Korea, where the average citizen stands at 4 inches taller than their North Korean counterparts.
So does Socialism Work?
Clearly the evidence from the Social Democracies in the Scandinavian countries is that this form of Western Socialism has proven beneficial, providing their citizens with a society which benefits from equality of opportunity, relatively even wealth distribution (compared to other developed nations), and low crime rates all while reaping the benefits of a controlled capitalist foundation.
While this works for them now, it will be interesting to see how they cope with the growing percentage of the population at retirement age, and the increase in immigration from those with differing cultures and expectations of what the state is responsible for.
Without proper integration, this could test the resilient community that has been built, and could create a dangerous class divide in the society.
Even before these hypothetical situations are tested, it has certainly proven to be a very positive economic model for its citizens, and it would be interesting to see if the policies will be used in other countries in the years to come, something which politicians like Bernie Sanders in the previous US elections have attempted to do.