Scandinavian countries—specifically, Norway, Sweden, Denmark, and Finland—are perceived as socialist because their citizens pay very high income taxes. However, these countries still suffer from many of the social and economic ills that socialism is supposed to prevent. Additionally, the United States taxes wealthy Americans at much higher rates than Scandinavian countries tax their similarly wealthy citizens, yet leftists such as Sanders are still displeased with how our tax system is organized.
Scandinavian Countries Aren’t Socialist
One of the reasons it is incorrect to refer to countries like Sweden as “socialist” is that these countries were once far more progressive than they are now. The Economist says Sweden was once a “tax-and-spend” economy in which author Astrid Lindgren (of “Pippi Longstocking” fame) was required to pay more than 100 percent of her income in taxes. This heavily progressive tax rate stunted economic growth, and Sweden fell from the fourth-wealthiest country in the world to the fourteenth-wealthiest country in just 23 years.
The government recognized the cause of the trouble and instituted several capitalist reforms to resuscitate Sweden’s economy. According to The Economist, following the success of Sweden’s relatively right-leaning Moderate party, “Swedish GDP is growing strongly, and unemployment is falling. The budget is heading into surplus next year.” The article notes that many Swedes support moderate and right-wing reforms: “The centre-right has made welfare payments less generous, cut taxes for the lower-paid and trimmed the numbers on sickness benefit. Voters seem to approve.” The electoral success of moderate and conservative parties throughout Scandinavia is at once a rejection of progressive policies and an endorsement of free markets in what some consider to be the most progressive region in the world.
In some ways, Sweden is now less progressive than the United States. Harvard professor Gregory Mankiw writes that the wealthiest decile of Swedes carries 26.7 percent of the tax burden. In The United States, the figure is a whopping 45.1 percent. Additionally, wealth inequality is more pronounced in Scandinavian countries than it is in the United States. In Sweden, Denmark, Finland, and Norway, the top decile of earners own between 65 and 69 percent of the country’s total wealth, an astonishing figure. Sanders is apparently unaware of this reality, given that one of his primary reasons for praising Scandinavia was their low levels of wealth inequality.
Scandinavia Has High Taxes and High Personal Debt
Despite their rates of wealth inequality, it is true that the citizens of Denmark, Sweden, Norway, and Finland devote more of their income to taxes than American citizens do. According to the Organization for Economic Cooperation and Development, the average American spends 9.8 percent of his income on taxes; Swedes spend 12.3 percent, Danes 26.4 percent, Norwegians 10 percent, and Finns 12.9 percent. Perhaps because of these measures, government debt is less of a problem in Scandinavia than it is in the United States.
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The most embarrassing file leaked in the release suggests that several Democratic congressmen received kickbacks from big banks in exchange for the bailout of the financial industry after the 2008 economic recession. An excel spreadsheet released in the leak said big bank TARP recipients donated over $37 million in the 2007-08 campaign cycle, with Democrats receiving 57 percent of those donations.
When I arrived in 1992, Venezuela — which has the world’s largest oil reserves — was among Latin America’s richest countries. Today, the monthly minimum wage is barely $20 (at the black market exchange rate), less than Haiti’s. Extreme poverty and infant mortality — both of which dipped in the first years of Chávez’s presidency — are again rising. Oil production has fallen by nearly 25 percent since Chávez took office and decried foreign participation in the country’s energy sector; he milked the state oil company dry to pay for his social initiatives and his own political campaigns. Today, the state oil company is warning that it may default on its bonds. Production at the state steel company has fallen by nearly 70 percent since its nationalization. The power grid, under state control, suffers constant outages and service disruptions. Venezuela, which once exported electricity to Brazil and Colombia, had to ration power earlier this year.
Food production has cratered. In my largely agrarian village, my neighbors don’t have seeds, fertilizers, or pesticides. The government took control of the country’s largest agricultural goods company years ago, promising to make it more responsive and make Venezuela self-sufficient in food. The result has been just the opposite. Today, Venezuela is a nation waiting in line to buy scarce items such as bread, rice, pasta, and sugar; buyers now queue at stores the night before, hoping that hard-to-find items might appear.
Hunger stalks my village as well. My neighbors were innovative as we went on the Maduro diet. In lieu of cornmeal, they began cooking green bananas or yucca roots to make a dough which they then turned into the ubiquitous arepas. Beef and poultry were replaced by what they could hunt in the cloud forest by the village: Opossums, sloths, porcupines, kinkajous, monkeys, and chacalacas all found their way into their cooking pots.
A few of us started a soup kitchen for the village’s most needy, asking our overseas friends for donations to buy food. Within days, we were serving meals for 90 people, up from the 30 or so we initially forecast. Still, that wasn’t enough for some: One elderly man died of malnutrition. Others began gathering up a paste made of chicken by-products such as guts and bones which one woman used to bring to the village for stray dogs. With a little onion and rice it was palatable, they said.
Medicines are almost nonexistent. Aspirin has become a luxury for many; diabetics, people stricken with cancer, and those with high blood pressure are out of luck. The public health system — which Chávez vowed to make the region’s finest — has been gutted. Those needing operations face waits measuring months, and the cost can be astronomical.
Chávez promised a people’s revolution, a finer form of democracy. Instead, Venezuela is now facing political repression. Under Chávez, the country’s institutions — from the courts to the military to the legislature — lost whatever autonomy they once had. All became appendages of the Bolivarian socialist revolution. Under Chávez, it wasn’t strange for the supreme court to open one of its sessions by warbling a pro-Chávez ditty. Or for the head of the National Electoral Commission to show up at Chávez’s funeral in 2013, wearing the armband of Chávez’s political movement.
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