Liberal American politicians often cite Nordic countries like Norway, Sweden and Denmark, as proof that big government or socialist policies can lead to a vibrant, prosperous nation, but a leading economic scholar says those countries are successful despite more government and are actually proof that such policies are a failure.
Dr Nima Sanandaji is author of “Debunking Utopia: Exposing the Myth of Nordic Socialism”. He says liberals and socialists in America and beyond frequently extol the Nordic countries for one simple reason. The Nordic countries are Norway, Sweden, Finland, Denmark, and Iceland.
“If you remove the Nordic countries, the left doesn’t have any role models left. The Left doesn’t say, ‘Look at California. They have big government. It works.’ They don’t say that. They don’t say, ‘Look at Italy. they have social democratic policies. That works.’ They only point to the Nordic countries,” said Sanandaji.
But even that example is badly misleading. Sanandaji says while there are some socialist policies in place, those are not socialist countries and they don’t see themselves that way.
“The policies of Nordic countries are not socialism. It is capitalism. Denmark is used by the U.S. left as the main role model for socialism. The Danish prime minister came to Harvard University at the end of last year. He said, ‘Stop saying Denmark is socialist. Denmark is a market economy,'” said Sanandaji.
While citizens of Nordic countries pay up to 60 percent of their income in taxes, Sanandaji says other policies help to keep the economy humming.
“To a large degree, these companies compensate for high taxes by having economic freedom in every other area. Denmark has the same economic freedom score that the U.S. does. Why? Besides having higher taxes, in virtually every other part of their economy, they’re much more capitalist than the U.S. is,” said Sanandaji.
But even more significant than economic freedom, says Sanandaji, is the renowned work ethic and strong responsibility culture of the Nordic people, qualities he says were in place long before the big government policies came along.
“The Nordic countries have a culture of success that gives them prosperity, that gives them social success. This culture of success predates the welfare state. I systematically show in my book, ‘Debunking Utopia,’ that the admirable features of the Nordic countries predate the welfare state,” said Sanandaji.
However, his research shows that the ‘culture of success’ is even stronger in Nordic immigrants to the U.S., proving the big government policies are actually a hindrance.
“All of [the admirable features] are found equally or even more among Nordic Americans who live in the American capitalist system than their Nordic cousins who live in the social democratic system. It is not about social democracy. It is not about big government. It is about a unique Nordic culture,” said Sanandaji.
Liberals in the U.S. and beyond point to Nordic life expectancy exceeding that of the U.S., including Denmark, which has a life expectancy 1.5 years higher than Americans. Sanandaji says that’s true, but government-run health care is not the reason.
“True. They do live longer, but I look at history. In 1960, Denmark had lower taxes than the U.S. had. At that time, before the welfare state, Danes lived 2.4 years longer than Americans. The difference has actually shrunk when Denmark is moving toward the highest tax on the planet,” said Sanandaji.
He also says Denmark has the lowest life expectancy among the Nordic countries despite having the biggest government. Iceland has the smallest government but also boasts the longest Nordic life expectancy.
But while the Nordic nations are doing much better than socialist nations like Venezuela, Italy and Greece thanks to a strong culture and market economic policies, Sanandaji says other big government policies are harming those countries.
“All this social capital, work ethic, responsibility ethics has been grinded down by the welfare state. Many, many people are trapped in welfare dependency. That creates social poverty. So while the welfare state is supposed to combat poverty, it is actually to some degree creating poverty and social problems,” said Sanandaji.