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The home pages for the Usenet newsgroup soc.culture.nordic

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Subject: 2.8 
Nordic Socialism and welfare

2.8.1 Wouldn't the Nordic economies gain from abolishing Socialism?

The words "Socialism" - "Liberalism" - "Conservatism" are used in a very different way in the USA compared to the usage in the continental Europe and in Norden. In soc.culture.nordic we use these words as they are understood in Europe:

Liberalism and Socialism are in Europe basically defined as ideas with a great deal of heritage from early Liberal and Socialistic writers. Liberalism could be said to revolve around freedom from the power of the mighty, and Socialism around freedom from the power of the rich.

Democratic freedom is per definition a Liberal virtue.
Some Social democrats might be classified as much of a Liberal, but most are definitely not. The program of the Social Democratic parties are not understood as Liberal, but when it comes to practical pragmatic politics and policies the outcome might be a mixture between the own program and other ideas.

Conservatism is likewise defined as ideas succeeding the writings of Burke, Disraeli and other classical political writers. There are two major branches among the Conservatives: the Social-Conservatives and the Value-Conservatives. The Value-Conservatives? Oh, that's people who speak a lot of the importance of the church, the army, the family and maybe the crown (king/ government) and are very happy to spend all the tax money on those institutions instead of extravagances on children, disabled and unemployed.

Socialism is the people's control over the means of production.

High spending government is something different.
This phenomenon comes in different wrappings: Feudal, Authoritarian Conservative, Fascist, Social Liberal, Social Democrat, Christian Democrat and so on.

As an ideology, Socialism deals more with the political basis than with the implementation. Nobody can justify taxation as a goal, that politicians and civil servants are always right, that it is a goal to confiscate any kind of private property. There are some Socialist ideologies that want society to build upon omnipotence. All but tiny extremist groups have survived. Most were slaughtered in Eastern Europe.

The Socialist ideology was more a visionary romantic one than a practical political theory. There is a little bit of the rhetoric left (for internal use) in the Social Democratic parties, so maybe one could call them Socialist. Then there are the proper Socialists on the left of the Social Democrats. Some of the Nordic still worship Karl Marx.

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2.8.2 Don't the Nordic states have huge welfare expenditures?

Subsidies to industries have been popular among nearly all parties, for instance. The health care system, the tax financed school system (including student loans) and the mandatory participation in schemes for loss of income at retirement, disability, sickness or unemployment has got a solid support by something like 90% of the politicians and 95% of the Nordic voters. The differences regard adjustments, not the idea as such.

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2.8.3 But you do pay terrible taxes, don't you?

Since the education of the youths is paid for through taxes instead of parent's earnings, the most intelligent kids get educated regardless of wealth. This is an advantage for the country as a whole. You can also say: The educated pay back for their education through taxes.

The same applies to the health care, which additionally seems to be remarkably cost efficient in the Nordic countries (compared to the US at least).

We all will need support around our birth, during the time when we grow up, when we get ill and when we get old. We all need education. Those needs are as common as our general need for streets and law and order and protection by an army. All will probably become seniors. In any case, all have reason to prepare for that. If the preparation is made by individual savings or by mandatory contribution to a general system is the difference. The cost for living and health care during your last years won't change if you live in a libertarian state or in the nanny-states of Europe. The only difference is the method of paying. Here you pay in advance via the tax system.

The same goes for primary and secondary education. All who earn money have once upon a time used the pre-schools and schools, and in our society you pay for it through the tax some years later. In other systems you "borrow" it from your parents when you use the service, and then "pay back" to your kids when they grow up.

Neoclassical economists use to argue that the high taxations in the Nordic countries must lead to high unemployment, low productivity, low rates of investments and too little incentives to work and innovate. Now and then these arguments are presented in s.c.n., and regularly the following will be presented:

The Nordic experience shows that 50% taxation is not too high to keep most people from working. In the 80s there was full employment despite high taxes and an extensive social security system. People still prefer work to unemployment. Sweden could maintain full employment until 1990s, but now the open unemployment is higher than in the US, although the criteria of the statistics differ.

The Nordic model worked well till the 90'ies economic depression, but it may have gotten into trouble in some of the countries now. On the other hand, one could argue that thanks to this model the recession in the beginning of the 90'ies became moderated in a very favorable way, compared for instance to the development in the United Kingdom.

It's often noted that the level of investments in Finland only some 5-10 years ago was very high, maybe too high, and that Sweden has a trade surplus (i.e. producing to a higher value than they consume) whereas USA has a trade deficit.

Productivity is relatively high in Norden. Social security does not lower productivity. In fact U.S. style low pay employment does not have as great incentives to high productivity as the Nordic union negotiated pay model.

Among the positive sides of this high-taxation system, one can note:

• almost no poverty or starvation, as is the case in American ghettos
• virtually no homelessness problem
• very little crime
• equal opportunity to education & health care, regardless of the wallets

Another example is that if a US worker is forced to have an expensive car and drive for two hours each way to get to work, spending money burning gasoline, that shows up as a bigger contribution to GDP than that of the Finnish worker who lives in a comfortable cogeneratively heated house out in Käpylä, doesn't need a car, and rides an inexpensive tram in to work.

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2.8.4 Now, when the Soviet Union has fallen, you are free to liberate your economies!

But it is a fact that the countries in the western (democratic) part of Europe never became "free capitalistic" states as the USA, and Americans see clear similarities between the western European societies and the communist ideals.

Some writers use to argue that it's because the US didn't introduce any of what is now known as libertarian thought, that hardly any countries in this part of Europe bothered to try them. Or that the Nazi influence scared most countries off in trying a political ideology other than communism.

It's a misconception to believe that all of Europe was forced or tended to adopt a "Socialistic" policy after the 2nd World War. After the war, the only thing which with force could have been an agent for Socialist or collectivist policies where the politic, economic and historic realities in the respective countries. What happened in East could not enforce Leninism (or related ideologies) in the democracies west of the iron curtain. Quite the contrary.

An alternative view is that Marxism is a product of collectivist Old-world thinking, and that it's the Old-world customs which Americans recognize in Socialism.

One outgrow of this Old-world collectivism and stress on homogeneity is most probably the way people feel responsible for each other, and each other's kids, in Scandinavia. Maybe it's wrong to connect this with press reports on scientifically determined sign of how unpaid voluntary work is more prevalent in Scandinavia than in any other part of Europe. But it's tempting when Yanks stress this aspect of their society as something where they are world leading.
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One could say that after ww2 not much changed. The societies were as centralistic and non-individualistic as they had been since god-knows-when. Democracy was re-established in the parts of Europe which weren't governed by Soviet troops. That was the main influence of UK/USA - except for the economical and cultural.

Liberalism was not at all unknown to Europeans. Nor Conservatism. All the time from the 1848-revolutions is marked by the reaction on the danger of the urban concentrations of proletarians. Marxism, late 19:th century Social Conservatism and Liberalism are the most obvious signs. What happened after the first world war, 1918, was the success of Liberalism with full democracy in all countries, and then a backlash when non-democrats came to power either through democratic elections, or as a response to the unstable governmental situation which the democracy had led to: In short the political map of the pre-ww2-societies in Europe could be described as consisting of three blocks. Socialists, Liberals and Conservatives. All three in opposition to the other two. (The fascistic movements are then associated with the Conservatives, which is true if one regards alliances, but not quite true if one looks more directly on propaganda and programs.)

The Socialistic block was split between reformists and revolutionists. And in some countries it was the reformists and the Liberals who together were strong enough to compete with the anti-democratic forces.

After the second world war the Fascist parties had lost all credibility.

For the people in the destroyed Europe (well, west of the iron curtain) non-individualistic solutions were judged as most fit, as typical in the German sick insurance system or centralized accords for agreement on wages. I think one could say that most people (sympathizing with all three blocks, the Conservative, Liberal and Socialist) favored collectivist solutions, seeing democracy as collectivist. The most individualistic tendencies were to be discovered among Liberals.

The difference between Germany and Norden was not the intentions, but the different positions the societies had to start from.
Germany was destroyed. The Nordic societies were not.

The eastern part of Europe (if Russia included, far more than the half) learned to know the Russian masters and their ideology. It was however only a tiny minority in West who aimed at a development as in the Soviet satellite states.

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2.8.5 What are the differences of the economies of the respective Nordic countries?

Norway  - the oil incomes, the fish industry.
Denmark - virtually none. (Lower beer taxation.)
Sweden  - lower income taxes; other taxes and national debt higher.
Finland - the highest unemployment rate.
Iceland - the dependency on fishing.

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