The Myth Of Successful Socialism
June 1st, 2019 | RR
Denmark, Sweden, Finland, Norway and Iceland. You've heard from people like Bernie Sanders and Alexandria Ocasio-Cortez that these are successful socialist countries—but they aren't. Socialists in Canada and the United States like to point to these Scandinavian countries as beacons of hope for socialism around the world, but they never really tell us much about how the economies of these countries actually function. The truth is, these countries don't meet the standard definitions of textbook socialism. In fact, a lot of them are far from anything that resembles the NDP and Bernie Sanders' brand of democratic socialism.
Socialism is the wimpy cousin of communism. Socialism is defined by the social ownership of resources and production. This means that true socialist countries, like Venezuela, have nationalized oil, mining, farming and manufacturing industries. In 1976, Venezuela officially nationalized all of its oil and gas production, meaning that all such production and extraction was under the control of the government—or as socialists like to say, it was under the control of “the people”. When Hugo Chavez came to power in 1999, he consolidated Venezuela's control over oil and gas production. Since then, Venezuala has seen a complete decline in international investments and—with the international collapse in oil prices—a complete economic collapse, which was eventually followed by the social collapse and decay that has been playing out on our televisions for almost two years.
Venezuela is a genuine socialist country. Denmark, Finland, Sweden, Norway and Iceland are not. This is why we haven't seen the same scenarios unfolding in these Scandinavian countries.
In Denmark, there are no fully nationalized corporations or companies that produce, extract or refine natural resources. In fact, Denmark's economy is what most economists would call a “free-market capitalist” economy. That's because more than 80% of Denmark's economy is privately operated. Denmark does, however, have high corporate and personal taxes, a strong welfare system and stable social programs. According to people like Bernie Sanders, these strong social services and welfare programs make Denmark a “socialist” paradise. However, most educated economists know that Denmark is not a true socialist country, because strong welfare and social programs do not constitute socialism. Much of these programs are, in fact, funded and supported by a strong and wealthy free-market system.
But, don't tell Bernie Sanders or Canada's NDP.
This is from the Encyclopedia Britannica:
In the Danish mixed welfare-state economy, private sector expenditures account for more than half of the net national income. Public expenditure is directed primarily toward health and social services, education, economic affairs, foreign affairs, and national defense. The government does not have significant commercial or industrial income.
Imagine that. You can do a simple Google search on the subject of Denmark being a “socialist” country and you'll find countless blog posts and conservative publications that tell you the facts about the country's status as a “compassionate capitalist” nation. However, you won't find a lot of CBC or CNN fact checks on the subject, especially when New Democrats and Bernie Sanders refer to countries like Denmark as “socialist”. Politicians like Sanders get away, scot-free, whenever they refer to the apparent “success” of “socialist” countries like Denmark.
When actual facts come to light, we realize that Denmark is the exact opposite of Venezuela. Denmark isn't a socialist country at all—it's a very successful and wealthy capitalist nation. The country has one of the highest GDPs in the world and brings in so much free-market capital through taxation that it can afford to sustain strong, successful welfare and healthcare programs.
Despite all of these facts, socialist politicians in North America always tell us the same things verbatim. They tell us that countries like Venezuela are doing socialism all wrong. It's almost like a talking point they share with each other, but that's totally wrong and easy to research. The problem is, anyone with a brain and a keyboard can find the facts about Denmark, Sweden, Norway, Finland and Iceland. Anyone with a brain would slowly realize that none of these countries are actually socialist countries.
"Denmark isn't a socialist country at all—it's a very successful and wealthy capitalist nation."
Ironically, Venezuela is doing socialism by the book. The capitalist countries that people like Bernie Sanders point to are not, in fact, doing real socialism at all.
What about Sweden?
As Johan Norberg put it in Reason, Sweden isn't even close to a true socialist country:
But that's not what Swedish historian Johan Norberg says in a new documentary and Stossel TV video.
"Sweden is not socialist—because the government doesn't own the means of production. To see that, you have to go to Venezuela or Cuba or North Korea," says Norberg.
"We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily. And that's the period in Swedish history when our economy was going south."
Per capita GDP fell. Sweden's growth fell behind other countries. Inflation increased.
Even socialistic Swedes complained about the high taxes.
Yet even those high taxes did not bring in enough money to fund Sweden's big welfare state.
"People couldn't get the pension that they thought they depended on for the future," recounts Norberg. "At that point the Swedish population just said, enough, we can't do this."
Sweden then reduced government's role.
They cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes, and sold state-owned businesses like the maker of Absolut vodka.
They also reduced pension promises "so that it wasn't as unsustainable," adds Norberg.
As a result, says Norberg, his "impoverished peasant nation developed into one of the world's richest countries."
Just like Denmark, Sweden has strong social safety nets funded by free-market capitalists who pay high taxes. Unfortunately, high taxes and a strong welfare system don't equate to socialism. In order for a country to qualify as truly socialist, the government must own and control production. In countries like Denmark and Sweden, the private market controls production, manufacturing and distribution.
How could the NDP and Bernie Sanders have missed those key facts?
The truth is, they didn't really miss those facts—they ignored them on purpose. People like Bernie Sanders and Jagmeet Singh know that the average person won't bother to look anything up. In an age where we have all the information at our fingertips, people are less likely than ever before to fact-check anything they hear from journalists and politicians.
This means that politicians like Bernie Sanders feed and thrive off of stupidity, laziness and ignorance. Without the stupidity, laziness and ignorance of the modern North American voter, politicians like Bernie Sanders wouldn't even get 1% of the popular vote. You'll hear politicians like Sanders and his supporters call Trump supporters and conservatives stupid, yet they're the ones deliberately leaving out important facts in order to trick their lazy, stupid and ignorant supporters into voting for them.
Denmark and the other Scandinavian countries are not socialist. Those are just the facts.
With all of its gas, oil and natural resource production and extraction under the control of the government, Venezuela is a true and legitimate socialist country. If you watch the news, you'll know exactly what is happening there right now.
Last Spring, Venezuelans had to resort to eating rats and dogs. A video even surfaced of starving Venezuelans killing a live cow and ripping it to shreds. It was like a zombie apocalypse, but it's the exact policies of Nicolas Maduro and Hugo Chavez that caused it. It's the kind of policies that Bernie Sanders and Jagmeet Singh call for in North America. However, if you ask them about it, they would either dodge the question or try to tell you that it's socialism being “done the wrong way”.
In a diverse, free-market economy, competitors fill in the blank spaces in a market when their competitors fail or collapse. In socialist economies, however, the government monopolizes the resources and much of the distribution, so when things go sideways, there are no competitors or other producers, distributors, manufacturers and farmers to meet the demand for supplies, resources and food.
Some socialists may also blame the collapse in global oil prices for Venezuela's epic collapse and failure. It's partly true, but the problem with that argument is that places like Alberta and Finland didn't see their citizens eating rats and dogs and rioting in the streets. Alberta's economy depends heavily on oil and gas, but the province's diverse, free-market economy was able to sustain the global collapse in oil and remain civilized and prosperous. Despite massive job losses, bankruptcies and insolvency, Albertans haven't had to resort to beating dead cows to death or cooking up rodents and family pets.
If oil prices didn't collapse, Venezuela might be doing fine right now. However, global commodity prices fluctuate. When you monopolize and nationalize an entire industry that fuels your economy, shit hits the fan when prices collapse. To make matters worse, Venezuela's government implements price controls and various other socialistic policies which have made it impossible for farmers to grow crops, feed livestock and supply food.
The Washington Post:
Having attempted for years to defy conventional economics, the country now faces a painful reckoning with basic arithmetic.
“Last year I had 200,000 hens,” said Saulo Escobar, who runs a poultry and hog farm here in the state of Aragua, an hour outside Caracas. “Now I have 70,000.”
Several of his cavernous henhouses sit empty because, Escobar said, he can’t afford to buy more chicks or feed. Government price controls have made his business unprofitable, and armed gangs have been squeezing him for extortion payments and stealing his eggs.
Venezuela’s latest public health indicators confirm that the country is facing a dietary calamity. With medicines scarce and malnutrition cases soaring, more than 11,000 babies died last year, sending the infant mortality rate up 30 percent, according to Venezuela’s Health Ministry. The head of the ministry was fired by President Nicolás Maduro two days after she released those statistics.
The socialist fantasies swirling around in the heads of people like Jagmeet Singh and Bernie Sanders are not only unattainable, they've been tried more times than we should be proud of. Humans have tried so many times to achieve social and economic equality through force that any extraterrestrial civilization would consider us insane. Repeating the same mistake and always experiencing the same result is not only a sign of insanity, it's a sign of stupidity.
When Bernie Sanders tries to tell you that we should be more like Denmark or Finland, tell him he's right. Their free-market economies have been so successful that they can afford massive social safety nets and handouts for all of their citizens. On top of that, Denmark has no minimum wage. That inconvenient fact should be rubbed in every socialist's face whenever they talk about Denmark being a successful “socialist” country. Denmark is such a successful capitalist country, its people have completely rejected a government-mandated minimum wage.
It's time to start learning from our mistakes, not pointing to red-herrings like Denmark as examples. None of the places socialists like to talk about are true, socialist places. However, until media and journalists start correcting them, their lies will continue to spread and the myth of “successful socialism” will persist as a reason to give socialism another try in places like America and Canada.