Going south
The Democrats’ socialist agenda looks a lot more like Venezuela than Scandinavia
ONE might think that our experience with the coronavirus has given Americans a scary foretaste of radical socialism. Empty shelves, shortages and limits on basic commodities, economic stagnation, and all of this combined with a sustained assault on our privacy, our freedom of assembly and our religious freedom. We have endured on a temporary basis what some socialist societies typically provide on a permanent basis.
Yet the socialist gang is still out there — Bernie and the Squad — touting the virtues of socialism. And they’re pulling the Democratic Party in their direction, with Biden now climbing on the free college bandwagon and embracing the socialist agenda packaged in the Green New Deal. Democratic socialists like Bernie and Alexandria Ocasio-Cortez insist that their brand of socialism is modeled not on the failed socialisms of the past, but rather on the one place where socialism seems to work: Scandinavia.
But upon examination the Scandinavian or Nordic model is not what the Left is proposing here. Scandinavian countries are pro-capitalist in wealth creation and socialist in wealth distribution. In the words of Forbes columnist Jeffrey Dorfman, “They don’t kill the goose that lays the golden eggs.” This is a sharp contrast with what Sanders, Warren and other leading Democrats advocate in this country.
Corporate taxes in Scandinavian countries are around 20 percent, no higher than in the United States. There is no minimum wage in Scandinavia. Companies can hire and fire workers for any reason. With one exception — Norway — there is no wealth tax. Nordic countries also have no inheritance taxes. No Scandinavian country imposes financial transaction fees of the type that Sanders and Warren have proposed for Wall Street.
Yes, Scandinavian countries have a large welfare state that provides guarantees for college education, health care and retirement. But the key point is that they impose high rates of taxation on the entire society to pay for those guarantees. In America you have to earn $400,000 to pay the top marginal rate of just under 40 percent; Scandinavian countries impose top rates of 50 to 70 percent and they kick in around $70,000 in annual income.
In addition, Scandinavian countries impose a 25 percent VAT consumption tax. Economists recognize that consumption taxes are regressive. The burden falls more heavily on the poor and middle class, because the poor and middle class pay proportionately more for consumption than the rich. Far from a policy of “soak the rich,” Scandinavian tax policy is undiscriminating in that it soaks the whole society.
No Scandinavian country demonizes its rich and successful citizens the way that socialists and progressives do here. Hardly anyone in Sweden, Denmark or Finland rages against “millionaires and billionaires.” The basic principle of Scandinavian socialism is “we’re all in this together.” Scandinavia is far removed from George Bernard Shaw’s maxim that “Any country that robs Peter to pay Paul can always count on Paul’s support.”
Yet that principle is precisely what drives the socialist Left in this country. The appeal of socialism, especially to young people, is the appeal of “free stuff.”
When Democrats pitch free college it’s not because college is actually free but because they intend to force someone else to pay for it. In Scandinavia, by contrast, citizens never speak of “free college” or “free health care” because they know who is paying for it: They are!
The American Left’s socialist model is in fact more akin to Venezuela than Scandinavia. Over the years many on the political and cultural left, from Jimmy Carter to Sean Penn to Michael Moore to Noam Chomsky, have toured Venezuela and praised aspects of the socialist regime.
As with the socialist Left here, Venezuelan socialism is based on demonizing the rich. Hugo Chavez openly boasted about expropriating the resources of successful entrepreneurs; indeed he was filmed taking their stores and businesses on his national television show. No surprise — many business owners fled the country, creating many of the shortages of basic goods that now plague that country. What Chavez achieved through appropriation, the Democratic Left here would replicate through confiscatory taxation.
Venezuelan socialists are also identity socialists — marrying socialist economic programs and identity politics. Socialist activists in Venezuela pull down Columbus statues and blame inequality on the white man. And Chavez, like some Democratic presidential candidates here, always highlighted his black and Native American roots. Once again, this sort of racially charged messaging is simply absent from the socialist policies that drive Scandinavian countries.
All the while, Venezuelan socialists are getting rich off socialism. The images we see on television of starving Venezuelans convey only half the truth. The reality is that the Chavistas — Venezuelans who are loyal to the socialist regime — are living high on the hog. The current ruler Maduro goes on European soirees with his socialist top guard, and Hugo Chavez’s daughter is the richest woman in Venezuela with a net worth exceeding $1 billion.
Bottom line: The Left keeps telling us it wants to take us to Stockholm, but its policies point in the direction of Caracas. Venezuela was once a prosperous country, but its divisive brand of socialism destroyed it. We can’t allow the same to happen here.