by Rand Paul
The Austrian economist William L. Anderson describes “Stiglitz [as] a one-man advocacy band for growth of the state.” Stiglitz’s admiration for big government extends not only to Scandinavia but to Venezuela as well. Stiglitz thought that Chavez was successful “in bringing health and education to the people in the poor neighborhoods of Caracas, to those who previously saw few benefits of the country’s oil wealth.” Stiglitz also extolled Chavez for distributing income more equally. Like so many others who were infatuated with Chavez, Stiglitz is keeping mum now that Venezuelans are eating their pets and burning their currency for warmth.4
A useful question to ask if you are an American socialist: If Scandinavia is such a great place to live, are Scandinavians as an ethnic group doing better in Scandinavia or here in low-tax America?
The answer is intriguing. Scandinavians in the United States earn more than the average American and more than their counterparts in Scandinavia. Something is special about Scandinavia, but it turns out it isn’t their economic system at all. Sanandaji maintains that Scandinavian success is not about socialism, welfarism, or high taxes—but about Scandinavian work ethic and culture.5
The American left crows about long life spans and low infant mortality among Scandinavians as if these statistics are a result of socialism. The facts argue otherwise. As Sanandaji points out, “the admirable social outcomes pre-date the welfare state.” Not only do their quality-of-life statistics predate the growth of the welfare state, but these same quality-of-life numbers follow the Nordic people wherever in the world they migrate.
Indeed, Sanandaji empirically shows that historical “tables . . . show the global rankings of life span and child mortality—before the introduction of large welfare states in the Nordics”—were actually higher than the statistics under the welfare era. Sanandaji argues that the “good outcomes” have more to do with “the healthy diets and lifestyles of Nordic people” than socialism.
Sanandaji points out that life expectancy in Denmark today is 1.5 years longer than in America. However, the Danish lived 2.4 years longer than Americans well before they chose high taxes and a welfare state.6
In fact, before the advent of Scandinavian universal health care back in the early 1960s, Plunkett reports that “Norwegian men already lived to be 71 and Swedish men 72, compared to less healthy American men living only to 67.”
When universal health care was initiated in 1961, Scandinavians were already living several years longer than Americans. Maybe the correlation of welfare state and a long life is not what we thought.
Errors in assessing cause and effect lie at the root of the American left’s infatuation with the Scandinavian welfare state.
One of the strongest arguments against the Nordic model of a giant welfare state and high taxes being responsible for success is that Scandinavians seem to have the same success whether they are in Scandinavia or elsewhere.
Sanandaji writes that Scandinavian success here in America extends to “exponentially lower high-school dropout rates, much lower unemployment rates and even lower poverty rates.” So, if Swedish-Americans, Danish-Americans, and all other Nordic-Americans are better off both financially and in quality-of-life measures, maybe it’s time once and for all to dismiss with prejudice the phony argument of the left that Scandinavian success stems from socialism.
In fact, if you look at immigrants who migrate to Nordic countries, who do not share the cultural values of Scandinavia, they “fare worse than [immigrants] to the U.S. in regards to employment, self-reported health and the school result of their children.” Which would further argue that it is Scandinavian culture, not the welfare state, that is responsible for their success.7
A Scandinavian scholar once supposedly said to Milton Friedman, “In Scandinavia, we have no poverty.” Friedman quipped back, “That’s interesting, because in America, among Scandinavians, we have no poverty, either.”8
As Rich Lowry summarizes Sanandaji, “The descendants of Scandinavian immigrants have median incomes 20 percent higher than the US average, and their poverty rate is half the average.” In addition, Danish- and Swedish-Americans, according to Sanandaji, earn “50% more than their counterparts back at home,”9 and that’s not even accounting for the fact that Nordic-Americans also get to keep a much larger percentage of their income as our taxes are so much lower. Think about that. Danes who’ve come to America not only have higher incomes than the average American but have higher incomes than Danes who remain in Denmark. The same goes for Swedish-Americans (53 percent higher than native Swedes) and Finnish-Americans (59 percent higher incomes than native Finns).
We can learn from Scandinavian success. It just doesn’t appear to have anything to do with socialism or the welfare state.10
Only for Norway is the advantage of living in America small. Perhaps because of the massive oil wealth of Norway, the living standard of American Norwegians is only 3 percent higher than in Norway.
If you compare poverty and unemployment rates you also find that Scandinavians in America have lower poverty and unemployment than Scandinavians who remain in Scandinavia.
And it’s not just income success that separates Nordic-Americans from average Americans. This group of immigrants also graduates from high school at 14 percent above the American average.11
As Jeff Jacoby lays it out:
The real key to Scandinavia’s unique successes isn’t socialism, it’s culture. Social trust and cohesion, a broad egalitarian ethic, a strong emphasis on work and responsibility, commitment to the rule of law—these are healthy attributes of a Nordic culture that was ingrained over centuries. In the region’s small and homogeneous countries (overwhelmingly white, Protestant, and native-born), those norms took deep root. The good outcomes and high living standards they produced antedated the socialist nostrums of the 1970s. Scandinavia’s quality of life didn’t spring from leftist policies. It survived them.12
Sanandaji maintains that the Scandinavian success story stems from the fact that “Nordic societies have for hundreds of years benefited from sound institutions, a strong Lutheran work ethic and high levels of trust and civic participation.”13
For those who might want to discount Scandinavian culture as a cause for their success, José Niño responds: “These social [cultural] characteristics were more than random idiosyncrasies, they were part and parcel of a robust social fabric that facilitated Scandinavia’s initial economic success.”14
From all of this incredible data, it is impossible to argue that socialism or welfarism explains Scandinavian success. But it is also impossible and a mistake not to try to understand the cultural and capitalistic reasons for Scandinavia’s success.
After compiling this data and writing two books about it, Sanandaji concludes that Scandinavian success at home and upon emigrating is the result of cultural values such as work ethic and honesty.15
Chapter 18
Swedish College Is Free, but It’s Not Cheap or Universal
What about socializing college tuition? In Scandinavia tuition is free and today’s socialists love free. But nothing in life is truly free. As we’ve seen, citizens of the Nordic countries pay for “free” college tuition with the highest middle-class taxes in the world.
And before socialists go all wobbly in the knees for the Scandinavian system, realize that not everyone gets to go to college. If anything, Scandinavia and most of the world are a much harsher meritocracy than America when it comes to college admittance.
Take China, for example. College is “free” but to get there, you have to take perhaps the most difficult college entrance exam in the world: the Gaokao, a nine-hour exam taken over two days. Ten million Chinese high school seniors take the test each year, but only 0.2 percent score high enough to be admitted to a top college.1
In Denmark, there are strict limits on degrees. The state and the university system together regulate the number of degrees in each field. “Let’s say you want to be a political scientist, or a midwife, or a doc
tor, those are the most difficult educations to get into, and you would have to be in the top 10% to get into those fields. If your grades aren’t good enough, you will have to choose a field that is less competitive or else in high demand by the state,” says Annegrethe Rasmussen.
In fact, despite “free” tuition, the percentage of Scandinavians who matriculate into college is not any higher than in the United States. In Norway, for example, there are disparities in who goes to college. About 14 percent of children from the least educated families attend university compared with 58 percent of children from the most educated families. Statistics on admissions to American colleges is similar. Income statistics also largely follow the degree of education, so even in Norway there are still more college students from wealthier families than poor families.
John Larabell summarizes the situation well: “the problem isn’t just money, it’s about familial and cultural values. Also, since many blue-collar jobs pay quite well in Scandinavian countries, and the welfare state is almost paternal in its scope, there’s not as much incentive to actually go to college and pursue a degree.”
Larabell makes another point that is worth pondering: “If everyone gets a college education, such an education essentially becomes worthless, no better than a high-school diploma is now. Plus, under a tax-funded system, those who choose not to go to college, for any number of reasons, would still be paying for it, much the same way parents who put their kids in private schools in America still pay for the public schools via property taxes.”2
Many American students who are laden with enormous college debt and either no degree because they flunked out, or a worthless degree because they chose a worthless degree, would not be saddled with that debt anywhere else in the world. Not because of a lack of “free” tuition but because of stringent test scores that most of the rest of the world requires.
Interestingly, while tuition is free in Sweden, students still wind up with nearly as much debt as their American counterparts. The average Swede ends up with about $19,000 in debt while the average American has about $24,800 in debt. While the debt burden is less, more Swedes have debt than Americans. Eighty-five percent of Swedes finish college with debt, while about 50 percent of Americans graduate with debt.
How does that happen? Well, while tuition is “free,” rent, food, and entertainment are not. Sweden also has one of the highest costs of living in the world. Another reason that the Swedes graduate with so much debt is that in Sweden college students are expected to pay for their daily expenses.
So, if today’s socialists want to import Scandinavian “free” tuition, they must realize it comes with a price: extremely high middle-class taxes, the state gaining much more control over who gets to go to college and their academic field of study, and college debt not markedly dissimilar from American college debt.3 Nothing is free.
Part III
A Boot Stamping on the Human Face Forever—Socialism and Authoritarianism
Chapter 19
Socialism Becomes Authoritarianism
One of the greatest ironies of modern political history is that as socialists around the world rose up to overthrow authoritarian regimes, they ultimately replaced them (despite their promises to establish free democracies) with authoritarian regimes of their own.
The overthrow of Batista in Cuba gave us Castro. The overthrow of Somoza in Nicaragua gave us the Sandinistas. The overthrow of the czars gave us Stalin, and on and on. Each time a revolt of the “people” promised the manna of socialism and justice. And each time the result was rule by an elite that degenerated into rule by the few or even rule by one, often with the democratic title of president but with the ominous subtitle—“for life.”
Socialists want to argue that each case from Zimbabwe to Nigeria to Equatorial Guinea to North Korea is an anomaly or that none of these historical examples are “real” socialism. And yet the “liberators” time and time again call themselves socialists.
So, before we sign on with any of the new American socialists’ campaigns, it would behoove us all to reexamine the legacy of historical socialism. Despite popular belief to the contrary, violence and authoritarianism are an inevitable part of socialism.
The only way to avoid confronting this reality is to dress socialism up in promises of prosperity and safety, counting on the public’s ignorance to pave the way. There’s a great deal of irony that two months after Victory in Europe on May 8, 1945, less than two months after the defeat of Nazi socialism, the inspirational leader of England, Winston Churchill, was shockingly defeated by the socialist Clement Attlee. Attlee headed the democratic socialist party known as the Labour Party.
The very same people who had fled to the bomb shelters and lost hundreds of thousands of their young men to a Nazi socialist regime turned on a dime and voluntarily elected a socialist. How could that happen? The only possible answer is ignorance, ignorance of the ideology that founded the Nazi Party, and ignorance that the socialism the British were embracing could lead to authoritarianism.
This willful disconnect between socialism and authoritarianism was promoted in the public discourse by naive intellectuals. George Orwell, who most famously roasted Stalin’s socialism in his book Animal Farm, was nevertheless a self-identified socialist. Neither Hitler nor Stalin was condemned for their socialism, only for their methods. (Not all were blind, of course. Socialist George Bernard Shaw, author of the feminist play Pygmalion, did not deny Stalin’s crimes—rather he defended them.)1
Attlee’s democratic socialism led to the nationalization of major industries, including coal, electricity, steel, and the railways. Attlee and his socialist band also created the British socialized health-care service. “But no concentration camps!” protest leftists. Surely the British welfare state must be seen as a win. Right?
The absence of death camps hardly proves that socialism in any form is benign. The degree of violence necessary depends on the degree of state ownership and control. So, yes, the owners of the steel, coal, electrical, and rail companies were threatened with jail if they refused to allow the state to take their companies, but there were not concentration camps. If you want to abolish all private property, the resistance intensifies, and camps, truncheons, and state-sanctioned violence become necessary.
George Reisman is an economist who received his Ph.D. under Ludwig von Mises, the famous Austrian economist. Socialism eventually requires, Reisman argues, “a massive act of theft—the means of production must be seized from its owners and turned over to the state. Such seizure is virtually certain to provoke substantial resistance on the part of the owners, resistance which can be overcome only by use of massive force.”2
Using the apparatus of state force to take private property does not seem to bother modern self-proclaimed socialists like New York City’s Bill de Blasio. In a New York magazine interview, he laments that “our legal system is structured to favor private property.” De Blasio dreams of a time when society takes heed of its “socialistic impulse” to plan and control property “in accordance with [the people’s] needs.”3
De Blasio is not at all embarrassed to admit his desire for a “city government [that] would determine every single plot of land, how development would proceed. And there would be very stringent requirements around income levels and rents. . . . [along with] a very, very powerful government, including a federal government, involved in directly addressing their day-to-day reality.”4
At least in New York City, the hope that democracy serves as a check and a balance against government confiscation of property is proving to be wrong.
Advocates for democracy argue that as long as the right to vote continues to exist, people typically will resist the complete abolition of private property. Let’s hope this is true, and that de Blasio will be voted out of office before the outright confiscation of private property happens.
If democracy is a check against going “too far” with socialism, that may explain why when “complete” or “real” socialism arri
ves, it requires so much force to confiscate property that the majority rebels. And why “complete” socialism (with the abolishment of private property) is always accompanied by the destruction of democracy at the hands of a tyrant.5 So perhaps we should not be at all surprised that, while speaking to a group of union workers in Miami in June of 2019, Mayor de Blasio, pumping his fist righteously in the air, shouted the infamous slogan of murderous Marxist Che Guevara: “Hasta la victoria, siempre!”6
While the British and the Scandinavian democracies have flirted with socialism, they’ve never really had the temerity to use the force necessary to achieve full socialism. As Reisman puts it, “The Communists were and are willing to apply such force, as evidenced in Soviet Russia. Their character is that of armed robbers prepared to commit murder if that is what is necessary to carry out their robbery. The character of the Social Democrats, in contrast, is more like that of pickpockets, who may talk of pulling the big job someday, but who in fact are unwilling to do the killing that would be required, and so give up at the slightest sign of serious resistance.”7
Britain’s cherished democratic values check the full abolition of property and Britain remains protected too by her history of limiting central power. For more than seven hundred years, since the barons gathered at Runnymede and forced limitations on the king, the British have had due process of law. So, instead of Nazism or Bolshevism, England got Scandinavian-style welfarism, a welfare state with high taxes and public debt but no abolition of freely floating prices, the stock market, or most private ownership of business. European democracies, at least so far, have been unwilling to embrace the violence necessary to confiscate and redistribute all property.
The allure of socialism’s free goodies, though, continues to find appeal. “Free” health care turned out to be very popular in England. After all, people like “free” stuff. However, “free” health care wasn’t exactly free and led to overuse and enlargement of the debt and subsequent tax hikes. The National Health Service became famous for its waiting lines. Health care was essentially rationed by putting the excess demand (sick patients) in a queue.