In Dostoyevski’s The Brothers Karamazov, Father Zossima tried to counsel a distraught woman by encouraging her to embrace an “active love” by helping others. She unfortunately failed to follow his advice, settling into an abstract “love for humanity.” Father Zossima called her’s a “love in dreams” and noted that “love in action is a harsh and dreadful thing compared with love in dreams,” for when daydreaming, or imagining how we can help “humanity,” we slip into a non-existent future that helps no one. Consequently we label “utopian” those societies designed for beings quite unlike our species. Nima Sanandaji, in Debunking Utopia: Exposing the Myth of Nordic Socialism (Washington, D.C.: WND Books, c. 2016), reminds us, with ample facts, that socialism forever fails simply because it cannot succeed in the real (as opposed to the imaginary) world. He makes three important points: 1) post-WWII Scandinavia’s economic success results from the region’s cultural roots rather than socio-political structures; 2) trying to duplicate Nordic economic structures elsewhere cannot but to fail; and 3) “democratic socialism” is now collapsing even in Scandinavia due to its intrinsic flaws—indeed, “the days when the Nordic countries could actually be socialist are long gone” (#2333).
Sanandaji’s family emigrated from Iran to Sweden in 1989, and he personally enjoyed all the benefits of that nation’s generous (socialistic) welfare state, ultimately finishing a Ph.D. in economics, publishing 20 books and scores of scholarly papers. After years of carefully examining the “democratic socialism” of Nordic countries (Sweden, Norway, Finland, Iceland, and Denmark), he understands why it’s seriously flawed and now imploding. Indeed, though American socialists (e.g. Bernie Sanders) and progressives (e.g. President Obama) naively laud them, today “only one of the five Nordic countries has a social democratic government” (#107). In various ways Scandinavians seem to be moving away from a failed model.
Without question the Nordics enjoy many good things—longevity, education, health care, women’s rights, generous vacations, etc. But the good life there evident, Sanandaji insists, results mainly from Nordic culture rather than socialist structures. They all “have homogenous populations with nongovernmental social institutions that are uniquely adapted to the modern world. High levels of trust, a strong work ethic, civic participation, social cohesion, individual responsibility, and family values are long-standing features of Nordic society that predate the welfare state. These deeper social institutions explain much of the success of the Nordics” (#337). Imagining the United States—or African or South American countries—could duplicate the Nordic model without the Nordic culture is simply wishful (and extraordinarily frivolous) thinking. Still more: it’s important to acknowledge that many of the world’s finest places, enjoying the highest level of well-being, are places like Switzerland and Australia which differ markedly from the Nordics.
For instance, using one of the main criteria for national well-being—longevity—we find Japan, Switzerland, Singapore, and Australia at least as good as the Nordics. “Instead of politics, the common feature seems to be that these are countries where people eat healthily and exercise” (#423). Rather than thinking welfare states make everyone healthy through universal health care, we should understand the life-style ingredients that truly matter. Then consider the celebrated economic “equality” praised by the likes of Bernie Sanders. Sanandaji’s brother Tino (also an economist) notes: “‘American scholars who write about the success of the Scandinavian welfare states in the postwar period tend to be remarkably uninterested in Scandinavia’s history prior to that period. Scandinavia was likely the most egalitarian part of Europe even before the modern era’” (#521).
In part this grew out of the region’s agrarian roots. For centuries hard-working farmers had survived in an unusually difficult environment. Necessarily they forged a culture “with great emphasis on individual responsibility and hard work” (#630). They also secured property rights and embraced a market system that enabled them to thrive as independent yeomen committed to the “norms of cooperation, punctuality, honesty, and hard work that largely underpin Nordic success” (#659). These norms were then brought to the United States by Scandinavian immigrants in the 19th century, and we find transplanted Swedish-American and Norwegian-American communities distinguished by conscientious, law-abiding, hard-working people. Consequently they thrived and easily entered the mainstream of their new nation. Today the eleven million Americans who identify themselves as Nordic are doing even better than their kinsmen still living in Scandinavia and “have less than half the average American poverty rate” (#830). Culture, not economics, explains the difference!
Rather than helping improve Scandinavia, Sanandaji says, socialism has actually harmed the region! As an article in “The Economist explains: ‘In the period from 1870 to 1970 the Nordic countries were among the world’s fastest-growing countries, thanks to a series of pro-business reforms such as the establishment of banks and the privatization of forests. But in the 1970s and 1980s the undisciplined growth of government caused the reforms to run into the sands.’ Around 1968 the Left radicalized around the world . . . . The social democrats in Sweden and other Nordic countries grew bold, and decided to go after the goose that lay the golden eggs: entrepreneurship” (#1104). Implementing “democratic socialism” they targeted and taxed the “rich”—the businessmen, the wealth-creators, the very folks responsible for their nations’ prosperity. Though Scandinavian countries enjoyed remarkable prosperity immediately following WWII, by becoming welfare states they struggled for the next half-a-century to preserve it. “Third Way socialist policies are often upheld as the normal state Swedish policies. In reality, one can better understand them as a failed social experiment, which resulted in stagnating growth and which with time have been abandoned” (#1127).
Rather than celebrating the glories of socialism, the Nordics have learned a sad lesson and recently turned toward a more free market economy. They grew “rich during periods with free-market policies and low taxes, and they have stagnated under socialist policies. Job growth follows the same logic” (#1250). Small government and low taxes spell prosperity; intrusive government and high taxes make for slow (or no) growth. Recognizing this—and retreating from state-run monopolies—educational and health care facilities have been “opened up in Sweden as voucher systems, allowing for-profit schools, hospitals, and elderly care contorts operate with tax funding” (#1458). Such moves “drove up wages, evident by the fact that these individuals gained 5 percentage points’ higher wages than similar employees whose workplaces had not been privatized” (#1485).
Sanandaji has written this book to warn Americans who look favorably on “democratic socialism” in a nation “only very marginally more economically free than Denmark” (#2348). Noting that Franklin D. Roosevelt was the “architect of the American welfare state,” he then reminds us that FDR also warned: “‘The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is in violation of the traditions of America’” (#1512). Recently a German scholar, Friedrich Heinemann, has validated FDR’s concern regarding “moral disintegration” in welfare states. Data from the World Value Survey indicate “a self-destructive mechanism exists” in them which dissolves norms. This is sadly evident, Sanandaji says, in Nordic lands, whose celebrated “work ethic” has dissipated. Many young Scandinavians work less diligently than their parents, fail to form solid families, and falsely claim to be “sick” to avoid work when it suits them.
Debunking Utopia should give us Americans additional pause as we endeavor to shape our nation’s immigration policies as well as its economy, for Sanandaji dolefully describes the mounting problems Sweden faces as a result of opening the border to refugees from Muslim nations. “Sweden is in a ditch because many politicians , intellectuals and journalists—on both the left and the right—have claimed that refugee immigration is a boon to the country’s economy and that large-scale immigration is the only way of sustaining the welfare state. . . . . But of course, serious research has never shown that refugee immigrants boost the Swedish economy. The truth is quite the opposite” (#2216). In truth, poverty and crime and educational problems have accelerated as waves of immigrants have washed over the country.
In fact, Americans should look seriously at their own traditions and seek to revive them rather than fantasizing about any form of “democratic socialism.” As an old country song declares: “there ain’t no living in a perfect world,” and “the true lesson from the Nordics is this: culture, at least as much as politics, matters. If the goal is to create a better society, we should strive to create a society that fosters a better culture. This can be done by setting up a system wherein people are urged to take responsibility for themselves and their families, trust their neighbors and work together. The Nordic countries did evolve such a culture—during a period when the state was small, when self-reliance was favored. For a time these societies prospered while combining strong norms with a limited welfare state, which was focused on providing services such as education rather than generous handouts. Then came the temptation to increase the size of the welfare state. Slowly a culture of welfare dependency grew, eroding the good norms” (#2395). Only by resurrecting those good norms—and abandoning the failed welfare state—can Scandinavians or Americans truly prosper.
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“Two decades ago, New Zealand went through a dramatic transformation, from a basket case welfare state saddled with crushing public debt, rampant inflation, and a closed and moribund economy, to what is today widely regarded as one of the freest and most prosperous countries in the world. This is the story of how that happened.” So Bill Frezza sums up his New Zealand’s Far-Reaching Reforms: A Case Study on How to Save Democracy from Itself (Guatemala, Guatemala: The Antigua Forum, c. 2015). Following WWII—and before such reforms—as more and more money was printed to fuel more and more welfare programs, New Zealand graphically illustrated H. L. Mencken’s quip: “Every election is a sort of advance auction sale of stolen goods.” Indeed, Roger Muldoon won election as prime minister in 1975 by running on a platform described by critics as a “denial of economic reality accompanied by bribery of the voters.”
But all this changed through reforms orchestrated by two politicians (Roger Douglas and Ruth Richardson) representing opposing parties, who made “common cause in a fight against their own party leaders” to save their nation from corrosive inflation and ultimate bankruptcy in the late 1980s and early 1990s. They both demanded “honest and open accounting” wherewith to tell the truth regarding the nation’s condition. “If private businesses kept their books the way most governments keep their books, our jails would be full of CEOs” (#361) But the reformers determined: “The country was going to be run more like a successful business than a public piggy bank” (#554). Richardson especially focused on reforming the educational system, turning it to charter schools answerable to the parents. Douglas worked to reduce corporate and personal income taxes, eliminate inheritance taxes, and establish a consumption tax. Since they eliminated government sponsored enterprises, such as Fannie Mae and Freddie Mack in the U.S., New Zealand didn’t suffer the housing bubble that burst and devastated America in 2008.
Consequently, “New Zealand enacted its most lasting reforms when advocates for efficient government, free markets, free trade, sound money, and prudent fiscal policy came together” and legislative acts were passed that “forever changed the way New Zealand’s government did business” (#248). Freeza explains the important acts and shows how they changed the country. Government agencies were privatized and compulsory union membership eliminated. “All civil service employees were moved from job-for-life union contracts and a seniority based advancement regime to individual employment contracts and a merit based regime” (#331). Opposition to such changes was inevitably intense. “As a poster child for the bitter medicine being administered, Ruth became the most hated politician in New Zealand. Effigies were burned in the streets, protesters poured a pot of blue paint on her (she saved the ruined dress for a charity auction), and police had to protect her on her jog to work every morning” (#549).
But the reforms worked and made a lasting difference. The 2014 Index of Economic Freedom ranks “New Zealand fifth in the world, behind Hong Kong, Singapore, Australia, and Switzerland with ratings of 90 percent or higher for rule of law, freedom from corruption, business freedom, and labor freedom” (#623). The nation’s GDP increased fourfold while the national debt shrunk from $25 billion in 1993 to $15 billion in 2007. Trade, especially with China, has flourished. In retrospect, Freeza says (wondering if the New Zealand story can be duplicated): “The list of success factors required for a democracy to flourish economically is not long: honesty, integrity, transparency, accountability, efficiency, thrift, prudence, flexibility, freedom, leadership, and courage. Does anyone care to stand up and deny that these are virtues not just of good government but of a good life? Although universally acclaimed by economists, philosophers, and theologians, why are these virtues so hard to find in governments and politicians?” (#668). Unfortunately, politicians such as Roger Douglas and Ruth Richardson, willing to risk losing elections and incurring criticism, rarely appear. But without them majoritarian democracies will, it seems, sadly enough, generally follow a destructive path.
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In The Problem with Socialism (Washington, D.C.: Regency Publishing, c. 2016), Thomas DiLorenzo notes that a recent poll showed “43 percent of Americans between the ages of eighteen and twenty-nine had a ‘favorable’ opinion of socialism” and preferred it to capitalism (#85). Another poll indicated 69 percent of voters under 30 would support a socialist for President—as Bernie Sanders’ near victory in the Democrat Party primaries certainly illustrated. Misled by a multitude of educators, these young folks fail to realize G.K. Chesterton’s insight: “the weakness of all Utopias is this, that they take the greatest difficulty of man [i.e. original sin] and assume it to be overcome, and then give an elaborate account [i.e. redistribution of wealth] of the overcoming of the smaller ones. They first assume that no man will want more than his share, and then are very ingenious in explaining whether his share will be delivered by motorcar or balloon” (Heretics). Or, as Lady Margaret Thatcher famously quipped: the ultimate problem with socialists is they finally run out of other people’s money to spend.
Though socialism in the 19th century meant the “government ownership of the means of production,” in the 20th century it morphed into redistributive measures designed to eliminate all sorts of inequalities through progressive taxes and regulatory edicts. Inevitably socialists want government to control as many industries (e.g. health care), confiscate as much land (e.g. national forests), and destroy capitalism “with onerous taxes, regulations, the welfare state, inflation, or whatever they thought could get the job done” (#127). Also inevitably, nations embracing socialism impoverish themselves. Africa bears witness to the fact that 40 years of socialistic experiments made them “poorer than they had been as colonies” (#183). Indeed, one of DiLorenzo’s chapters is entitled: “socialism is always and everywhere an economic disaster.” A glance at American history shows how socialistic endeavors in colonial Jamestown utterly failed. But, Matthew Andrews says: “‘As soon as the settlers were thrown upon their own resources, and each freeman had acquired the right of owning property, the colonists quickly developed what became the distinguishing characteristic of Americans—an aptitude for all kinds of craftsmanship coupled with an innate genius for experimentation and invention’” (#255). Socialism, whether of the dictatorial or majority-rule democratic variety, is all about planning. It’s preeminently “the forceful substitution of governmental plans for individual plans” (#588). Planned economies always look wonderful to the planners. But the plans inevitably founder when implemented because they run counter to human nature.
Socialists further violate human nature by seeking to dictate economic equality (e.g. “free” education, health care, housing, food, etc.) which “is not just a revolt against reality; it is nothing less than a recipe for the destruction of normal human society,” as became brutally evident in Russia and China (#374). By eliminating capitalism’s division of labor and freeing each person to cultivate his own talent as well as his own garden, socialism (Leon Trotsky believed) would enable the perfection of our species so that the “human average will rise to the level of an Aristotle, a Goethe, a Marx.” That such never happens—indeed could never happen—effectively refutes such utopianism. “How remarkable it is that to this day, self-proclaimed socialists in academe claim to occupy the moral high ground. The ideology that is associated with the worst crimes, the greatest mass slaughters the most totalitarian regimes ever, is allegedly more compassionate that the free market capitalism that has lifted more people from poverty created more wealth, provided more opportunities for human development, and supported human freedom more than any other economic system in the history of the world” (#697).
The intrinsic deficiencies of socialism are also on display in those “islands of socialism in a sea of capitalism—government-run enterprises like the U.S. Postal Service, state and local government public works departments, police, firefighters, garbage collection, schools, electric, natural gas, and water utilities, transportation services, financial institutions like Fannie Mae, and dozens more” (#500). Though there may very well be practical reasons for their existence, they are “vastly more inefficient, and offer products or services of far worse quality than private businesses” (#508). Economists generally hold “that the per-unit cost of a government service will be on average twice as high as a comparable service offered in the competitive private sector” (#508). That privately owned and operated firms like UPS and FedEx prosper, while the USPS needs abiding subsidies, surprises no economist. Nor does it surprise anyone that USPS employees “earn 35 percent higher wages and 69 percent greater benefits than private industry employees” (#558).
This problem ultimately led to recent changes in Scandinavia, where free-market reforms are currently reversing decades of “democratic socialism.” The Swedish Economic Association recently reported “that the Swedish economy had failed to create any new jobs on net from 1950 to 2005.” Consequently, Sweden is actually “poorer than Mississippi, the lowest-income state in the United States” (#880). Within a half-century, the nation slipped “from fourth to twentieth place in international income comparisons.” It has simply proved “impossible to maintain a thriving economy with a regime of high taxes, a wasteful welfare state that pays people not to work and massive government spending and borrowing” (#855). Of Denmark’s 5.5 million people, 1.5 million “live full-time on taxpayer-funded welfare handouts” (#890). One Swedish economist, Per Byland, says giving out “benefits” and thereby “‘taking away the individual’s responsibility for his or her own life, a new kind of individual is created—the immature, irresponsible, and dependent.’” Thus the celebrated, carefully planned Swedish “welfare state” has unintentionally created multitudes of “psychological and moral children’” (#872).
Sadly enough, DiLorenzo concludes, socialism ultimately harms the very folks its designed to help—the poor. It’s a “false philanthropy.” And it should be resisted wherever possible.