Democrats, it's time to give up your obsession with Denmark
Are high taxes and huge public subsidies the key to utopia? Maybe not.
As Rocket Raccoon from Guardians of the Galaxy described himself, "Ain't no thing like me, except me." Same goes for America, an ethnically diverse, immigrant nation of 320 million with the largest, most technologically advanced economy on the planet. Ain't no country like the United States, except the United States. And certainly, as Hillary Clinton noted in this week's Democratic presidential debate, "we are not Denmark" — a nation the size of Maryland with the population of Atlanta, nearly 90 percent of Danish descent.
We are also not Norway or Sweden, likewise small, ethnically homogeneous nations. Yet many progressive Democrats, including Clinton's rival Bernie Sanders, argue America should model itself on Scandinavia and its egalitarian social democracies. "I think we should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people," Sanders said during the debate, prompting Clinton's retort.
The main lesson to learn, progressives suggest, is that big government — really high taxes and a large, income-redistributing welfare state — can work fabulously. After all, Scandinavia is just about the happiest place on Earth, according to the World Happiness Report. (Darn you, top-ranking Switzerland and your tasty cheese and chocolate!) And the most recent World Economic Forum competitiveness rankings place all the Scandinavian economies in the top 12 globally.
So there you go: 60 percent top tax rates and generous family leave policies haven't created an Orwellian hellscape — it's the opposite, but, you know, with fjords. Economic growth and equality can be compatible. So feel the Bern, IKEAmerica!
It's a great story, no doubt. So great, in fact, that if northern Europe's progressive paradise didn't exist, American progressives would have to invent it. Without the Nordics, the left would be hard up for a big-government success story. Who would they point to? France, which is 29th in the happiness index just ahead of Argentina, and 22nd in the competitiveness rankings, down near Saudi Arabia?
But there's more to the Scandinavian story than progressives suggest. For starters, Scandinavians had pretty good lives even before the ginormous expansion of their welfare states. As Swedish researcher Nima Sanandaji notes in the paper, "Scandinavian Unexceptionalism," Norway had the highest life expectancy among advanced economies in 1960, with Sweden and Denmark right behind. And "most of the shift towards greater equality happened before the introduction of a large public sector and high taxes."
This suggests the particulars of Scandinavian culture have a big role to play in creating their happy, healthy societies. It's a thesis bolstered by the fact that the poverty rate among U.S. descendants of Nordic immigrants is half that of Americans overall. Can we really turn all of America into Minnesota?
What's more, even though Sanders may be reluctant to call himself any sort of capitalist, Scandinavians have become far more market-friendly over the past 20 years. Their economies all now have corporate tax rates lower than the United States. And they score highly in the conservative Heritage Foundation's Economic Freedom Index, especially when it come to government regulation. They're also free traders, unlike Sanders, who opposed the North American Free Trade Agreement in the 1990s and the Trans-Pacific Partnership today.
Look at it this way: If Denmark or Sweden were running for the Democratic presidential nod, they would have about as much chance of winning as Jim Webb. And "Big Oil" Norway? It would have no chance at all.