Socialism and Capitalism in Venezuela and Norway

Does AOC and Bernie Sanders Represent a Norwegian or Venezuelan Future for the US?

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Caracas, Venezuela’s capital city

What is Socialism?

The first fundamental problem is agreeing on what socialism is. When the success of Scandinavian countries are pointed to the American right has four typical counter points:

  1. All their wealth was produced back when they were capitalist and they have been going downhill ever since they went socialist.
  2. Scandinavians themselves, don’t call themselves socialist.
  3. Scandinavia is social democratic, not socialist, which is totally different.

Public Sector Employment

While we can disagree on the specifics, it should not be controversial to claim that in a socialist society, more people work in the public sector than in the private sector.

Government Run Companies

In fact Singapore has a rather large public sector. Many of its top companies are government owned.

Taxes

How about the tax burden. Conservatives like to talk about how socialist countries are high tax.

Political History

If we look at the political history of Norway and Venezuela, that is where we see the really big difference. Norway clearly has a more socialist political history. Since 1900s Venezuela has had 6 different occasions where the military has sized power and suspended democracy. If you go further back in history, there are even more cases.

Challenge: Name a Metric Where Venezuela is More Socialist Than Norway?

So I have gone through numerous easy to measure metrics which by people tend to judge a country as socialist or socialistic. In not a single one of them did Venezuela “excel”.

  1. Lack of transparency.
  2. Short term thinking and populism.

The Criminal Nature of the Venezuelan Government

A long running thread through the history of many Latin-American countries including Venezuela is that of weak institutions and populism. Leaders who abuse and break the law. Just look at the sheer number of military take over, use of political violence and extreme corruption. None of this is unique to Hugo Chavez and his people.

Will Bernie Sanders be a new Hugo Chavez?

No, because Bernie Sander’s is a not a short term thinking populist. Bernie Sander has far more in common with Nordic social democrats who implemented socialist inspired reforms gradually and always tried to remain financially responsible.

Was Nordic Wealth Created Before Socialism?

Back when I first wrote this article I actually forgot to address this point, so I am tacking it on at the end. A frequent idea among American conservatives is that capitalism created all Nordic wealth and then socialism just coasted along until on the foundations built by capitalism, until socialism wrecked the economy and capitalism had to jump in and fix it again.

The Swedish Case

Sweden is perhaps the easiest case to study here because it was not part of any world wars and social democrats have been in power for a very long time there. The first social democrat got into power in the 20s but it was in 1932 with prime minister Per Albin Hansson that decades of Social Democratic dominance in Swedish politics began. That dominance was almost complete until 2006.

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Swedish GDP per capita relative to the worlds GDP per capita.

Swedish Social Democracy vs Democratic Socialism

Of course conservatives will try to counter that social democracy has nothing to do with socialism and is just free wheeling capitalism with social programs on top of it. Why else does Sweden top rankings on economic freedom?

Geek dad, living in Oslo, Norway with passion for UX, Julia programming, science, teaching, reading and writing.

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