What is Modern Scandinavian Socialism in 2020?

Many look to Scandinavia for answers about socialism, so what exactly is the ideology and thinking of modern Scandinavian socialist parties today?

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Modern apartment building in Tjuvholmen, Oslo Norway

Are Scandinavian countries socialist?

Yes and no. Strictly speaking all Scandinavian countries have a capitalist economy, however many economists in Norway will characterize our economies as mixed-economies rather than socialist or capitalist. Sometimes our system is referred to as social-democratic. Although not all parties in Scandinavia like this designation since not all parties in Scandinavia are social-democratic parties.

Is Social Democracy Related to Socialism?

Many people today are confused by relation between social-democracy and socialism. While modern social-democratic parties don’t speak much about socialism, all of them have a socialist heritage. Because many people are not aware of this today, even Scandinavians I am providing quotes from the party program of the Norwegian Labour party published in 1981. The very first line says:

Public Sector Employment

A significant part of service and goods production in Norway does not happen within a purely capitalist system. E.g. in the US only 15.8% of employees work in the public sector. Here are the numbers for Scandinavian countries:

  • Denmark: 31.4%.
  • Sweden: 26%

Government Ownership

The Norwegian government owns 33% of the Norwegian stock exchange. This excludes government owned companies not listed on the stock exchange.

  • Hydro-electric power plants
  • Banks
  • Aluminum production
  • Transportation
  • Defense industry
  • Liquor stores (to limit alcohol consumption)

Taxes

Norway has the third highest tax rate as percentage of GDP at 54.8%. Again this is higher than most self declared socialist countries.

Public Goods

The government does not merely pay people to go to college and hospital, but both are actually owned and run by the government. Norway’s health care system is e.g. not like the Canadian one which is a single payer system. The Canadian system is basically “Medicare for all.” That means private companies run hospitals but the government pays for treatment. In Scandinavia this goes a step further. The government also owns and runs the hospitals.

Scandinavian Countries are Rated Among the Most Economically Free. Explain That!

If you Google Scandinavia and socialism you will see this pop up as a very popular rebuttal of Scandinavian Socialism. Keep in mind that I have characterized Scandinavia as mixed economies and not socialist. However the argument being attempted to be made here which usually cites the Heritage Foundation Economic Freedom Ranking is that Scandinavian countries cannot possibly have any socialist elements given their high Economic Freedom ranking.

Rule of Law

Yes that is right, in their evaluation of economic freedom the Heritage Foundation includes “Rule of Law.” The implication thus when saying high economic freedom means less socialist, is that the more socialist you are, the less rule of law exist. That I hope you dear reader can agree, is a highly dubious claim.

Government Size

In this case Ecuador does a bit better because tax burden and government spending is lower in Ecuador than in Norway. These metrics are actually somewhat fair in terms of judging degree of socialism. However the third metric which pushes Norway up a lot makes no sense. Norway gets 97.3 points on fiscal health, near the top, while Ecuador scores lower with 62.3 on fiscal health. This has to do with how well you balance budgets. Again what on earth does this have to do with Economic freedom, Capitalism and Socialism? Are we to deem countries with more reckless spending as more Socialist, while being frugal automatically makes you an upstanding Capitalist country?

Regulatory Efficiency

Norway does a lot better in this category than Ecuador but the rational is not quite clear. I looked at another country El Salvador for comparison which also scores low.

Will Socialists Ban All Private Property and Government Take Over All Business?

There is a common perception that all forms of socialism is equal to to Soviet style socialism. However that is only one form of socialism and Scandinavian socialism as championed by socialist parties in Scandinavia since the 30s have always championed a different approach.

  • SV (Socialists)
  • AP (Social Democrats)
  • large public sector
  • high taxes
  • strong unions
  • government ownership of key industries
  • Healthcare
  • Infrastructure
  • Large Banks and Finance Institutions
  • Large Companies related to extraction of natural resources and Energy

Does a Socialist Economy have Free Markets?

In previous question we saw that even Norway’s Marxist party would like to allow some markets.

What is the Role of Planned Economics in a Socialist State?

So unlike popular conception, socialists today are not seeking a complete planned economy. However they want parts of the economy based on planned economics. Why is that? What do they see as the benefits?

  1. Public sector tasks like education, health care and childcare.

Problem with Private Schools

The second point requires some elaboration. You can research this yourself, but one typically finds that e.g. private education tends to lead to grade inflation. In Norway e.g. we have some private high schools. People only go their to get high grades. They almost exclusively specializing on teaching to the test. Grades in Norway are composed of grades from local tests and final exam. Final exam grading is done by outsiders. If a school grades well, then a student will get very similar score on final exam as on the other tests.

Health Care

A problem with market based health care is that profit rather than health concerns primarily drive the system. Companies naturally seek to maximize profits in a market. That means pushing for as many and as expensive procedures as possible.

  • Easier to recycle.
  • Longer warranty, to encourage manufacturers to make more durable products.

Will Everybody Earn the Same in Socialist Society?

It is a common misconception that socialism implies that everybody gets the same. However if you look through the party programs of all socialist inspired parties in Norway, there is no such view being advocated.

Executive Summary

What modern socialists mean when they talk about a socialist society is actually not that dramatically different from the kind of social democracy that exists in Nordic countries today.

Why should you care about Scandinavian Socialist Parties?

And finally why should you care about Scandinavian Socialists and what I write here? For the simple reason that these parties have actually been in power for many years and are still represented in parliament. They have a track record of voting and they have had to appeal to actual voters.

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

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