Nordic socialism
Brian foulds
5/31/18
European history H block
Today in us politics people like Bernie Sanders point to Scandinavia and Finland. This is their proof that their socialist economic system will work. Well when you do some research you will find very quickly that something doesn't add up. These Nordic countries are not socialist. Not only are they not fully nationalized, nationalization is not even a majority in the Nordic economies. The myth of Nordic socialism is just not true. They do not give the means of production to the community. This is not close enough to consider it a socialist economy. And the socialist economy is getting a piggyback ride from the capitalist system. In the 19th century Sweden began to change from an agrarian economy to a modern industrialized nation they jump-started the economy by implementing a capitalist free market system. This system was out of the control of the government. It seems to me like it had practically no regulations to speak. Before the world wars, Sweden had been borrowing a lot of money to invest in their country. Then after and during the wars they became creditors. This lasted until the 1970’s. The easy answer for why is a series of unfortunate events. Taxes began to rise rapidly in order to fund redistribution of wealth and to fund public industries. Making Sweden much less business friendly. In some extreme cases the top marginal tax rate achieved 100%. This was a reason that the founder of Ikea fled Sweden. Also, the Swedes had been profitable in exports, and because of the profitability, they became dependent on the exports due to the small national economy. When the oil crisis came around in the 1970’s the exportation became less profitable. And this made it much easier for companies located where the Swedes had been exporting too. This began to shut down the main source of income. In order to maintain the employment rate, the government gave out subsidies. This fixed nothing and just cemented the problem. After a few economic crashes. The government decided that they needed to change some stuff. Which included lowering the tax rate on companies. They lowered it below the corporate tax rate in the USA. this made the private sector stronger that then allowed the government to tax the people. they tried to siphon some of the new money from the people in order to spend it where they thought it needed to. This really reminds me of a trojan horse. It is painted as a socialist economy though it was made by capitalism, maintained by capitalism. But it's being used to deceive the public into thinking that socialism is successful system that will make all of their wishes come true. It may be useful as long as no one pays attention to the man behind the curtain.
Since these economies are not socialist why do people think that they are? I think it is because of the social safety nets and economic equality along with some nationalization. What do these social safety nets look like? These safety nets are large, tax-funded, public industries. These industries include healthcare, Child benefits, and pensions for old people, education, and unemployment. These are all super cool and all but, don’t try to pull a fast one and have a baby there before they kick you out. You won’t be getting anything because citizenship laws in the USA are much more accommodating to immigrants, due to the fact that people born in the USA are Americans. Babies whose parents are Norwegian are citizens. There are no laws saying that when you are born in Norway you are given citizenship. So if you want to get the parent benefits you are going to have to do a lot. It isn’t a walk in the park. I also can’t forget to mention that even though the government gives you money and it isn’t the most generous in the world. It isn’t even enough to live on. In Norway, you will receive around 100 dollars a month meaning that you will need a family member go to work when the other is at home. Also In Norway, you will not get any subsidies or welfare until you pay into the system for an entire year which means you are paying Norwegian taxes without getting the benefits that justified the payments in the first place. Another great benefit of the Norwegian safety net is the pensions that seniors receive. Now in order to obtain these you need to spend 300 hours learning norwegian. Your pension will be determined by how long you served the country.
How is the social safety net paid for. The social safety net is under strain with 20% of the population on unemployment/ sick leave in 2016 as is shown in this article “Welfare state leaves 20% on the dole” In Norway, this puts a strain on the working taxpayer. To pay for the safety net, they have nationalized the entire oil industry. This accounts for 17 percent of the government revenue according to Norwegianpetroleum.no “share of the state’s revenue 17%” . Along with trillion dollars tucked away for safekeeping. This was also produced by the oil industry. They are basically an oil emirate with 5 million people which is two million fewer people then we have in Massachusetts. That is 25% of the population of New York. in one country that has a massive oil industry. Which has the north sea under its control. This is the source of 17 percent of all of their government revenue. Also, the government monopoly on oil has forced the people of Norway to pay $7.71 for a gallon of gas as of may 21 2018. This is another reason that nationalisation of industries are concerning. The whole reason that the united states doesn't allow monopolies is because something like this can happen. In Norway there are a bunch of people who want you to not use gasoline. So instead of making a better alternative product that could replace your need for gasoline or convince you that you don’t want to use gasoline. They decide that they will use the force of law, which is only powerful because they have deadly force, a.k.a the military/ police. Which is, when you look at it from that perspective forcing you at gunpoint to not burn some gasoline. Which is not harmful knowing how uninfluential Norway is, in any real way. Not to mention the fact that they are going to sell it anyways which I am pretty sure will not to someone who is going to put it back in the earth so that no one can ever burn the poor dinosaur who made this oil. The absurd tax on oil seems like a good way to milk the citizens for every penny which is pretty much how it goes anyways. Nordic taxes are in general very high. In Denmark for example, “VAT is 25% in Denmark” has a sales tax rate of 25% on all purchases made. That tax absorbs a whopping 30% of the entire GDP of Denmark. But their not done there. Next, they siphon 16 percent of the GDP of Denmark from income tax. To you this means that you will be paying 56.22 percent of your labor. I guess you could be thankful that you aren't in Sweden. “Sweden has the highest average marginal income tax rates in the world” 3 you will be paying 56.86% of your labor. Yay. Oh, also you have to pay 25% sales tax on everything you buy with that fortune you have that is now worth 43.14% of your yearly earnings so if you spent all that you would have 32.355% of your earnings in your own new stuff. Well, 32.355% Stockholm prices. But who cares, everything is cheaper in Sweden, right. yes. If everything doesn't include in general consumer prices, consumer prices including rent, rent prices, restaurant prices, groceries prices, in general, purchasing power, one price that is equal are they have been thoughtful due to the fact that they have very cheap childcare. That will be necessary in order to keep your child safe when you have to work for eternity in order to make a penny that you can keep. Writing this makes me feel like this is a really brutal board game that you can’t escape. You probably won’t be able to due to the fact that most methods of transportation are much more expensive. The produce so much that it is an major export of the country and they produce so much and have a tiny population and still need to charge 7.71. This is a real problem also they protected the butter industry. They put up massive tariffs in order to do so. This led to national dependence. Then when rain came and stopped cows from eating and making butter they had a shortage and the price of butter became 50 dollars for one of those little butter boxes. That is freaking crazy then everyone wanted to decrease tariffs on butter but they didn’t get it. So smuggling operation began smuggling butter across the border. This is hilarious because it is crazy that people would have to smuggle something as harmless as butter across the border. Also it is crazy that in one place butter would cost 5.00 dollars and inches to the right butter costs 50 dollars. This is another reason that governments should not intervene and be protectionist with things like butter. The funniest part is that the leader of Denmark. Made a statement to Bernie Sanders informing Bernie that this Denmark is not a socialist economy. It is a capitalist economy because they figured out that it is impossible to have a successful economy that is capitalist economy. They use taxes that come from the capitalist system to fund their welfare and other social safety nets. This shows that the Bernie Sanders is actually a capitalist. This capitalist economy is the only way to obtain the wealth that is necessary to fund these social programs.
How has the “socialism” affected the people? This is very interesting I don’t know for certain. There are quite a bit of statistics to wade through and even then it is still mixed. I’m not entirely what to attribute to culture, the safety net or the capitalist motor running the whole thing. The UN has rated the Nordic countries as some of the happiest in the world. Nordic countries are all there in the top ten. Finland is at the top then Norway, Denmark and then Sweden comes in at 9th. The criteria for determining happiness are GDP, social support, healthy life expectancy at birth, freedom to make life choices, generosity, perceptions of corruption. World happiness report. How did they achieve this? Are their countries truly the happiest? The GDP seems like a good determination of the quality of life. It also seems like it affects the life expectancy when you look at the world the GDP per capita it seems to correlate with the life expectancy. Social support and generosity seem to be tied to societal values as is corruption. Freedom to make life choices seems like both societal and governmental. I’m not so sure that the government can peaceful change these things. I think that it largely has to do with the society.
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