Week 07 Response -- What Makes Scandinavian Socialism Different

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This post is in response to the question What differentiates Scandinavian socialism from previous forms of socialism? posed by @newtonquach

What makes Scandinavian Socialism, commonly called the Nordic Model, so different from both capitalism and traditional forms of socialism is due to the unique circumstances that currently surround the Nordic countries that follow the Scandinavian Socialism model.

What Is Scandinavian Socialism

The Nordic Model describes the “unique combination of free-market capitalism and social benefits” that provides education, health, and retirement benefits for the citizens under its economy (Kenton, n.d.). It is essentially seen by supporters as a middle-ground between free-trade capital markets and communist regimes.

How Scandinavian Socialism Differs

However, the reason that Scandinavian Socialism stands out from previous forms of socialism is because the current models—implemented in the countries of Sweden, Norway, Finland, and Denmark—have the unique results of “high living standards and low-income disparity” (Kenton, n.d.).

This is in contrast to what most of history has shown the effects of socialism to be, scarcity of necessary items and poor living conditions for most citizens (Henderson, 2018). However, while the results of the Scandinavian Socialist system are true, there are a few points that need to be considered.

Important Considerations

Firstly, it has to be acknowledged that the Nordic system does result in high taxes. Denmark alone has a tax burden of 45.9% (McKay, 2020). However, McKay (2020) argues that what makes this system work in the eyes of the citizens is the trust they hold in the government to use their money for the betterment of the people.

Secondly, one of the parts of this system that allows for these results is the fact that Norway owns more of its capitals of production in-country (McKay, 2020). This means it is easier for citizens, businesses, and the government to partner up rather than compete (McKay, 2020). Additionally, since Norway participates in free trade they can conduct business all over the world, benefiting from the globalism this offers while still earning revenue for the economy (McKay, 2020).

Conclusion

Overall, there are many benefits and negatives to the Nordic Model however I think Andrew McKay, author of “Scandinavian Socialism; the truth of the Nordic Model” sums it up best when he states that “The Nordic Model works in Scandinavia because it’s in Scandinavia.” What I essentially take that to mean is that the methods they use in Norway work, and they make conditions livable and enjoyable for the citizens. However, because of the unique conditions surrounding that economy, the Nordic Model cannot be used as a model for what the results of shifting the economies of large, historically-capitalist, counties towards socialism would be.

Works Cited
Kenton, W. (n.d.). Nordic Model Definiition. Investopedia. Retrieved September 29, 2021, from https://www.investopedia.com/terms/n/nordic-model.asp
Henderson, D. R. (2018, November 3). The Destructive Consequences Of Socialism. Hoover Institution. https://www.hoover.org/research/destructive-consequences-socialism
McKay, A. (2020, August 3). Scandinavian ‘Socialism’: The Truth of the Nordic Model. Life in Norway. https://www.lifeinnorway.net/scandinavian-socialism/

McKay (2020) argues that what makes this system work in the eyes of the citizens is the trust they hold in the government to use their money for the betterment of the people.

Andrew McKay, author of “Scandinavian Socialism; the truth of the Nordic Model” sums it up best when he states that “The Nordic Model works in Scandinavia because it’s in Scandinavia.”

A couple of things to note. First and foremost is that "Scandinavian Socialism" is not socialism. Dr. Per Bylund (a native of Sweden and former Swedish politician, now a professor of entrepreneurship at Oklahoma State University), gave a lecture to the Free Enterprise Society a couple years ago entitled (Not Socialist) Sweden where he described the history of Sweden and how they tried socialism (in the 1970s, I believe) then ultimately rejected it after it wrecked their economy and their currency. Their current system embraces private property and private ownership of the means of production.

The key 'difference' between Scandinavia and the U.S. lies in the high tax burden that the Scandinavian citizens willingly accept, which enables their government to provide considerable welfare services. One of the arguments as to why this is accepted (and perhaps even embraced) within Scandinavian culture is that Scandinavian society is extremely homogenous -- in other words, there is a much stronger sense that the government is taking care of 'us' rather than taking care of 'them'.