Democratic Socialists, from Bernie Sanders, to Alexandria Ocasio-Cortez, and I’ll even put Elizabeth Warren in that mold, state that the US is a victim of what happens when a nation’s economic system is based on Capitalism. America or Denmark? It appears on the surface that America is “Capitalist” and Denmark is “Socialist.”
Democratic Socialists cite problems such as income inequality, lower minimum wages, high costs of living, as well as high costs of education and healthcare. Many will point to Scandinavian countries like Denmark and Sweden, claiming their “Socialist” structure is the evidence they need that Socialism triumphs over the Capitalist system in the US.
But if Denmark and Sweden were socialist, I wouldn’t be planning on taking a trip (and maybe even someday living for a few years) to these northern lands.
In fact, let’s start the answer to my question stated in the title with a case study of Denmark.
Is Denmark Socialist?
How socialist is Denmark?
Not very. Click this link to a Google Search entitled ‘Is Denmark Socialist?’
Per the Foundation of Economic Education, the Center for Political Studies (CEPOS) issued a 20-page report in late 2018 and found that in some circumstances, the supposedly socialist Nordic countries have more economic freedom than the United States. Per the Heritage Foundation in 2018, Denmark ranked 6 points ahead of the US (12th overall) in economic freedom, while the US ranked 18th.
Denmark also ranked higher with fighting corruption, regulation, free trade, protection of property rights, and flexibility of the labor market while the US ranked better with taxes and public spending.
In other words, Denmark actually sees LESS government regulation in industry as well as protecting private property, something I can tell you from experience the US is abysmal at—where government can seize your private property by basically calling for eminent domain and we all know that Donald Trump’s trade wars are the exact opposite of free trade.
The report stated, “The high level of economic freedom is an explanation for the relatively high level of income in Denmark, in spite of the high level of taxes and the big welfare state.”
Now, while I’m against high levels of taxation and expanded social safety nets, believing more in charitable donations, which the US leads the world in, by the way, Denmark is in a unique position, as with the rest of the Nordic nations.
Due to their love of free markets, the CAN make a welfare state work, at least for a time. In the US, government regulation has increased in industry and trust me, if you’ve ever worked in warehousing or something similar, some of these OSHAA regulations just make absolutely zero sense. You can’t even stand a pallet up against something without OSHAA fining a company if they’re caught committing the act.
The report also shows that Denmark became a wealthy nation based on free markets before the welfare state was introduced. Again, I believe there are better ways of helping the deserving poor, especially if there’s an increased incentive to work.
But when Denmark introduced an expansive welfare state, its economy reached crossroads. In other words, things didn’t go the way the central planners hoped. Government regimes from the 1980s-onward had to introduce decreased benefits, lower regulation, and privatization of pensions, and guess what?
Denmark’s economy thrived again.
Is Denmark Perfect?
Far from it, but as you can see the nation has a lot of upside, and it has many similarities to what North Columbia looks like in Northern Knights.
For instance, both Denmark and North Columbia run on free markets, little to no regulation, free trade, and staunch protection of private property rights—there are zero gun laws in North Columbia, and you can refer to this article as to the real reason the US experiences such a high rate of homicides. Hint: It has nothing to do with lenient gun laws.
But does North Columbia do everything Denmark does?
Of course not.
Like the US, Denmark has its downside.
The Danish government confiscates more than half of all incomes, where even those in the low and middle-income classes pay a 56% and 57% tax rate, respectively.
While the poor in Denmark have more than the poor in the US, the average middle-class American earns 27% more in take-home than the middle-class Dane.
Denmark’s value-added tax (VAT)?
A whopping 25%!
They pay $1,200 in USD equivalents yearly in car-ownership taxes for a pickup truck.
High consumption taxes mean that you have less money to spend on goods, which at the end of the day, despite them having more money, hurts the poor.
What About North Columbia?
In North Columbia, taxes are low throughout the board, where I’ve always described those in the lower-income brackets paying 10%, the working and middle 12%, and everyone else over a certain income 15%.
However, keep in mind that with lesser regulation comes more competition in all industries while more discourages competition and protects established firms. More competition helps employees because now employers have to keep up with their competitors.
This means higher wages, better working conditions, employee benefits, the whole nine yards. Something many Libertarian economists point out is that with lesser regulation comes lesser production costs, making it easier for small businesses to thrive in a nation ruled by corporatism, which is about as anti-Capitalism as you can get.
Ron Paul had gone on record to state corporations hate the free market because the free market is going to give them more competition. Of course, more competition only means that large corporations who might be forcing people to buy an existing product that hasn’t been updated for ages while more competition via the free market means increased innovation.
With increased innovation, smaller companies have a fair chance at competing with larger corporations, whose products might have become dated. The corporate structure can no longer dominate. They can’t keep wages as low because they need to keep workers. They can’t keep benefits to a minimum because their best employees might work for competition. They have to keep working conditions safe because employees who value safety will jump ship.
And this is what makes North Columbia thrive. Add in the low property taxes which cease when a property is paid for, it goes to show that North Columbians can now use the monies saved via taxation in their land.
Some might say, “Well, what about the roads?”
In a Libertarian society like North Columbia, the roads are privately owned where citizens pay to use the roads as a service, much like a toll road.
In Nordic nations like Sweden and Finland, two-thirds of the roads are privately owned and operated, where ownership is split between homeowners residing on the private roads. This is used to offset the cost of government spending to upkeep such roads as they’re delegated to the private sector.
So even then, upkeep of roads has been proven to thrive when delegated to the private sector.
So, is Libertarian more like the supposedly “Capitalist” US or “Socialist” Denmark?
In all honesty, it’s a hybrid, where I see a lot of upside in the Danish model as well as some in the US model as well. The free markets, little regulation, free trade, and fierce protection of property rights gravitates me toward the Danish model, while lower taxation has always allowed for greater purchases of goods and investment in business, which of course creates more wealth, especially for those who need it the most.
We can call Libertarian North Columbia a hybrid nation that borrows from the upside of both the US and Denmark.
I’d like to thank everyone for reading, please come back soon.