Social democracy

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Those damn socialist Scandinavians keep outperforming everyone in everything.
—Rick Eichhorn[1]
Social democracy is the idea that the state needs to provide security and equality of opportunity for its people and should actively reorder society in a way that is conducive to such developments, but that such changes should be brought about gradually, legitimated by a democratically-elected majority. It is native to Europe, where social democrats regularly feature as one of the major parties and have led (or at least participated in) governments in most states at some point in time, most notably in Scandinavia (up to being nicknamed the "Nordic model", which is effectively a blend of social liberalism and social democracy). Social democrats typically regard government intervention as a force for good, constraining markets and engaging in redistributive efforts for the benefit of the lower classes and consumers in order to establish a more equitable society. The ideologies' economic model is that of John Maynard Keynes.

Somewhat confusingly, social democracy is not the same thing as democratic socialism, nearly-identical names notwithstanding. Modern social democrats believe in maintaining the capitalist system — democratic socialists do not (liberal socialists are the only socialists that do).

Just like socialism, the term is heavily misused by both supporters and opponents. Social democracy addresses the issues that in less interventionist forms of capitalism, wealth inequality is passed on amongst generations due to inequality of opportunity. Sectarian social democrats sometimes oppose democratic socialism due to fear that such system would turn authoritarian, however, this is questionable as democratic socialism does not propose "democratic" centralism as authoritarian socialists like Lenin do. It tends to meet in the middle, due to its allowance of multi-party democracy and not investing too much economic power in the state.

Social democratic approach to change[edit]

While social democrats belong firmly in the progressive camp, they reject the need to change society by means of revolution and class warfare. Instead, they affirm the need of obtaining a mandate within the confines of existing democratic structures and, once in power, focus on implementing policies designed to bring about reform of a country's society and economy towards a more equal distribution of wealth. Since the end of World War II, European social democrats have generally abandoned the goal of building an alternative economic system to capitalism and moved towards platforms that affirm market-based economic orders and private entrepreneurship, yet still seek to implement welfare and state intervention designed to improve the long-term outlook for underprivileged groups.

The original split between traditional socialists and social democrats occurred at the end of the 19th century, when the latter emerged as a new branch of socialists who originally shared their vision of a radically different post-capitalist society, but didn't want to participate in outright revolutions that Marxist orthodoxy considered necessary to bring such change about. Instead, they opted to form political parties that acknowledged the existing order for the time being and tried to attain power through elections. Nowadays, this definition would cover all of the mainstream democratic left parties, even though many of these still label themselves "socialist". Therefore, this definition is inapplicable.

These days, many social democrats are largely indistinguishable from their conservative opponents, as a result of both types of parties converging around the center of the political spectrum.[citation needed] Key elements of the welfare state remain popular with the major parties as well as the general populace. Rich media magnates have used their control over large sections of news outlets to make policies that tax rich people less popular, also have used their lobbying power to lower the taxes their community pays. In recent years, overall spending on welfare policies has been slightly reduced by both center-right and center-left governments in a bid to decrease government deficits (without increasing taxes on rich people) and enhance economic competitiveness.

Performance[edit]

There is still some debate over how well these policies worked. Social democratic thought and governance has had a lot of influence on post-war Western Europe; the respective parties used to dominate the political landscape in Scandinavia and introduced the modern European welfare state model in numerous other countries such as France, Germany, and the Netherlands. While economic growth was robust up to the 1970s, the much more market-liberal United States performed better in recent decades, though practically all of these gains in America went to the wealthy. Nowadays, only Norway, which has a great deal of oil, has a higher (PPP) GDP per capita than that of the USA. This discrepancy is mostly due to shorter working hours in European countries, while worker productivity (GDP per hour worked) in the US and in advanced European countries is at similar levels. Economic growth, employment numbers, and inflation tend to either be comparable to the US or greater depending on the economic climate, while the Northern European countries are ranked extremely high in terms of economic competitiveness. While average personal income in Western Europe is somewhat lower (especially after taxes, though in nominal terms the Nordic countries actually outstrip the US by a far bit), this is offset by more leisure time and typically higher provisions of public goods such as education and health care.[2] These free-at-the-point-of-use programs mean that factoring them in, disposable income in Northern Europe can often exceed that of the US.

In social matters (for example, social mobility) however, the Scandinavian countries tend to outstrip the USA by a good margin. In terms of the Gini coefficient, which measures the equality of income distribution, the United States does very poorly (even worse than Russia) and is handily beaten by the European states. Human development and happiness are also indexes on which the Nordic counties perform considerably better.

Today[edit]

See the main article on this topic: European sovereign debt crisis

In 2006, The Economist asserted that the Nordic Model, with what it deemed "grave defects", would break down, predicting that a new centre-right government in Sweden would dismantle the welfare state.[3] This would not occur. Two years later, the economies of both the United Kingdom (where The Economist is based) and its less-regulated counterpart, the United States, crumbled into the worst recession since the 1930s. Sweden's total tax rate remains at near 50%, and every Scandinavian nation (excluding deregulated Iceland) has emerged with comparatively lower debt levels and unemployment rates than both the US and UK. The Economist has since, if begrudgingly, called the Scandinavian nations "probably the best-governed in the world."

Look at the fine print[edit]

The stereotype that the Nordic model is a bureaucratic, Soviet-style mess borders on the willfully ignorant. In addition to exceptionally high union membership, there is a deep commitment to adapting with the times. To combat outsourcing and wage dumping as associated with globalization, Scandinavia is committed to free trade,[4] trading corporate taxesWikipedia's W.svg for VATWikipedia's W.svgs.[5] This regulatory environment is known as flexicurity, wherein ease of hiring and firing workers is offset with skills upkeep towards ensuring that they won't go into poverty while unemployed.[6]

In the US[edit]

Social democracy in the United States has been associated with the left-wing of the Democratic Party and the right-wing of the Democratic Socialists of America. The latter organization had both social democratic and Marxist wings. The Democratic Party's left-wing, during the post-World War II era, was typified by organized labour and writers like Arthur Schlesinger Jr., who viewed social democracy as the "vital center" of politics in opposition to both far-left communism and far-right laissez-faire capitalism. Other groups, like the Social Democrats USA, and the related Democratic Socialist Organizing Committee, were formed by former Trotskyists who had swung hard-right on foreign policy and advocated a strong anti-Soviet Union stance, but remained economically leftist; this group's main ideological influence was Trotskyist theorist Max Shachtman, who is sometimes also cited as an intellectual father of neoconservatism. The 1912 election was particularly memorable as a (possible) high watermark of leftist ideology on the national stage, as it pitted an outright socialist (Eugene V. Debs) and a candidate of the Progressive Party (Teddy Roosevelt) as well as a self-described "progressive" for the Democrats (Woodrow Wilson) against an incumbent Republican (Howard Taft) who got clobbered and placed third.

A small Social Democratic Party[7] actually exists in the US, but most Americans have no idea. What they do know is the existence and resurgence of the Democratic Socialists of America (DSA), who recently helped candidates win local and state elections in Virginia towards the end of 2017.

For decades, the only self-described "Socialist" on the national political stage was Vermont Senator and 2016 Democratic presidential primary candidate Bernie Sanders. Although some parts of the internet had a near-religious conviction that Bernie would eventually win the candidacy, this did not happen and Hillary Clinton won the candidacy, briefly throwing parts of the internet into mass hysteria. Still, there are some who argue that if Bernie would have been the Democratic candidate the second great WTF? moment of 2016 would have been avoided.

As of the 2018 midterm election, due to the work of grassroots organizations such as the Justice Democrats, Democratic Socialists of America, and Bernie's Our Revolution, a few new social democratic figures have cropped up in the American mainstream. Possibly the most well-known of the entire group is Rep. Alexandria Ocasio-Cortez (NY-14), who initially gained fame for successfully primarying House Democratic Caucus Chair Joe Crowley from the left. Also included in this group are newcomers and incumbent House Democrats such as Ro Khanna (CA-17), Raul Grijalva (AZ-3), Pramila Jayapal (WA-7), Ilhan Omar (MN-5), Ayanna Pressley (MA-7), and Rashida Tlaib (MI-13).

Criticism[edit]

Considering that many European countries are perfect case studies to use in support of social democracy, it's pretty difficult to argue against implementing the system in the United States, but that hasn't stopped people from trying.

Much of the "criticism" against social democracy hails from conservatives, who, being the intellectually dishonest hacks they are, cannot be bothered to do much research into social democracy and thus regurgitate very low information "arguments" against a system which works very well in so many countries.

Some of these "criticisms" include:

  • Venezuela!!!
  • They don't have minimum wages!
  • They're free-market economies!
  • They're capitalist countries with big welfare states!

None of these arguments actually explain why social democracy is a bad system which should not or cannot be implemented in the United States, rather, many of them just describe aspects of social democracy. If someone is making these arguments, just agree and then ask why we shouldn't pursue that system. Either they won't be able to respond or they'll contradict themselves and call those countries or reforms socialist or use a reductio ad Venezuelum fallacy.

Actual criticism[edit]

While there is actual criticism against social democracy, much of it is skepticism of whether or not the Nordic countries which implement social democracy would actually be better off without it.

Good Trends Before Social Democracy[edit]

One of these points of skepticism is the fact that the Nordic Countries, in particular, have shown pretty good social outcomes and low levels of income inequality before adopting social democracy and the "Nordic Model". In 1960, tax revenues amounted to 25 percent of GDP in Denmark, 28 percent in Finland, 29 percent in Sweden and 32 percent in Norway. This can be compared with rates of 27 percent of GDP in the UK and 34 percent in Germany at the same time.[8] From 1960 to 2005, the Nordic countries have fallen in their life expectancy rankings.[9]. In fact, Iceland, despite having a smaller government,[note 1] has better social outcomes in many areas than the other Nordic countries. In 2011, life expectancy in Iceland was 82.4 years, compared with 81.8 in Sweden, 81.3 in Norway, 80.5 in Finland and 79.8 in Denmark.[10] Iceland beat all of them in child mortality rates in 1960, 2005, and 2013.[11]

These countries have also shown interesting trends in their egalitarian income distribution. In 1920, well before the existence of any welfare state, Sweden had the most equal income distribution out of the US, Canada, France and the Netherlands. The income share of the Swedish top decile drops sharply over the first eighty years of the twentieth century. Most of the decrease takes place before the expansion of the welfare state and by 1950 Swedish top income shares were already lower than in other countries.[12]

In Denmark, the Gini coefficient of taxable income moved considerably towards higher levels of equality during the last three decades of the 19th century as well as in the first half of the 20th century. Most of the shift towards higher equality happened before the introduction of a large public sector and high taxes.[13] In Denmark, Norway, and Sweden the income shares of the top 10% and largely for the top 1% dropped a lot between 1900 and 1970. It continued to fall a bit during the 1980s but has since increased to 1970 levels.[14]

Income and Wealth Inequality[edit]

The Nordic countries generally rank among the lowest countries in terms of the Gini coefficient, which measures income inequality. However, Slovenia beats Norway, Denmark, Finland, and Sweden; the Czech Republic beats Finland and Sweden; Slovakia, Belgium, and Austria beat Sweden. These countries, specifically Slovenia, the Czech Republic, and Slovakia, don't have welfare states or taxes anywhere near similar to what the Nordic countries have, and the Czech Republic even has a flat tax.[15] However, the income per capita is also much lower in Slovenia, the Czech Republic, and Slovakia than in Scandinavia, something which the IEA report omits, nor does it look at other flat tax countries that don't fit this pattern, such as Russia, suggesting at least a degree of cherry picking.

In terms of wealth inequality, Italy and the United Kingdom have lower levels than Finland, and Sweden has worse inequality than Canada, Germany, and the United States. As of 2009, 30% of Swedish households had net zero or negative assets. Around 20% had asset levels that corresponded to around one month’s salary for a normal household.[16]

Nords in America[edit]

According to the 2010 US Census, the median household income in the United States is $51,914. This can be compared with a median household income of $61,920 for Danish Americans, $59,379 for Finnish-Americans, $60,935 for Norwegian Americans and $61,549 for Swedish Americans. There is also a group that just identifies as "Scandinavian Americans" in the US Census. The median household income for this group is $66,219.[17]

If we assume that the difference in median income between these groups and the US' can be translated to GDP per capita, then the GDP per capita of Norwegian Americans would amount to $55,396. This is only slightly less than the $57,945 GDP per capita of oil-rich Norway. Danish Americans have a contribution to GDP per capita 37% higher than Danes still living in Denmark, Swedish Americans contribute 39% more to GDP per capita than Swedes living in Sweden, and Finnish Americans contribute 47% more than Finns living in Finland.[18]

The Nords that migrated to the United States weren't wealthy, in fact, those who migrated to the US tended to initially face worse conditions than those who stayed home.[note 2] The IEA report claims that there’s a lower poverty rate among Nordic Americans than those living in Nordic countries,[19] but only arrives at this conclusion by ignoring actual absolute poverty rates in Scandinavia and the US (which the report itself acknowledges are lower, except in the case of Finland) in favour of a claim that because Scandinavian-Americans are on average underrepresented among the US poor (only half as many Scandinavian-Americans live in poverty as the average US citizen), poverty rates are “really” lower in the US. This is clearly a very roundabout way of arriving at a result that is not nearly as robust as the wording of the report lets on, let alone that it ignores a host of complications, such as not removing immigrants, refugees etc. from the Scandinavian poverty statistics the way it positively isolates the Scandinavian-Americans in the US.

The largest social democratic parties in various countries[edit]

See also[edit]

External links[edit]

Notes[edit]

  1. The average tax revenue as a percentage of GDP from 2003 to 2013 in Iceland was 36%. This is contrasted with 42% in Finland, 43% in Norway, 44% in Sweden and 47% in Denmark.
  2. This is one of those “kind of true” statements that is neither wholly false nor wholly correct. Of course, those who emigrated were likely to be non elites, since emigres were those who saw better prospects in the US, while those who had good prospects at home had little reason to emigrate. However, the very bottom of society would have been hard pressed to raise the money needed for emigration, even with the steadily declining ticket prices. The IEA report glosses these complications over and instead invokes the “black box” of “culture” to claim that Scandinavians are almost bound to do well and that the Nordic model supposedly holds them back somewhat.

References[edit]

  1. Interesting, eh?
  2. Paul Krugman: "French Family Values", NYT column.
  3. Farewell, Nordic model, The Economist
  4. Nordic model on WikipediaWikipedia's W.svg
  5. Nordic model: The tax mix, Worthwhile Canadian Initiative
  6. A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia, The New York Times
  7. http://socialistcurrents.org/
  8. Scandinavian Unexceptionalism. pp. 51; do note, however, that this report came out of the Institute of Economic Affairs, so it might merit a grain of salt or two...
  9. Ibid. pp. 52
  10. Ibid. pp. 54
  11. Ibid. pp. 55
  12. Ibid. pp. 56
  13. Ibid. pp. 56-57
  14. Ibid. pp. 57
  15. Ibid. pp. 59
  16. Ibid. pp. 60
  17. Ibid. pp. 62
  18. Ibid. pp. 62-63
  19. Ibid. pp. 63