Earlier this year, I explained why Nordic nations are not socialist. Or, to be more precise, I wrote that if they are socialist, then so is the United States.
And my slam-dunk evidence was this chart from the Fraser Institute’s Economic Freedom of the World., which shows that there is almost no difference in overall economic liberty when comparing the United States with Finland, Norway, Sweden, and Denmark.
This doesn’t mean, incidentally, that we have identical policies. I pointed out that the United States gets a better (less worse) score on fiscal policy, but also reiterated that Nordic nations are more market oriented than America when looking at other variables (especially rule of law).
The net effect, though, is that we wind up with near-identical scores.
I’m rehashing this old data because there’s a column in The Week that celebrates Norway as an example of “democratic socialism.”
The spectacular upset victory of Alexandria Ocasio-Cortez in her recent New York congressional primary election has catapulted the topic of democratic socialism to the top of America’s political discussion. …we have a country that very closely approximates the democratic socialist ideal.
It’s a place that is…considerably more successful than the United States on virtually every social metric one can name. I’m talking about Norway. …Norwegian workers are heavily protected, with 70 percent of workers covered by union contracts, and over a third directly employed by the government. The Norwegian state operates a gigantic sovereign wealth fund, and its financial assets total 331 percent of its GDP… Meanwhile, its state-owned enterprises are worth 87 percent of GDP. Of all the domestic wealth in Norway, the government owns 59 percent, and fully three-quarters of the non-home wealth.
I don’t know if those specific statistics are true, but I certainly don’t disagree with the assertion that Norway has a large public sector.
But here are a couple of passages that don’t pass the laugh test.
Norway is unquestionably more socialist than Venezuela… Indeed, it is considerably more socialist than supposedly-communist China.
This is absurdly inaccurate. If there was a thermonuclear version of wrong, you would be seeing a giant mushroom cloud.
Here’s the data on overall economic freedom for Norway, Venezuela, and China. As you can see, Norway is far more market oriented.
So how does the author, Ryan Cooper, rationalize his fantastical assertion of Norwegian super-socialism?
If you read the article, he has a tortured definition of democratic socialism. One of his variables is government ownership, which normally would be a reasonable piece of data to include.
But it’s an artificial number when looking at Norway since the government controls the nation’s oil and also has a big sovereign wealth fund that was financed by oil revenue.
In other words, Norway is geographically lucky because all that oil boosts Norwegian GDP. It makes Norwegians relatively prosperous. And it definitely helps partially offset the economic damage of big government.
But it’s nonsensical to argue that oil-rich Norway somehow provides evidence for overall notion of democratic socialism. It’s sort of like looking at data for Kuwait and asserting that the best economic system is a hereditary sheikdom.
Yet he wants people to support socialism simply because of Norway, as illustrated by this final excerpt.
…when it comes to building a decent place to live, Norway is completely blowing America out of the water. So while conservatives have been pointedly ignoring the most obvious and relevant piece of evidence in their spittle-flecked tirades against socialism, Norwegians can and do point to the United States as an example of what happens when you let capitalism run wild.
But there’s one itsy-bitsy, teeny-weeny problem. As you can see from the chart, Norway and the United States have almost identical levels of economic liberty.
So if America is “capitalism run wild,” then so is Norway. Or if Norway is “socialism,” then so is the United States.
The bottom line is that both the United States and Norway are admirable nations by global standards. We both rank in the top-20 percent for overall economic freedom.
But we’re not Hong Kong or Singapore, so we both obviously should do a better job of following the recipe for greater prosperity.
For additional information about what’s good and bad about Norway and other countries in the region, I recommend these columns from January 2015 and June 2015.
For additional information about why socialism is bad (both democratic and totalitarian versions), just open your eyes and look at world evidence. Or you can also peruse these columns from June 2017 and August 2017.
International Liberty 
[…] bottom line is that it’s good to avoid Norway and the United States is […]
[…] I’ll close by noting something else that was misleading in the FT report. Burn-Murdoch compares Norway to the U.S. and U.K., but that nation’s oil wealth makes it very unrepresentative. […]
[…] I’ll close by noting something else that was misleading in the FT report. Burn-Murdoch compares Norway to the U.S. and U.K., but that nation’s oil wealth makes it very unrepresentative. […]
[…] I’ll close by noting something else that was misleading in the FT report. Burn-Murdoch compares Norway to the U.S. and U.K., but that nation’s oil wealth makes it very unrepresentative. […]
[…] U.S. is even way ahead of oil-rich Norway and the tax havens of Luxembourg and […]
Mr Brennan,
LeBron James is a special basketball player because he’s tall, athletic, and smart. Take those attributes away and he’d be nothing special.
Hong Kong & Singapore succeed by being tax havens, e.g., free riders on the government services of larger countries that make their businesses possible. Capital flows there solely to evade taxes. If taxes were uniform around the world, that would negate most of their advantage.
[…] freest economy as recently as 1985, moves up 14 spots to #11), Sweden (up 30 spots to #13), Norway (up 11 spots to #14), and Belgium (up 32 spots to […]
[…] you want to understand why Luxembourg, Belgium, Norway, and Sweden are rich today, notice that they have a history of being among the world’s most […]
[…] course, as I’ve noted here before myself, Norway isn’t really quite as socialist as all that, and other Scandinavian countries are beginning to back rapidly away from the Great Third-Way […]
[…] Reprinted from International Liberty […]
[…] young people are deluded if they think bigger government is the answer, and I also pointed out that Norway is hardly a role model for “Democratic […]
[…] above originally appeared at International Liberty and is reprinted […]
“Nordic socialism is smoke and mirrors.” This quote is from Debunking Utopia by Dr. Nima Sanandaji. This book is an informative read on both the success and failures of Nordic style social demoracy.
[…] “Is Norway a Model for Democratic Socialism?”, by Daniel J. Mitchell […]
Norway is not a good indicator of the performance of “democratic socialism” anyway. Sweden is a better indicator.
That is because a large part of Norway’s wealth comes from its fossil fuel geographical endowment. A back of the envelope calculation shows that Norway exports about $15,000 per capita in oil and natural gas. So, a family of four starts out with about $60,000 in fossil fuel revenue. I’m not sure about the cost but I’d speculate that most of it is profit since Norway was still extracting and selling oil when prices were a quarter of what they are today. And when oil prices were above one hundred dollars a barrel Norway made it like bandits, not socialists.
In other words extolling the virtues of democratic socialism by pointing at Norway’s wealth is a lot like extolling the virtues of Islamic monarchy by pointing to the wealth of Saudi Arabia.
Sweden and Singapore are better reference points for potential imitation.
So, what about Sweeden?
In short, by copying Sweden you copy a once leading nation in the worldwide prosperity classification — which in recent decades (since implementation of a welfare state) has a severely subpar growth rate of about half the world average. It is therefore inevitable that under this slow growth rate Swedish prosperity will be equaled and then soon after surpassed by the much faster rising world average, a little after mid century on current trendlines. And this is the pivotal difference of our irreversibly fast growth era folks — tectonic changes and wealth ranking reorganizations that used to take centuries will now conclude in a few short decades — and accelerating.
By contrast, by copying Singapore you copy a nation whose growth continues to outperform the world average in spite of it being already one of the wealthiest jurisdictions. Come to think of it this is the way Americans came to dominate the world prosperity rankings. By sustaining a growth rate that was greater than average world growth– even after they achieved developed nation status. That is clearly not the case for America in the last few decades. Relegation to slow growth nation status will become entrenched as a majority of American voter-lemmings seem poised to copy the slow growth continent of Europe.
Ironically, the fact that Singapore has outperformed, and continues to outperform the US, and of course Europe, has a very sad undertone because Singapore is not a real democracy, it is a near-democracy. This shows that economic freedom outperforms — even in otherwise less free environments. More sadly, it shows that voter-lemmings in modern democracies are acting so foolishly that more totalitarian regimes are starting to outperform them. This does not bode well for freedom and America’s descent into slow growth Europeanism will accelerate this trend. Decline sucks down everything including lofty ideas. And what cannot go on will not go on in America, and even more soon Europe. The the arithmetic of declining economic prosperity rankings under subpar growth is ruthless. Within a few decades we will likely see things that until recently we thought unthinkable.
That being said, the warnings will not be heeded. I think it is more likely than not that American voter-lemmings will drink the fruit punch of socialism and slow growth (hence decline) like many one nations before them. As I mentioned in other posts, seems like attraction to coercive collectivism is wired in our DNA through our long evolution in virtually zero growth environments, so it is only through luck and serendipity that a few of the current democracies will escape the fate of decline during the next half century. Is there something that can be done? At the national level probably no. At the personal level be smart and stay mobile, so that you can move to the few democracies that escape, when the time comes. Otherwise you will likely sink on the voter-lemming Titanic. That being said, there are still a lot of opportunities to steal the wallets of the voter-lemming Titanic passengers while the socialism band plays on the deck. For example, you could lead some sort of “sustainability” project… I mean, I do feel bad, but when lemmings are bent on committing suicide, you might as well be in the hemlock business.
My main indicator that Americans will walk the walk down to more socialism, more statism, more taxes, more regulation, more coercive collectivism is the very environment I see here in Silicon Valley. The smartest people in the nation, the college educated innovators of the coasts, are the ones that want to socialize towards a European big welfare slow growth state. And the resistance to this mentality does not come from people with a rational approach, like Dr. Mitchell’s, but primarily from middle America country bumpkins who have little idea what is going on in the world. It is only a matter of time before the coastal erudites do them in. Trump is only a parenthesis, a temporary deceleration of this general trend at best.
PS. Meanwhile, at the micro-economic level, Dr. Mitchell’s column on marginal tax rates was another reminder of how little I get to keep for every extra dollar I make here in California. So, I’m getting a little bored with work, …as you can probably tell from the length of my comments… seems like I’m ready for Norway …and its oil welfare fund.
Reblogged this on James' Ramblings.