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The good news is that Donald Trump is not imitating all of Herbert Hoover’s statist policies.

The bad news, as I explain in this interview, is that his protectionist mistakes could trigger a repeat of Hoover’s beggar-thy-neighbor protectionism that wreaked havoc in the global economy during the 1930s.

George Santayana is famous for warning that “Those who cannot remember the past are condemned to repeat it.”

Well, this is why I’m so agitated about what Trump is doing. It’s true that the economy will not be wiped out by the trade taxes he’s imposing today. But what happens when other nations retaliate, and then Trump doubles down with additional taxes on global commerce?

That’s a potential recipe for a big reduction in worldwide liberty. Which is exactly what happened in the 1930s, as illustrated by this chart from an academic study.

At the risk of understatement, that would not be good for American prosperity. And blue-collar workers would be among the victims since protectionism always destroys more jobs than it saves.

So what can be done about this?

The Washington Post reports on some bipartisan legislation that would curtail Trump’s authority to unilaterally destabilize world trade.

Sen. Bob Corker (R-Tenn.) introduced a bipartisan bill Wednesday that would give Congress new authority to check the president’s trade moves… Corker’s bill would require congressional approval when the president enacts tariffs under the auspices of national security, as Trump did last week in imposing levies on aluminum and steel imports from Canada, Mexico and the European Union. The legislation, which Corker released with a total of nine Democratic and Republican co-sponsors, is the most forceful congressional response to date to Trump’s protectionist trade agenda. …The bill’s prospects are unclear. Corker acknowledged that some Republicans are unwilling to cross the president, and Majority Leader Mitch McConnell (R-Ky.) has ruled out bringing up the measure as a stand-alone bill. But Corker’s bill appeared to be gaining traction on and off Capitol Hill on Wednesday. The U.S. Chamber of Commerce announced its support, as did Koch Industries. …Corker’s legislation would require the president to submit to Congress any proposal to adjust imports in the interest of national security. The legislation would qualify for expedited consideration for a 60-day period. …The co-sponsors are Republican Sens. Patrick J. Toomey (Pa.), Lamar Alexander (Tenn.), Mike Lee (Utah), Ron Johnson (Wis.) and Jeff Flake (Ariz.), along with Democrats Heidi Heitkamp (N.D.), Mark R. Warner (Va.), Brian Schatz (Hawaii) and Chris Van Hollen (Md.).

I’m sympathetic to such legislation, not only to thwart Trump’s protectionism, but also because I don’t think any White House should have so much unilateral power. In other words, I’m philosophically consistent. I didn’t think it was right for Obama to have the authority to arbitrarily change provisions of Obamacare and I don’t think it is right for Trump to have the authority to arbitrarily change provisions of trade law.

But let’s stick to the trade issue. Lower taxes on global commerce are one of the great achievements of post-World War II era. Policy makers around the world have lowered barriers and allowed the free market more breathing room.

That’s been a very successful policy.

By the way, politicians from developing nations deserve special credit. They’ve been especially aggressive in lifting the burden of trade taxes. Here’s a chart prepared by the Confederation of British Industry.

I started today’s column by warning that Trump shouldn’t emulate Hoover. I’ll end the column by pointing out that Reagan is a better role model.

And if that doesn’t work, maybe we can educate the President on why it’s good to have a capital surplus, which is the flip side of having a trade deficit.

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Normally when I write about Georgia, it’s to wax poetic about the Glorious Bulldogs. But I’m currently in Tbilisi, the capital of the nation of Georgia, which is wedged between Russia, Turkey, Armenia, and Azerbaijan.

So allow me to take this opportunity to highlight the benefits of sweeping pro-market reform. Georgia is ranked #8 according to Economic Freedom of the World and it doesn’t get nearly enough attention considering that lofty score.

This chart from EFW shows Georgia’s score since the reform wave started in 2004.

The fact that Georgia’s score jumped by one full point over 11 years is impressive, but it’s even more impressive to see how the country’s relative ranking has increased from #56 to #8.

Here are the numbers for 2004 and 2015. As you can see, there were particularly dramatic improvements in trade, regulation, and quality of governance (legal system and property rights).

My friend from Georgia, Gia Jandieri, said one of the worst legacies of Soviet rule was corruption. He and his colleagues at the local pro-market think tank explained to policymakers that reducing the size and scope of government was a good strategy to address this problem.

And they were right.

Georgia was ranked near the bottom by Transparency International in 2004, scoring just a 2 (on a 1-10 scale) and tied for #133 out of 146 nations. Now Georgia’s score has jumped to 56 (on a 1-100 scale), which puts it #46 out of 180 nations.

And a big reason why corruption has plummeted is that you no longer need all sorts of permits when setting up a business. Indeed, Georgia ranks #9 in the World Bank’s Ease of Doing Business.

For what it’s worth, Georgia is only three spots behind the United States (the previous year, they were eight spots behind America).

And I definitely shouldn’t forget to mention that Georgia is part of the global flat tax revolution.

So what does all this mean? Well, according to both the IMF data and the Maddison database, per-capita GDP in Georgia has more than doubled since pro-market reforms were enacted.

In other words, ordinary people have been the winners, thanks to a shift to capitalism.

P.S. Since I just wrote about my visit to the anti-Nazi/anti-Marxist House of Terror Museum in Budapest, I should mention that the “lowlight” of my visit to Georgia was seeing Stalin’s boyhood home earlier today. I realize “thumbs down” is a grossly inadequate way of expressing disapproval for a tyrant who butchered millions of people, but I didn’t want to get arrested for urinating in public.

I wonder if Hitler’s boyhood home still exists? I could visit and then say I covered both ends of the socialist spectrum.

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This morning in Monaco, I moderated a panel for the Convention of Independent Financial Advisors on the implications of an “uber-ized” economy. In my introductory comments, I asserted that the best part of capitalism was “creative destruction.” Simply stated, we all benefit when entrepreneurs come up with products such as personal computers that make our lives better.

But I also pointed out that creative destruction was the most painful part of capitalism. Think, for example, about the people who used to work in the typewriter industry.

One of the speakers, Professor Philippe Silberzahn of the EMLYON Business School, cited another example. Kodak used to be one of the biggest and most profitable companies in America, but the digital camera (ironically, first invented by Kodak) set the firm into a death spiral. What was creative for the rest of us wound up causing destruction for the people who worked at Kodak and the investors who owned shares of Kodak.

It’s easy, as an armchair economist, to argue in favor of creative destruction. As explained in this video, this is why we are far richer than our ancestors. Even if our ancestors worked in the candle industry and were bankrupted and tossed out of work when the electric light bulb hit the market.

But armchair theorizing (even when accurate) doesn’t change the fact that change means temporary pain. And this is a political challenge. Especially since those who suffer are the “seen” and the beneficiaries often are “unseen.”

But none of that changes the fact that politicians should not intervene. Assuming, of course, the goal is long-run increases in living standards for everyone.

In a column for CapX, Tim Worstall elaborates on how we become richer when we produce more with less.

Warren Buffett tells us all that slashing jobs is just the capitalist way. …But Buffett is wrong. This isn’t the capitalist way at all. This is just the way that any and every economy should work. Whether communist, socialist, social democratic or capitalist, all economies will economise on inputs into a process. That is what actually makes us richer. Buffett’s subsequent point – that “people live better when there is more output per capita” – is right. But that’s not specific to capitalism. …as Paul Krugman has pointed out, productivity isn’t everything but in the long run it’s pretty much everything. …Today, instead of everyone working in the fields, just 2 per cent of us do so. The other 98 per cent of the population are busing trying to sate some other human desire or want. And thus, we have the labour to run a health service, libraries, ballet companies, vital cat picture websites, manufacturing, ketchup plants and the like. Being economical with labour is the very thing that makes civilisation itself possible. … William Nordhaus has pointed out…entrepreneurs – for devising a new process which uses different or fewer inputs is the very definition of entrepreneurship – end up with some 3 per cent or so of the value they create. The remaining 97 per cent flows to the rest of us in the form of consumer surplus.

By the way, I’m not surprised that Buffett is wrong. He’s goofed before when venturing into public policy.

Tim closes with a very important point.

Not enough people realise that using fewer resources to do something makes us richer. And yes, human labour is just such a scarce resource that we wish to economise upon using. Perhaps if people understood this, they’d stop arguing that solar power is better than nuclear because it produces more jobs for the same amount of electricity produced.

And since we’re on that topic, here’s an item from Libertarian Reddit revealing a leftist who genuinely seems to think that the goal should be to produce less per unit of labor.

Sounds like Ms. Kohn should spend some time with this video.

But I like to be even-handed in my disdain for bad economics. Trump is a protectionist who wants to preserve certain jobs in certain industries.

Well, I don’t know if this artist is a left-wing Trump critic or right-wing Trump critic, but he’s right about the foolishness of trying to stop progress.

But this brings me back to where I started. The VHS worker was a victim, just as the workers at Kodak were victims.

It’s the inevitable consequence of progress. But if we try to stop progress, we all lose in the long run. The best way to help workers and investors who suffer from creative destruction is to have pro-growth policies so that if you’re in a disrupted sector, you have plenty of opportunities to quickly rebound.

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Like many libertarians, I’ve always assumed that Thomas Jefferson was one of the best Founding Fathers.

He certainly was an advocate of liberty and I’ve cited him several times (see here, here, here, here, here, and here) over the years.

But maybe being quotable is not enough.

There’s a fascinating article in the latest issue of Cayman Financial Review that looks at the emergence of economic liberty in the Anglo-Saxon world and it makes a persuasive argument that Alexander Hamilton was a more effective advocate of free markets.

Written by a Washington-area economist who uses a nom de plume because of his position in government, the article starts by explaining that England’s Whig Revolution in the early 1700s helped create the conditions for astounding British prosperity. Notwithstanding resistance from the landed elites.

In England, the Whig Revolution was a series of events – the successful invasion of William  of Orange to dethrone James II in 1688, the selection of George I to succeed Queen Anne in 1714, and the selection of Robert Walpole as the first Prime Minister in 1721 – that created the Westminster parliamentary system… Most important, the Whig Revolution also created the institutional and legal framework that transformed England into a modern capitalist economy and sparked the Industrial Revolution. The adoption of Dutch commercial law, the creation of the Bank of England, and the circulation of its bank notes monetized the English economy. English courts abandoned the medieval “just price” doctrine, which let judges nullify contracts after the fact based on the concept that all goods and services had an objective value and any deviation from this just price should therefore be unlawful. …Traditional guilds collapsed. Entrepreneurs were free to create new firms, determine output and prices, borrow from banks, and issue stock. New manufacturing firms lured workers away from the estates of the landed gentry to rapidly growing English cities with wages paid in paper currency. …Rapid economic, political, and social change inevitably produced a reaction led by the arch-Tory Henry St. John, the First Viscount Bolingbroke. …To Bolingbroke, the Whig Revolution corrupted England… Bolingbroke rejected the legal and political reforms that created a modern capitalist economy. …But he failed to turn back the clock.

The same battle occurred on the other side of the ocean. albeit several decades later.

And most of America’s Founders apparently were not on the right side.

The Whig Revolution, which had allowed England to develop a modern capitalist economy, did not immediately cross the Atlantic. …In the 1770s, colonial legislatures still regulated the prices for many goods and services and forbade arbitrage and speculation. Colonial courts still accepted “just price” doctrine, allowing judges, all whom were members of a small oligarchy, to overturn contracts when market prices moved against colonial elites. And when crops failed or prices fell, colonial legislatures frequently declared “debt holidays” to prevent creditors from seizing the property of the colonial oligarchs. …Most of the America’s founders were from the small, wealthy elite in the colonies. Identifying with the English gentry rather than the rising middle class, Bolingbroke greatly influenced most of the founders’ views of economics and politics. Most founders, especially Thomas Jefferson and James Madison, agreed with Bolingbroke about the primacy of agriculture, shared his fears of banks and a paper currency, and dreaded industrialization. Most founders accepted Bolingbroke’s policy recommendations.

But Alexander Hamilton had a more enlightened outlook.

Alexander Hamilton was different than other founders. …Hamilton immigrated to America in 1773. Serving as General George Washington’s aide-de-camp, Hamilton observed how a weak Continental Congress imperiled the war effort. …Hamilton had a very different prospective from other founders with the notable exceptions of Washington and John Marshall. Hamilton wanted America to become a dynamic meritocracy. …Hamilton wanted poor, but talented individuals like himself to have avenues other than land ownership to earn wealth. Moreover, Hamilton rejected slavery because it prevented slaves from their full economic potential and made masters indolent and lazy. Moreover, Hamilton rejected racism. “The contempt we have been taught to entertain for the blacks, makes us fancy many things that are founded neither in reason nor experience.” During the Revolution, Hamilton proposed emancipating slaves that agreed to fight in Continental Army. Later Hamilton founded the New York Society for the Manumission of Slaves. Instead of Bolingbroke, Hamilton embraced the Whig Revolution and wanted to bring its economic benefits to the United States. …Moreover, Hamilton was staunch defender of property rights even when it was politically costly to him. As a lawyer in New York City, he successfully argued for the restoration of property of Englishmen and Loyalists that had been seized after the Revolutionary War in violation of the Treaty of Paris and the law of nations.

What about Hamilton’s protectionism?

He’s semi-guilty, but the author explains that Hamilton was mostly looking for a way of funding a modest-sized government.

And as I wrote last month, a modest tariff to fund a very small central government (as all the Founders preferred) would be a great improvement over what we have now.

Moreover, Hamilton even understood the basic principle of the Laffer Curve a couple of hundred years before Art Laffer’s famous napkin sketch.

While some future policymakers misused Hamilton to justify their protectionism, Hamilton was not a protectionist in the modern sense. …In a world in which income and value-added taxes had not been invented, …Hamilton favored a revenue tariff that averaged about 10 percent over a property tax to fund the federal government. Hamilton sought to maximize the federal government’s revenue and provide a modest margin of protection to domestic manufacturers rather than to block imports. Indeed, Hamilton argued: “It is a signal advantage of tax on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed – that is an extension of the revenue.”

I’m not fully convinced that Alexander Hamilton is a libertarian hero (that would entail support for free banking rather than his version of central banking), but I’m looking at him much more favorably after reading this article.

And I’m now significantly less sympathetic to Thomas Jefferson.

I’ll close on a wonky note. In my column about the would-be nation of Liberland, I cited some research on the relationship between “state capacity” and economic prosperity. The notion is that an economy won’t prosper unless a government is both strong enough and effective enough to deter aggression and to provide rule of law (while otherwise leaving the private sector unmolested).

I’m certainly no expert on the Founding Fathers, but it seems that Hamilton had that point of view.

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I periodically share data comparing the United States and Europe, usually because I want to convince people that America’s medium-sized welfare state is better (less worse) than Europe’s bloated welfare states.

In other words, Bernie Sanders is wrong.

But I sometimes feel guilty when making these unflattering comparisons because Europe – at least by world standards – actually deserves a good bit of praise.

If you look at Economic Freedom of the World, you’ll find that the 28 nations of the European Union (outlined in red) have relatively strong scores. Indeed, 27 of them rank in the top half, with Greece being the embarrassing exception.

And 17 EU nations rank in the top quartile, three of them above the U.S.

If you dig into the data, you’ll find that EU nations generally get crummy scores for fiscal policy, but misguided policies on taxes and spending are more than offset by superior scores for trade, monetary policy, regulatory policy, and quality of governance.

Now let’s look at some recent trends. I mentioned yesterday that I’m at the European Parliament in Brussels for a conference on economic freedom.

My friend Martin Agerup from Denmark gave an overview of economic freedom in EU nations, and I want to highlight some of his slides.

We’ll start with this modified ranking of economic freedom, which looks at where a hypothetical European nation would rank if it cherry-picked the best real-world scores (for the five major indices) of the various EU countries.

This hypothetical country, based on the best practices of various EU nations, would have the third-highest score for economic liberty – trailing only Hong Kong and Singapore.

This underscores my point about considerable economic liberty in Europe.

Martin also looked at trends in the European Union.

Here’s a slide looking at the evolution of economic freedom in Western Europe and Eastern Europe.

Three things are worth noting about this chart.

  • First, there was a dramatic improvement in economic freedom in Western Europe (blue line) from 1975-2000. Many people know about Thatchernomics, but there was a lot of pro-market reform in the rest of Europe.
  • Second, you’ll notice the giant jump in economic freedom in Eastern Europe (red line) from 1995-2005. The collapse of communism has resulted in vast improvements in economic liberty.
  • Third, the overall continent has seen comparatively little progress in recent years.

But averages can be deceiving. This next chart shows that some nations did rise and fall over the past decade. Many Eastern European nations boosted their scores by a modest degree, and Sweden also deserves a special mention.

Greece stands out for the worst performance in the past 10 years.

Which gives me an excuse to share one final chart from Martin’s presentation. Sweden suffered a deep crisis at the start of the 1990s, somewhat akin to what Greece suffered in 2008. But the two countries responded in radically different ways. Sweden shrank government and boosted economic liberty while Greece increased the size and scope of the state (aided and abetted by bailouts!).

This video has more details on the comparison of the two countries.

P.S. Notwithstanding the relatively nice things I just wrote about Europe, the continent faces some major fiscal challenges. And middle-class taxpayers, who already are being suffocated by high taxes, will probably get further pillaged.

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Not all leftists are alike.

I speculated a couple of years ago that there were four types of statists and put them on a spectrum. I put “rational leftists” at one end. If you wanted to pick a nation that represents this mindset, think Sweden. Nice, civilized, market-oriented, but plenty of redistribution.

On the other end of the spectrum were three less-palatable types.

  1. The “totalitarians,” which means a dictatorial state-run economy, as represented by the Soviet Union and China.
  2. The “socialists,” a democratically elected form of a state-run economy, as represented by post-WWII United Kingdom.
  3. The “crazies,” which I confess is a catch-all category to capture visceral, unthinking, and punitive intervention.

And for that final category, I listed Bernie Sanders and Greece as representatives.

And if you want to know why I listed Sanders, here’s some of Jeffrey Tucker’s FEE column from 2015.

Bernie Sanders, that sweet old socialist who we would have to invent if he didn’t exist in real life, elicited guffaws all over the Internet with his now famous comment about deodorant choice. “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers,” he said, “when children are hungry in this country.” …The underlying theory here is that the proliferation of deodorant and tennis shoes come at the expense of food for the poor. There is only a certain amount of wealth in the world, this thinking goes.

In practical terms, Sanders must think the world is zero-sum. I can’t be rich unless you are poor, and vice-versa.

Tucker explains that this isn’t true. Or, to be more accurate, it’s not true when markets are allowed to function.

That’s what was so captivating about the Industrial Revolution. All kinds of people were suddenly getting richer, and not by grabbing other people’s stuff. Wealth seemed to be actually expanding. ..Adam Smith…patiently observed how expansion of the division of labor, innovation, and trade — all based on secure ownership titles and free association — were working together to make everyone better off. This was not a zero-sum world. We escaped that fate long ago. …This was the single most marvelous discovery that economics made.

But because of his visceral disdain for markets, Sanders doesn’t trust free people to make decisions.

People who talk like Sanders imagine themselves in the position of dictators, deciding what social priorities ought to be. …What if they got their way? They would have to override billions of decentralized decisions. They would have to reject the judgements of millions of balance sheets. They would have to use massive force to prevent people from inventing, making bargains, striking deals, and buying and selling. It really does mean the end of freedom… It is for this reason that socialist central planning has brought reduced standards of living, poverty, and economic stagnation and chaos everywhere it has been tried.

And Sanders isn’t the only crazy.

Jeremy Corbyn’s economic views are also astoundingly bad, as explained by Andrew McKie for CapX.

…no matter how clueless and unrealistic the Labour leader is when it comes to Europe, that’s nothing compared with his failure to come to grips with the real world. Corbyn said: “I do not agree with or accept the idea there has to be competition in mail delivery. After all, we all have one letterbox, and it is much more efficient to have one postal delivery person coming down the street rather than three or four from different or competing companies.” …Corbyn isn’t just saying that Labour plans to renationalise the Royal Mail. …wave goodbye to Amazon Prime and next-day delivery from Asos, and say so long to FedEx, DHL or UPS and their guarantees. As for innovations that have just arrived or are in the works, such as universal same-day delivery and the use of drones, forget it.

McKie delves into the many reasons why Corbyn is so misguided.

The extraordinary point is that Corbyn really seems to think that, if there’s one of something, it’s neither realistic nor desirable that there should be any alternative on offer. Heaven forbid that you might think that you could make a choice, or that anyone else might provide a better, a cheaper or – in any way at all – a different service. …Corbyn’s “one-size fits all” approach ought to seem ridiculous, even if no one would laugh if they had to live in a country that operated that way. But he’s not joking; he really seems to think that all the reforms, the improvements in living standards, the economic growth and consumer choice of the last 40 years were a mistake, and that the state-run companies of Britain (then known as ‘the sick man of Europe”) were better. He doesn’t seem to realise that it is exactly the market – the existence of choice and competition – which led to those improvements, which drove innovation, drove up living standards, and drove down prices.

Everything Tucker and McKie says is spot on.

My two cents on this issue is that Sanders and Corbyn are guilty of two huge mistakes.

  • First, they think the economy is a fixed pie, which is laughably false. Just watch these videos by Don Boudreaux and Deirdre McCloskey. The simple lesson is that everyone can become richer at the same time. At least if they have decent policy.
  • Second, they have no idea of the valuable role of “creative destruction” in encouraging ever-more efficient and less costly ways of generating ever-more valuable goods and services. Watch this video and this video for more details.

You don’t need to be an economist to understand why Sanders and Corbyn are wrong. Normal people can look at how fast various nations grow (or don’t grow) and draw the appropriate conclusions.

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In yesterday’s column, I shared a humorous video mocking the everywhere-its-ever-been-tried global failure of socialism.

And I tried to preempt the typical response of my left-wing friends by pointing out that Scandinavian nations are not role models for statism.

In global ranking of economic liberty, Nordic nations score relatively high, with Denmark and Finland in the top 20. Scandinavian nations have large welfare states, but otherwise have very laissez-faire economic policies. Nordic nations got rich when government was small, but growth has slowed since welfare states were imposed.

Based on some of the emails I received, some critics have a hard time understanding this argument.

All of which is very frustrating since I’ve repeatedly tried to make this point. So I pondered the issue for hours, trying to figure out whether there was some way of helping people grasp the issue.

Maybe this chart from Economic Freedom of the World will help. It shows, based on the five major categories of economic liberty, that the once-significant gap between the United States and Scandinavia has almost completely disappeared.

In other words, anyone who claims that Scandinavian nations are socialist must also think that the United States also is socialist.

To be sure, there are differences. If you look at specific categories of economic liberty, America gets a noticeably better score than Nordic nations on fiscal policy.

But we get a significantly worse score for governance issues such as property rights, corruption, and the rule of law.

We also do a bit worse on trade and slightly better on regulation.

The bottom line is that both the United States and Scandinavian nations are market-oriented, but also saddled with plenty of bad government policies. If that makes us socialist, then what’s the right term for nations where government has a much bigger footprint, such as France, Italy, or Greece?

How about Venezuela and Zimbabwe?

Or North Korea and Cuba?

What I’m saying is that there’s a spectrum and we should be cognizant that there are different degrees of statism. And nations closer to one end are much different from countries closer to the other end.

Plenty of other people make similar arguments about the Nordic countries.

Tim Worstall, writing about Finland for CapX, emphasizes the laissez-faire nature of Scandinavian nations, while also pointing out that there’s a degree of decentralization that makes big government somewhat less inefficient.

…high tax rates do indeed reduce economic growth rates by undercutting incentives. So do interfering bureaucracy and state planning. And so if you’re going to go overboard on one of those two then you’ve got to be minimalist on the other point. In other words, you’ve got to kill off bureaucracy in order to leave room for the tax rates and still have a growing economy. …That is more or less how Finland and other Scandinavians do things. …The other important point is quite how decentralised they all are. …A much larger piece of the pay packet goes to the local government… That money raised locally is then spent locally too. …There’s thus an efficiency to the system, something that gets lost when…people send their cash off to the national government to be distributed without that local accountability. …if you want that Scandi life then you’ve got to do it as they do. Very local government and taxation plus a distinctly less economically interventionist government.

Amen. Local government oftentimes is bad, but it’s rarely as bad as a centralized system.

I also found a must-read 2016 article for FEE by Corey Iacono.

Democratic socialism purports to combine majority rule with state control of the means of production. However, the Scandinavian countries are not good examples of democratic socialism in action because they aren’t socialist. In the Scandinavian countries, like all other developed nations, the means of production are primarily owned by private individuals, not the community or the government, and resources are allocated to their respective uses by the market, not government or community planning. …it is true that the Scandinavian countries provide…a generous social safety net and universal healthcare, an extensive welfare state is not the same thing as socialism. …The Scandinavians embrace a brand of free-market capitalism… The Economist magazine describes the Scandinavian countries as “stout free-traders who resist the temptation to intervene even to protect iconic companies.” …These countries all also rank in the top 10 easiest countries to do business.

If you don’t believe Worstall and Iacono, check out this table of data I prepared back in 2015.

I took the Economic Freedom of the World rankings and I removed the variables for fiscal policy.

And what you find is that Denmark, Sweden, and Finland were all in the top 10 for economic liberty. And Norway was #14.

That’s compared to #24 for the United States.

Heck, there were plenty of other European nations that ranked as being more free market than the United States.

So we should be grateful that we only have a medium-sized welfare state. Because our better score on fiscal policy helps to offset our comparatively anemic scores on the other four variables.

Having pointed out that the United States now has only a rather small advantage over Scandinavian nations when looking at all five measures of economic liberty, that’s still better than nothing.

It probably explains, for instance, why Americans of Scandinavian descent earn so much more than their cousins who remained back home.

And why Americans of all backgrounds generally enjoy higher living standards than folks in Europe, even the ones in Nordic nations.

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