# Scandinavian Economic Trade-Offs Are Good

11 thoughts
last posted Feb. 19, 2016, 8:18 p.m.
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Thoughts on arguments made in some anonymous dude’s old blog post from 2012, ‘The Scandinavian Socialism Utopia is Bullshit’.

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Writer’s central claim is “The problem is that the success of Scandinavian socialism is a myth. It’s false. It doesn’t work for them and it wouldn’t work for us.”

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First argument: “Scandinavia isn’t really all that socialist”

Writer gets off to a very rocky start here. The argument goes as follows:

1. Scandinavian countries rank higher than the US in many indicators of business and economic freedom
2. Therefore socialism is not working for these countries.

A smart writer would have avoided #1 as obviously fatal to his whole argument. But this guy bravely goes there, God only knows why.

If one wanted to quibble about the definition of socialism, this would be a great place to, you know, bring up the definition of socialism. But this writer gives no indication of knowing what socialism is or even offering a provisional definition. Instead he says that capitalism = freedom and Scandinavian countries have more freedom so they are obviously capitalist — but we should still not be like them because socialism is bad.

Forget about whether what Scandinavian countries do is or isn’t socialism. Are their economic policies good or not? The writer obviously got lost in the weeds here.

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Second Argument: “2. Scandinavia isn’t actually as prosperous as liberals like to claim”

Writer does not offer any examples of liberals claiming given levels of prosperity, so he is free to take whatever measure he likes and just say it is not good. So, first problem, nothing of substance is being demonstrated.

He depends for this argument on a single Swedish group paper comparing per-capita GDP to that of individual US States.

So, second problem, if you want to know how the majority of people are doing economically, averaging GDP across the population is a profoundly stupid way to do it. This is basic middle-school math.

If you have a country of 90 people who each generate $10 of GDP working for 10 people who generate$100,000 of GDP, the GDP per capita is close to \$100k. But most of the people in this hypothetical country are dirt-poor; it’s the few who are making up nearly all that average. (Which is the case in America, no one disputes this)

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One correct way of comparing economic outcomes would involve taking median incomes (not average) and adjusting them for cost of living in different areas.

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In general though, by using a suspect measure of prosperity the writer makes himself vulnerable to the left’s argument for Scandinavian policies, which is that it’s better to live in a country where most people can live decent lives than one where the wealth is super-concentrated.

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Third Argument: “Scandinavians have lower gross and disposable incomes”

Argument depends on averages again instead of median incomes, failing in the same way as above. U.S. average incomes are distorted by extreme wealth at the top sliver of the population; the vast majority of households are not seeing those income gains.

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Writer first claims it is not possible to compare poverty levels between the US and other countries because there are many definitions of “poverty”. He might as well have deleted this part (as you will see in a moment), but this is amusing, because he had no problem making use of actual bullshit rankings like “business freedom” and “fiscal freedom” when he was busy shooting himself in the foot in his first argument above.

It’s easy to tell he couldn’t find anything in the literature supporting his preferred result, not even at his favourite linkees like Heritage and Cato, so the best he can do is gesture and mumble about how confusing it all is.

Possibly knowing this is a silly argument, he then completely concedes the point by allowing that Scandinavian countries do have lower levels of poverty, but then asserts that it is not because of “taxes” (by which I assume he means welfare). In support of this causal claim he brings up these points:

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He then makes the point that immigration populations affect poverty levels.

This does nothing to support his argument that welfare doesn’t help the poor. Immigrant populations are always going to be poorer then the rest of the populace no matter what country you’re talking about, because immigrants tend to face disadvantages that limit their economic participation. The question is, would these immigrants be better off or worse off without transfer incomes? Nowhere does the writer address this.

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Fifth Argument: “Norway is Backed by Big Oil”

Writer says “a significant portion of Norway’s per capita GDP is based on oil revenues.” He doesn’t say how much, but it’s actually between 8–10%.

He then says “In other words, Norway is successful despite its government, not because of its government.”

This is a complete non sequitur. Every country’s economy is made up by various industries. You might as well say “Wisconsin has a lot of cheese, thus they are successful despite government intrusion.”

It’s interesting to note what Norway actually does with its oil money (short version: it all gets reinvested outside Norway; only 4% of it is actually spent by the state).

In any event, I’m not sure how sniping at Norway in particular represents any kind of win against Scandinavian economic policies.

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Sixth Argument: “Scandinavians aren’t as happy as Americans”

Writer brings up suicide rates as, I guess, a proxy for economic results.

The simple explanation for this is that frozen darkness is depressing and this has nothing to tell us about Scandinavian economics.