Randy Lioz

Randy Lioz

Randy Lioz is the director of the California office at Better Angels, as well as a regular moderator of red-blue and skills workshops, having formerly spent his career in the auto industry. Randy lives in Irvine, CA, and spends much of his time in front of a soccer goal or beside a friendly mutt. His column is published regularly at The Conversation.

The Nordic Model, and Why Reds and Blues Need Each Other

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In the younger days of the Internet, when Facebook was first hitting its stride, the world felt a boundless sense of optimism about the potential of this technology to bring us closer together. We marveled that with the click of a mouse we had access to millions of other people all over the planet, with new ideas and perspectives.

These days more than half the world population is online, with over half of those people using Facebook. But we seem a lot less optimistic about technology’s potential to bring us together, and much more wary of its power to tear us apart. It’s within this newer environment, though, that I’ve been more deliberate about getting into political discussions on Facebook, especially recently.

Yes, with the wrong approach, these conversations can easily devolve into accusations and name-calling, but we shouldn’t let the frequency of these pitfalls leave us blind to the potential we saw all those years ago. Facebook and other discussion forums can give us a chance to probe the minds of those with views that are very different from our own, and approached with a reasonable dose of intellectual humility, we may just find ourselves looking at issues from a new perspective.

So it was with the ongoing conversations on my wall about socialism and the way each side talks about it, which started with my posting Paul Krugman at the New York Times laying out the case that Sen. Bernie Sanders is not in fact a socialist, but “plays one on TV.” I share the perspective that Sanders is more or less the equivalent of what Europeans call a “social democrat”—a notion echoed by actual, hard-core socialists—and Krugman argued that “personal branding” has led to his keeping the Democratic Socialist moniker, which sounds about right.

As these things go, it wasn’t long before we had arrived at the “Nordic model” portion of the conversation on Facebook, and one of the conservative commenters shared a link to a documentary about the Swedish economic system and what Americans might learn from it. It’s produced by the Libertarian Free to Choose Network, so naturally it focused particularly on the lessons that most align with that perspective. Regardless of its political slant, I found it to be a compelling exploration of Sweden’s free-market intellectual roots, and of the dangers of a country or region going too far in the direction of Marxism.

And in line with the critique of my red friend, that many blues are less familiar with the more right-leaning aspects of that Nordic model, I found some surprising elements, such as the Swedish insistence that the free market handle many of the services that remain publicly administered in many other countries, such as K-12 schooling and municipal services. Their health system may be single-payer, as some in the US advocate should be adopted here, but it’s far from the nationalized systems in other places, like the UK’s National Health Service.

And the Swedish tax system relies more heavily on value-added taxes—a form of sales tax—which disproportionately impact the less well-off, and which American progressives have been less eager to embrace. Overall the Nordic system does tend to spread the taxation burden more evenly, which many see as more egalitarian, even if it impacts the spending power of those with lower incomes more acutely.

The documentary also explored how Sweden flirted with true socialism, as the government in the ‘70s and ‘80s began to enforce policies that increasingly expropriated ownership of its enterprises toward workers, which nearly led to economic disaster.

Clearly there are ways in which progressives believe the Nordic model still strongly supports the message that they’ve embraced. They latch on to the idea that Sweden does indeed have quite high income taxes, especially on high earners, with a top marginal tax rate of 60%, which still supports a robust welfare state. We see the benefits of this type of system as both social stability and social mobility, with families offered plenty of support services, including those that make career advancement possible. This includes not only higher education, but robust healthcare, which are both guaranteed rights. These two issues, and the questions of our right to each, are a big part of the Democratic message in the U.S. right now.

While these welfare services are often provided by private companies, it’s the government that foots the bill, and public spending is over 50% of GDP. Swedes are also quite socially liberal, with a big focus on environmentalism, and private enterprise is a major source of advancement of green technology.

One big reason that this pairing of free market solutions with government funding works so well in Nordic countries but not as much here seems to be our campaign finance system, whereby industry is able to capture government and harness it for its own benefit. For example, when we have private companies taking over either government services (like prisons) or non-profit sectors (like colleges) there are often severe abuses and little accountability. 

Therein lies the danger of looking at a narrow aspect of another country to serve our political ends, while ignoring the other factors that contribute to its success. Sure, we could have highly unfettered businesses subject to little regulation, but they wouldn’t contribute to the common good nearly as much if it weren’t for the publicly funded education and health systems that free them up to use healthy and well-educated labor to achieve max efficiency. Nor could they be as successful if their employees, particularly women, were worried about finding child care or help with their aging parents. 

And we can have that high level of social services, but it would balloon the debt even more quickly if we don’t harness the power of capitalist competition to ensure that our tax dollars are being spent efficiently. And while Sweden has a high level of labor unionization—almost 70%—those unions are able to push up wages because of their cooperative relationships with employers and their embrace of factors like free trade and technological progress, something that seems to be completely absent among U.S. labor unions. In fact, despite having no minimum wage laws, Sweden’s income inequality is far lower than that of the U.S. There are certainly other factors at play here, but it remains plainly clear that maintaining a living wage for citizens does not necessarily require government interference.

I came away from the conversation around this film more convinced than ever that Americans who lean left and right offer one another a crucial counterbalance to stave off our worst excesses; reds and blues need each other, and we each help to make the other’s ideas better. It’s time for each side to display some humility and vulnerability to be able to accept criticism along with credit. 

What this means on the blue side is that we must stop demonizing the system of capitalism, even as we rightfully focus on its pitfalls. The vast majority of Americans—including Democrats—believe that capitalism is not only the most efficient, but also the most just way of running our economy and allocating resources. As progressives, we need to emphasize that a capitalist system—one built upon true equality of opportunity and a high level of protection from corporate predation—is the best way to seek the economic justice that we have set among the highest of our goals.

As Bernie extends his lead against his more centrist rivals, this also means that we must once and for all deal with the misuse of the word socialism, especially in light of our vulnerabilities to criticisms of our past. Bernie’s past positions were, in fact, more purely in the vein of true socialism. In the 1970s he did actually call for the nationalization of many major industries. There is no doubt this would be used against him in the general race, and it would absolutely terrify millions of Americans.

But Bernie Sanders has moved on from this phase of his career, and politicians can reasonably be expected to shift their beliefs over time with experience; this shift is a natural one as the world has learned more and more about the failures of authoritarian socialism and property appropriation. To claim that Sanders wants to abandon capitalism is just as absurd as falsely claiming that he harbors sympathies for socialist authoritarian regimes, like that of Venezuela.

If Bernie hopes to have any chance of winning the presidency, though, the burden of clearing up these misconceptions falls squarely on his shoulders. That should start with eschewing the Democratic Socialist label. At the very least, he must be absolutely clear about what his policies do not mean: confiscation of private property.

When asked to clarify what the term actually means, he seems to lean on the same platitudes as other Democrats to describe the outrageous wealth disparities and economic injustices of our current system.

“What Democratic Socialism is about,” he explained during the last election cycle, “is saying that it is immoral and wrong that the top 1/10th of 1 percent in this country…own almost as much wealth as the bottom 90 percent. That it is wrong today in a rigged economy that 57 percent of all new income is going to the top 1 percent.”

He also emphasizes that public goods like health care and education should be seen as a right, and not something that should be plunging millions of Americans into debt. Those may have been fairly novel ideas for the Dems way back in 2016, but by now they are mainstream, and we certainly have Sen. Sanders to thank, in part, for that. But there are ways to advocate for those types of policies without donning the mantle of Democratic Socialism, and indeed I would argue that doing so would be much more effective.

Bernie must make absolutely clear where he stands on capitalism and free markets. There can be no room for confusion about whether he wants “the people” (read: government) to own the means of production. And he and the Democrats must also be willing to learn some lessons from the Nordic model that they have so passionately pushed, talking openly and honestly about topics like school vouchers and the minimum wage.

It would also help if they would focus less on demonizing those who benefit from the current system—often through no fault of their own—like the wealthiest in society, and more on building a culture of trust and social cohesion that allow us to address the root causes of that system in an inclusive manner.

Republicans and Democrats each have a unique way of looking at exemplars like the Nordic model, and drawing interesting lessons from them. But we need each other to help cover our blind spots, and ensure that we don’t fall under the thrall of a set of ideas that we don’t fully understand. Only together can we really be the best version of ourselves, and to honestly pursue a more perfect union. 

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3 thoughts on “The Nordic Model, and Why Reds and Blues Need Each Other”

  1. Good article – even if the advice to Bernie may come too late. (He should have labeled himself a social democrat, not a democratic socialist – there’s a crucial difference in meaning between a noun and an adjective.)

    What Bernie’s campaign agenda really boils down to is the unfairness of crony capitalism, a position most reds and libertarians would agree with. Ironically, this sentiment is what fans the flames of the Trump phenomenon: a backlash against the elite establishment that seems to have mostly pushed its own self-interested agenda, whether in business, media, or government. But one must still wonder why Bernie insists on labeling himself a socialist, even if a democratic one (something that doesn’t really exist in reality as all socialists eventually become authoritarian, for the communal good, of course).

    1. Thanks, Michael. I actually wrote this while Bernie was surging and many were calling him the nominee to beat. Astute comments.

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