Socialists supporting Scandinavia are embracing neoliberalism

Matt Gillow

July 3, 2018

The Scandinavian countries have often been the focus and envy of the Western world. Low crime rates, low unemployment, next-to-no deficit and fantastic public services. Bernie Sanders invigorated millions with his call for Scandinavian-style “democratic socialism”. But there is a catch: Scandinavia isn’t socialist.

Sure, they currently boast some of the highest rates of income tax in the West, but there are certainly lessons to be learnt from looking to Scandinavia — they consistently cluster at the top of leader boards for education, health, happiness, work rates and transport.

Sweden, Denmark and Norway have developed a penchant for what works. Their famously efficient public services — to which ideologically-driven socialists often point — are often run by private firms.

Indeed, they are die-hard free traders, and they resist the urge to intervene when even their most iconic companies need support. For them, balancing the books and lowering deficits is tantamount. Norway, for example, has a surplus of six per cent of GDP, and Sweden saves $600 billion in a sovereign wealth fund. They are by no means the tax and spend nanny states that many socialists believe them to be.

In Britain, I have heard plenty of socialists make the false claim that Jeremy Corbyn isn’t actually the pure red socialist that he’s made out to be, but actually remarkably centrist — as “in Europe all of his policies are pretty normal!” They would, given their way, have us believe that he’s following the lead of the Scandinavians — and “why wouldn’t we want to emulate some of the most prosperous countries in the world?!”

Well, to an extent, they are correct: we should be looking to Denmark, Sweden and Norway for evidence of sound policymaking that works. But, truthfully, many of the policies espoused by their respective governments are the exact policies that Corbyn’s Labour spends its time railing against here in the UK.

Denmark, for example, has less regulation and is more respectful of private property than the UK. Instead of a state-mandated minimum wage, employers and unions negotiate terms. Labour laws are more flexible and give employers more ease when hiring and firing — keeping the labour market more fluid and improving employment levels. A thriving private school system is supported by an educational voucher policy proposed initially by the darling of the liberal Right, Milton Friedman. It’s Health System, so often celebrated by the Left, is propped up by a strong private health sector (40% of Danes have private health insurance).

The former Danish Prime Minister, Lars Rasmussen, himself affirmed a commitment to neoliberalism in a speech to Harvard University: “Denmark is far from a socialist-planned economy. Denmark is a market economy.”

Yes, income tax rates are higher than many neoliberals would wish, but corporation tax in Scandinavia hovers around the bottom when compared to the EU15. Indeed, Scandinavian countries have shelved the regressive inheritance tax.

The point is, therefore, quite a simple one. Underpinning high income tax rates and relatively high spending in social services (though the private sector plays a larger role in education and health than in the UK), is a thriving embrace of free enterprise within a market economy.

Indeed, neoliberalism is the belief that free markets are exceptionally good at creating wealth, though not always good at distributing wealth; so a form of redistribution, in the form of social insurance for example, is not only legitimate but also something to be desired.

I absolutely welcome the obsession with the Scandinavian paradise. In fact, it’s probably one of the only things with which I fervently agree with some Corbynistas. Perhaps it is time the UK looked to our close neighbours — but those who call for that should know they are embracing a firm set of beliefs in the free market and individual liberty. So, more neoliberalism? Sounds good to me.


Matt Gillow is a Co-founder and Director of Strategy of 1828.


  • Matt Gillow

    Matt Gillow is co-founder of 1828 and communications and events manager at the British Foreign Policy Group.

Written by Matt Gillow

Matt Gillow is co-founder of 1828 and communications and events manager at the British Foreign Policy Group.


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