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Thursday, May 5, 2016

Does “Socialism” Work? A Tenuous Reason Not to Feel the Bern?

Bernie Sanders’ steadily growing popularity has spawned some admittedly funny memes attacking his economic views.  But humor aside, I find that there’s little empirical evidence supporting some of the various economic arguments leveled against “socialism”, or what passes for it in common parlance.  And for what it’s worth, I say this as someone who does not plan to vote for Sanders in the general election (too socially liberal for my taste).

To demonstrate this chasm between rhetoric and reality, I use the latest data from the World Bank in comparing the United States with the traditionally social-democratic countries of Scandinavia - both individually and as a group - and Canada with respect to how these countries fare on four key economic indicators.  I included Canada in this comparison simply because it more closely resembles the U.S., and may therefore be the easiest to emulate (if, in fact, it turns out that it’s a country worth emulating).

The blue figure in the table below refers to the only indicator on which the U.S. is performing better overall - annual per capita growth in GDP. By contrast, the red figures indicate that the U.S. fares worse on inflation, unemployment (only Sweden’s unemployment is higher, but only slightly so), and especially indebtedness. As a percentage of GDP, America’s central government debt is more than twice the size of that of the Scandinavian region.

Further, it’s worth noting that, while Canada and the Scandinavian countries (as a region) fall behind the U.S. when it comes to economic growth, Sweden leads the entire group with an annual average of 1.55% - showing that social democracy does not necessarily impede growth.

Overall, “socialist” countries and, to a lesser extent, Canada outperform the U.S., at least on these particular indicators. Does this necessarily mean that we should recreate our country in the image and likeness of Sweden? I personally don't think so (perhaps I’m naïve, but I think that it’s possible to create a more just economic system that is nonetheless distinctly American).  But I do believe that Sanders is right when he suggests that we should have the collective humility to admit that there may be certain things that we can learn from other countries, just as there are things that they can learn from us.