June 09, 2016

Today the MassPoliticsProfs welcome a guest post from Professor Erik Cleven. He is an assistant professor at Saint Anselm College in Manchester, NH. Professor Cleven teaches courses in international relations and comparative politics, and his research interests include ethnic violence and domestic and transnational terrorism.

During the presidential primaries much attention has been focused on Bernie Sanders’ claim to be a democratic socialist. Sanders himself has urged people to look to the small countries of Scandinavia to see that socialism can work. This has elicited a number of responses. Hillary Clinton has said the United States is not Denmark and that what makes the US unique is its spirit of entrepreneurship. The Danish Prime Minister, Lars Løkke Rasmussen, has clarified that his country is not socialist, but rather a market economy. Recently The Atlantic ran a long essay explaining that Sanders is not a socialist and that the United States is not capitalist.

Answering the question of whether or not the Scandinavian countries (Denmark, Sweden, Norway) are socialist depends on having a definition of socialism. Most often socialism at a minimum is associated with government ownership of firms, and centralized control of the economy. The Scandinavian countries have, in the past, had large firms that have either been fully or partially government owned, but the share of government ownership in forms has declined since the 1980s.  In fact, Scandinavia is considered a friendly environment for private enterprise. Instead, the Scandinavian countries are generally seen as socialist because they have public health care systems, unemployment insurance, generous maternity (and paternity) leaves and sick leave.  If socialism is thus re-defined as the kind of economic and political system that enable these policies, then these countries are obviously socialist. But this approach is not very enlightening and does nothing to show what makes these countries unique, nor does it help answer the question if and how similar policies can be implemented in the United States. In fact, the focus on whether Sanders, and the Scandinavian countries, are socialist diverts attention from what might really be learned from Scandinavia.

Rather than socialism, what makes the Scandinavian countries stand out is that each one has a system of institutional structures and practices that is better described as corporatism. Simply put, this means that government, labor and business interests are considered partners in the negotiation of economic policies. The government consults with and includes civil society organizations in the policy formation process, and labor and business interests regularly engage in collective bargaining, the results of which are respected and implemented by the government. While Scandinavia’s wealth is produced through market economies with participation in world markets, domestically all three countries have a tradition of government consultation with civil society, collective wage bargaining and consensus seeking. But how did this system evolve?

The answer lies with the region’s institutions. The Scandinavian countries’ parliamentary systems took their modern form in the nineteenth century. At the same time, a rich civic life developed with active involvement in many civil society organizations. Labor parties arose at the end of the nineteenth century. By the end of the Second World War, the labor parties in these countries were strong, but with parliamentary systems and proportional representation, these parties were often forced to lead minority governments. This in turn required bargaining and cooperation of a different kind than in Great Britain, which often has majority governments, and the United States with its separate executive branch. All three Scandinavian countries have developed central trade union associations and central business associations, which engage in collective bargaining as an annual ritual. The result has been compromise between business and labor interests leading to welfare policies embedded in capitalist market economies.  Certainly this requires a strong labor movement, but this system of bargaining and compromise, much more than socialism, is what characterizes the Scandinavian countries and is also why the “Nordic model” persists, even under conservative governments. Perhaps as a result of this social consensus model, Scandinavians have much higher levels of trust in government than Americans do.

There are examples of cooperation between government, business and labor in the United States too. One need only look to the production of cotton. Government funded research universities, agribusinesses like Monsanto, and cotton growers are linked in a tight system of cooperation, with government funding that economist Pietra Rivoli has referred to as a “virtuous circle.” This system makes it extremely difficult for cotton growers in developing economies to compete with American cotton. Hardly a free market system. But, while this cooperation in the US mainly benefits a narrow sector of the economy, in Scandinavia the cooperation spans across most economic sectors. In the United States, this system arose because the executive is elected separately from the legislative branch. This means that the President does not rely on a majority in Congress to stay in power, and members of Congress in turn have weak ties to political parties and are much more influenced by the interests of narrow sectors of society – interest group lobbying. Political scientists call this pluralism.

Recent polls have shown that millennials support Bernie Sanders over Hillary Clinton by wide margins. Many would reportedly also readily choose socialism over capitalism, and resonate with Sanders’ description of himself as a democratic socialist. It is not entirely clear why young people see socialism in such a positive light, but it is not too difficult to imagine that they would like to live in a society where there is more trust and less polarization, where health care is a right, and people are equal, not just on paper, but also with regard to the possibility of social mobility and economic inequality. If one is serious about these goals, one should look at what really characterizes the countries we look to as examples rather than use broad labels that come with significant ideological and historical baggage, and that obscure more than they clarify. Both Denmark and the United States have democratic institutions, but our democratic institutions are quite different from Denmark’s and pose significant challenges to policy making that Scandinavian countries do not face. The real question is not whether the United States is Denmark, or whether Denmark is socialist, but whether the US can follow the same path as Denmark or the other Scandinavian countries. Looking to the role that institutions have played in the evolution of each country’s societies, it is not clear that the United States can even develop consensus about the desirability of reaching the goals, let alone reach the goals themselves.

Erik Cleven is Assistant Professor in the Department of Politics at Saint Anselm College in Manchester, NH.

socialism, Scandinavian socialism, Bernie Sanders

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