Scandanavian Socialism – Not All It’s Cracked Up to Be

From Bruce Bawer in the NYT:

The received wisdom about economic life in the Nordic countries is easily summed up: people here are incomparably affluent, with all their needs met by an efficient welfare state. They believe it themselves. Yet the reality – as this Oslo-dwelling American can attest, and as some recent studies confirm – is not quite what it appears.

Even as the Scandinavian establishment peddles this dubious line, it serves up a picture of the United States as a nation divided, inequitably, among robber barons and wage slaves, not to mention armies of the homeless and unemployed. It does this to keep people believing that their social welfare system, financed by lofty income taxes, provides far more in the way of economic protections and amenities than the American system. Protections, yes -but some Norwegians might question the part about amenities.

In Oslo, library collections are woefully outdated, and public swimming pools are in desperate need of maintenance. News reports describe serious shortages of police officers and school supplies. When my mother-in-law went to an emergency room recently, the hospital was out of cough medicine. Drug addicts crowd downtown Oslo streets, as The Los Angeles Times recently reported, but applicants for methadone programs are put on a months-long waiting list.

[…]

All this was illuminated last year in a study by a Swedish research organization, Timbro, which compared the gross domestic products of the 15 European Union members (before the 2004 expansion) with those of the 50 American states and the District of Columbia. (Norway, not being a member of the union, was not included.)

After adjusting the figures for the different purchasing powers of the dollar and euro, the only European country whose economic output per person was greater than the United States average was the tiny tax haven of Luxembourg, which ranked third, just behind Delaware and slightly ahead of Connecticut.

The next European country on the list was Ireland, down at 41st place out of 66; Sweden was 14th from the bottom (after Alabama), followed by Oklahoma, and then Britain, France, Finland, Germany and Italy. The bottom three spots on the list went to Spain, Portugal and Greece.

Alternatively, the study found, if the E.U. was treated as a single American state, it would rank fifth from the bottom, topping only Arkansas, Montana, West Virginia and Mississippi. In short, while Scandinavians are constantly told how much better they have it than Americans, Timbro’s statistics suggest otherwise. So did a paper by a Swedish economics writer, Johan Norberg.

Contrasting “the American dream” with “the European daydream,” Mr. Norberg described the difference: “Economic growth in the last 25 years has been 3 percent per annum in the U.S., compared to 2.2 percent in the E.U. That means that the American economy has almost doubled, whereas the E.U. economy has grown by slightly more than half. The purchasing power in the U.S. is $36,100 per capita, and in the E.U. $26,000 – and the gap is constantly widening.”

The one detail in Timbro’s study that didn’t feel right to me was the placement of Scandinavian countries near the top of the list and Spain near the bottom. My own sense of things is that Spaniards live far better than Scandinavians. In Norwegian pubs, for example, anyone rich or insane enough to order, say, a gin and tonic is charged about $15 for a few teaspoons of gin at the bottom of a glass of tonic; in Spain, the drinks are dirt-cheap and the bartender will pour the gin up to the rim unless you say “stop.”

In late March, another study, this one from KPMG, the international accounting and consulting firm, cast light on this paradox. It indicated that when disposable income was adjusted for cost of living, Scandinavians were the poorest people in Western Europe. Danes had the lowest adjusted income, Norwegians the second lowest, Swedes the third. Spain and Portugal, with two of Europe’s least regulated economies, led the list.

Of course, consumption isn’t everything, but surely the unavailability of relatively cheap booze counts against Nordic social democracy!