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Danish 'socialism' is good for business

By       Message Brian Cooney       (Page 1 of 1 pages)     Permalink    (# of views)   4 comments

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From flickr.com/photos/67402116@N02/6268219958/: Copenhagen
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A recent Marketplace-Edison Research Poll reports that a large majority of Americans support a social safety net to address needs that would go unmet in a purely market-based distribution of goods: "more than three quarters" agree "that the federal government should be providing unemployment benefits to those who lose their job, food stamps to the poor, college tuition assistance to low- and middle-income families, subsidies for health care benefits and job training programs."

Today's Republican Party tries to undermine this broad consensus by claiming that a government big enough to support a robust safety net is a threat to our freedom and prosperity. Bernie Sanders' self-imposed label of "democratic socialist" and his praise for Denmark are a gift to the GOP, allowing it to invoke images of a Soviet-style economy and overbearing government. However, the real Denmark has BOTH a thriving free-market capitalist economy AND generous social programs.

Freedom is a nearly absolute value in American culture. We all agree that government should not expand in a way that threatens fundamental personal liberties, or undermines the incentives and entrepreneurial freedom necessary for economic prosperity.

But phrases such as "government size" or "big government" are ambiguous. They can mean two very different things: (a) the size of the budget or slice of the GDP spent on government activity, and (b) the scope of government activity, the range of different functions carried out by government.

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For instance, two people could disagree over whether health care should be within the scope of government, while agreeing on the ratio of government spending to GDP. Or vice versa. Moreover, they could agree that the budget has grown too large while strongly differing over which programs should be trimmed.

Everyone agrees that national defense is an essential role of government. But is it important and urgent enough that the U.S. should spend more on defense than the next seven countries combined , while spending less per capita on social programs than any other advanced capitalist nation?

Conservatives like to warn that the coercive power of the state is behind all laws and government regulation. In enforcing laws, the government can legitimately resort to violence if necessary. Therefore a free people will want to minimize coercion by minimizing both the size and scope of government.

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In its extreme form this fear of coercion leads to a paradox. Many conservatives accept big government in the form of a national security state. They tolerate heightened domestic surveillance, aggressive policing and the huge expense of a military that operates as a planetary police force, all to protect them against coercion and violence at home and abroad. This paradox drove Rand Paul to ask Marco Rubio at the last GOP debate: "How is it conservative to add a trillion dollars in military expenditures?"

The Wall Street Journal and The Heritage Foundation annually publish a ranking of countries in their " Index of Economic Freedom ." It defines economic freedom as "the fundamental right of every human to control his or her own labor and property." The Index ranks Denmark 11th, higher than the U.S. at 12th place. Yet Denmark spends much more of its GDP on government (57.2%) than the U.S. (40.1%). The Index also ranks Canada, Ireland and New Zealand higher than the U.S. even though they also spend more on government.

Forbes Magazine publishes an annual list of "Best Countries For Business." It ranks Denmark no. 1, and ranks all the Scandinavian countries higher than the U.S. It calls Denmark "one of the most entrepreneurial countries in the world" because of the ways it facilitates business start-ups with a minimum of bureaucracy. The World Bank ranks Denmark 3rd in the world for "ease of doing business."

Government spending is a major contributor to the favorable business climate in Den-mark. Jon Weis, an economist at Moody's Analytics, praises Denmark's costly program of "flexicurity," which creates a flexible labor market by providing generous unemployment benefits and job re-training for laid off workers. "The model encourages economic efficiency where employees end up in the job they are best suited for," says Weis. "It allows employers to quickly change and reallocate resources in the workplace."

Although Denmark, Norway and Sweden all have governments with greater scope and budgets (proportionally) than the U.S., they are in the top ten countries with the highest GDP per capita. So the strong connection conservatives allege between increasing size of government and decreasing level of economic freedom is at odds with the facts. Socialism, in the Bernie Sanders sense, can be good for business.

 

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I'm a retired philosophy professor at Centre College. I also am a regular columnist for The Danville Advocate-Messenger,the local paper in what was my home town (I now live in Connecticut. My last book was Posthumanity-Thinking Philosophically (more...)
 

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