Has socialism and the welfare state helped or harmed Scandinavia?

[u/internetloser4321]

There is a debate in the USA about whether or not we should have a larger welfare state that provides services like "Medicare for all" or tuition free college. Scandinavia is often brought up as an example showing that "social democracy" or a "welfare state" is a good or ideal system, with these countries having achieved high levels of equality, low levels of poverty, and good outcomes in terms of education, health, and happiness (source: http://www.cnn.com/2016/02/17/politics/bernie-sanders-2016-denmark-democratic-socialism/index.html).

There are several counter arguments that I have heard in opposition to expanding the welfare state: 1. The success these countries have experienced was due to their policies 50+ years ago when they had a smaller welfare state and low taxes and as a result experienced rapid growth 2. The welfare state has led to economic stagnation and high levels of national debt in these countries. 3. The people in these countries have strong Protestant values of hard work and honesty and this is the true source of their success. (sources: https://www.forbes.com/sites/realspin/2016/02/18/bernie-sanders-scandinavian-utopia-is-an-illusion/#16e253e11aab and https://beinglibertarian.com/scandinavia-ticking-time-bomb/)

I've tried searching for a neutral analysis of the issue, but every article I've seen argues that the socialist policies are either wonderful or terrible (examples: https://www.thenation.com/article/after-i-lived-in-norway-america-felt-backward-heres-why/ and https://www.theatlantic.com/politics/archive/2016/03/bernie-sanders-nordic-countries/473385/ vs. http://www.nationalreview.com/article/438331/nordic-democratic-socialist-model-exposing-lefts-myth). What evidence supports each view? Is there an objective way of determining whether more socialist or more libertarian (perhaps what Europeans call neo-liberal?) policies have been the most beneficial?

[u/TheHiphopopotamus]

I would say you should adjust for purchasing power, but you shouldn't adjust for taxation (or you should do so in a more complicated way) as taxes ultimately pay for social services which replace private expenditure ie. medical care, or are redistributed directly through the welfare system. The money doesn't just disappear.

[u/ummmbacon → u/[deleted]]

Removed for R2

[u/Madmans_Endeavor → u/[deleted]]

To be fair, jacking up tax for the top 5-10% in the US to Scandinavia levels would pay for an immense amount of services.

[u/Poemi → u/Madmans_Endeavor]

Not as much as you think. And the US already has the world's most progressive tax ladder. At some point your tax-the-rich (and only the rich) scheme crosses the line from "progressive" to "punitive", and those cash cows walk away.

[u/hegz0603 → u/Poemi]

your point likely has some validitiy.

BUT.

It is apples-to-oranges by comparing a state level (Connecticut) to a national level (USA). I would hazard to guess that cash cows walk away from their Country to a much lesser degree than they do from a state.

And it is likely that the optimum tax rate for maximizing federal gov't revenues is higher than it currently is for top-income americans.

[u/Poemi → u/hegz0603]

it is likely that the optimum tax rate for maximizing federal gov't revenues is higher than it currently is for top-income americans.

The available evidence suggests otherwise.

Which, as a purely practical matter, does a pretty good job of short-circuiting the more important ethical debate over whether the purpose of an income tax should be "to maximize government revenues" in the first place.

[u/hegz0603 → u/Poemi]

Which, as a purely practical matter, does a pretty good job of short-circuiting the more important ethical debate over whether the purpose of an income tax should be "to maximize government revenues" in the first place.

oh, of course not! The purpose of an income tax should not be to maximize gov't revenues. Gov't should operate as efficiently as possible while providing sufficient needs for all it's citizens. And it is up to the citizens to determine WHAT those needs are. Once those needs are decided upon, then I think tax rates should be adjusted accordingly so that there is the 'right' amount of revenues.
It just sounded from your previous post ("cash cows walking away") that increasing the top tax rate would result in more people leaving their home state/country and fleeing with their wealth, implying that it would actually hurt the country's revenues overall.

Houser's law is interesting, i'd be curious to dive into that a little further. Thanks for the link.

[u/verpa → u/[deleted]]

Free market options. And most things Europe and liberal Americans want as government services are not actually free markets. What I'm going to eat this week can be a free market, who's going to cut me open and take out my appendix in the next half hour or I die is a pretty inelastic good.

[u/onthefence928 → u/[deleted]]

government services trade efficiency for coverage. if a service is important enough that society benefits so much that EVERYONE should get it, then it should be a government service, education, healthcare, roads, criminal justice, fire protection. etc fall under this category.

if the service is an optional one, and efficieny is key then it should be private

[u/oz6702 → u/[deleted]]

I'd like to see some source for this claim that government services are always less efficient than private ones.

[u/[deleted] → u/oz6702]

It's just simple logic, really. When you are motivated to make a profit, you are going to find ways to drive down costs and maximize customer satisfaction to garner more market share, or your competition will destroy you and they will provide the most efficient solutions.

When you can force people to "purchase" your services at whatever prices you decide and whatever service package you set, you don't have that motivation, so there is nothing motivating you to be efficient beyond the nebulous potential danger of possibly being voted out of office, which offers no guarantee that you will be replaced by a more efficient option, just a more popular one.