One continent eroded by socialism is fairly enough

Judging from social media (which is of course by all means thoroughly representative), many of us young Europeans have the tendency to show support for Bernie Sanders for the 2016 presidential bid in the United States elections. Sanders is a self-declared socialist trying to run for the Democratic Party, favours increasing the minimum wage and big government spending. My question is simple: shouldn’t we as Europeans be the first ones to reject the methods of socialism?

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Sanders on taxation

It comes to nobody’s surprise that Senator Bernie Sanders would substantially raise taxes, as he told CNN last month. He’s committed to close down tax loopholes and to increase redistribution of wealth through high taxation on rich people and big corporations. He wants to take on Wall Street giants. Now, where have we heard that before? That’s right, Sanders sounds an awful lot like François Hollande, the French president, who failed miserably with his 75% tax on salaries over one million euros, and whose struggling economy is a drain for the entire continent. You know, the guy who still can’t get his country to respect the convergence criteria of the Maastricht Treaty and broke the landmark of 100% of debt of GDP. In 2013, his campaign against rich people and big businesses had already triggered a capital flight of 53 billion euros.[1]

So would a tax increase on high wages be effective to balance the federal US budget? No.

When referencing that he wants government spending on the same level as Scandinavian countries, he definitely leaves out that this would increase taxes not only for rich people and big businesses, but ultimately for every taxpayer in the US. US government spending is at 35%. Compare that to Norway, 44%, or Denmark, 57.7%. And there are a few things to say about Scandinavia for that matter.

The reference to Scandinavia

There is this common misconception that the United States practice full line capitalism and that Northern Europe got it figured out on a workable full line socialist model. Nothing could be further from the truth. Of course we won’t be able to track down the entire economic history of the mentioned countries,  but Sweden definitely is a good example. On the Heritage Foundation Index of Economic Freedom we can compare both countries:

  • Sweden has topped the US on business freedom ever since the recession began
  • Sweden is more free on monetary issues
  • Sweden has higher freedom from corruption
  • Furthermore, Sweden has higher investment, property and financial freedom

The regular Sanders supporter would now point out that this only supports their case that Scandinavian countries figured out a ‘good mix between free market and socialist policies’ and to the financeability of the enormous welfare state. But in fact, as the Swedish author and historian Johan Norberg demonstrates in an article on How Laissez-Faire Made Sweden Rich, the country is only profiting of the years in which strong free market policies were implemented.

In 1950, when Sweden was known worldwide as the great success story, taxes in Sweden were lower and the public sector smaller than in the rest of Europe and the United States. It was not until then that Swedish politicians started levying taxes and disbursing handouts on a large scale, that is, redistributing the wealth that businesses and workers had already created. Sweden’s biggest social and economic successes took place when Sweden had a laissez-faire economy, and widely distributed wealth preceded the welfare state.

For a shorter period of time Sweden managed to cut down on the intrusiveness of government in the 1980s, in order to participate in the ongoing economic growth. The government liberated state-held sectors, taxes were cut, regulations diminished, and as a result the economy was growing again. Those who had fled the country from exorbitant taxation in the 1970s could return home and through international cooperation Sweden has become one of the many economically interdependent nations.

You can always just spend as much as you have. But that is not Sander’s philosophy. In fact the Senator, when commenting on the Greek referendum  said:

“In my view, we ought to break up the major financial institutions. We have to do away with these corporate tax havens. And, yes, we have to raise individual tax rates substantially higher than they are today.”

The exact remedies used in Sweden to make the socialists capable of spending so much money on a welfare state that will not be supportable on the long run should not be applied in Greece, according to the presidential candidate. Isn’t it kind of odd that we Europeans wouldn’t look sceptical at exactly those who promise high spending, yet will do no effort to explain the funding for their programs or their effect on the economy.

Sanders on immigration 

Now here’s a topic which innerly upsets most of his supporters, but which is inherent to his philosophy. Europe and the US share a common challenge in terms of immigration: an economically developed area with many inhabitants in fear over immigrants ‘coming to steal their jobs’.

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Now of course that’s absolutely false since immigration for the most part is complementary to the work force in place. If the European left realises that and therefore argues for more open immigration policies doesn’t seem likely, since their arguments sound rather humanistic. Bernie Sanders on the other hand is tough on immigration, as he, just as our European conservative right, thinks it’ll depress wages in the US. In the Newsweek on July 30th, this exchange with journalist Ezra Klein could be read:

Sanders:
Open borders? No, that’s a Koch brothers proposal.

Klein:
Really?

Sanders:
Of course. That’s a right-wing proposal, which says essentially there is no United States. …

Klein:
But it would make …

Sanders:
Excuse me …

Klein:
It would make a lot of global poor richer, wouldn’t it?

Sanders:
It would make everybody in America poorer—you’re doing away with the concept of a nation state.…

Changing Sanders name in that exchange to Marine Le Pen would be perfectly normal when read in Europe: it’s the classical right-wing, economically illiterate position. [2] The tragedies occurring at the border between the US and Mexico can be just a dramatic as the ones in the Mediterranean Sea. To then stigmatise people who want to increase their living standards in order to excite the local electorate, that tells a lot. Ultimately, Bernie Sanders is a self-declared socialist, with the position that his nationals should have priority or the outright monopoly to work, making him a nationalist at the same time. The conclusion can be lead on from there.

So by all means, we Europeans should know better than to support Bernie Sanders. Some of us had enough of queuing for bananas, the rest doesn’t want to find out what it’s like.


[1] Source

[2] For more on misconceptions about immigration.

Pictures are Creative Commons.

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