When I went to Moscow as a citizen diplomat a few years before the end of that Cold War, many Soviets spoke longingly about the social democracy of the Nordic countries: couldn’t the Soviets somehow nudge their society in that direction? Recently I had an opportunity to discuss the Swedish system with a visitor from the Stockholm area. Here is what we said:
Visitor: I don't intend to criticize your President, but it’s’ fair to say that he and his supporters are almost as far from the Nordic way as the Soviets were, but in the other direction.
Me: How would you describe your system of the Olof Palme era?
Visitor: Let’s go back to fundamentals. About the time of your revolutionary war, Adam Smith had the plausible-sounding idea that a market would convert individual striving into social good through a magic organ called the “invisible hand” Everybody would try to make a profit, and the result would be a paradise.
Me: So what’s wrong with that idea? Recently it’s been reinforced here by what is popularly called the Chicago school (including economists such as Milton Friedman).
Visitor: Corporations may foster a dynamic economy, but they believe quite mistakenly, or at least pretend, that the invisible hand actually works. They try to disguise or distract attention from costs imposed on the public (“externalities”), they call for cutting taxes on the rich, which they argue falsely will surely lead to economic growth, they see regulations as a drag not as a level playing-field that protects the public, and in general they attack government while trying to influence it. Your system is unstable, with one party agreeing with corporate propaganda, while the other says it wants to give at least a little help to people hurt or left behind by the dynamic of the economic machine.
Visitor: Yes, because the corporate system wants to destroy whatever it can’t capture or control.
Me: It’s true that people like White House “chief strategist” Steve Bannon want to dismantle the “administrative state.” (Or one could focus on the “regulatory state.”)
Visitor: The trouble is, you have no general and vigorous public understanding of the virtues of a mixed system, a system that is always in tension. Your “founding fathers” understood this with regard to government: each part was given the task of checking and balancing the others. The framers were not deluded that the President was reliably and safely constrained by any “invisible hand.” For example, they provided for Congressional oversight.
Me: And after an early case called “Marbury v Madison,” the Supreme Court began to declare certain things “unconstitutional.”
Visitor: So the government had checks and balances; but your economic system as a whole had none. This is a formula for a tiny elite class to control things, in part by using a portion of its cash flow to buy the government by legally making “campaign contributions,” and by maintaining squads of lobbyists, above all by posing as the font of prosperity.
Me: Unfortunate, perhaps, but normal.
Visitor: My point exactly, it’s normal in your country, it’s unremarkable. I’m told that your Supreme Court has been ideologically subverted to the point of treating corporations as if they were persons. Any propaganda they want to spread is “free speech.”
Me: Well, your system is not perfect either.
Visitor: Far from perfect. But we don’t confuse social democracy with “communism,” a mistake the Soviet communist reformers never made: around the end of the Cold War they knew how different Stockholm was from Moscow.
Me: People talk about “social democracy”, as Bernie Sanders did, and does, but what is it?.
Visitor: It’s a hybrid system. In Sweden, and in the other Nordic countries, this system has given us universal medical care, widespread access to higher education, livable pensions, a vigorous media sector, public involvement not only in elections but also in policy, and also prosperity, including strong exports.
Me: In your view, why does the U.S. lack some of these qualities?
Visitor: You focus on “opportunity,” which looks fairly equal when seen by the upper-middle-class. We focus on actual results. We want a society that works for everyone, not only for those who manage to “succeed.” We have economic inequality, but mostly within a much narrower band than in the U.S.
Me: Opponents of social democracy here say that we can't copy small countries like Sweden. You have how many people?
Visitor: Roughly 10 million. Not too small to have produced Secretary-General of the U.N. Dag Hammarskjöld….
Me: Or the director Ingmar Bergman.
Me: Yes, but the U.S. has a population of 325 million.
Visitor: So what? You instituted national programs such as the income tax, Social Security, and Medicare. These initiatives were not defeated by any problem of scale.
Me: You make it sound easy.
Visitor: Not easy, but possible. You have been befuddled by false arguments: that the U.S. is too big and unwieldy to act, that universal health care and widespread access to higher education are somehow “communistic,” that the economic system is in all respects self-correcting, that you can’t afford truly equal treatment of all sectors of U.S. society, that…
Me: It’s true that we have a vigorous public relations industry, nearly all of which is paid by corporate interests to make any arguments that can gain traction, regardless of truth.
Visitor: In Sweden we were pushed into a fair system in part by labor unions. . But change is a matter more of seeing through a limited ideology (of, for example, the invisible hand). than of favoring any interest group. We worked toward a somewhat stable consensus based on a hybrid system.
Me: Also, Sweden is socially much more homogenous than the U.S.
Visitor: Yes, even with our influx of guest workers. But this is another false argument, that the U.S. includes various different groups. Either you are a community that includes every citizen, or you are not. If not, why have you been claiming to be “a beacon to the world”?
Me: It was a Swede, Gunnar Myrdal, who pointed out that to the extent that we live up to our ideals, we become exceptional.
Visitor: Well, in his book, An American Dilemma: The Negro Problem and Modern Democracy, Myrdal framed the argument in a positive spirit. Since he published in 1944, your society has made great progress, but having forced a people to slave for you, are you willing to welcome all of their descendants (along with recent immigrants) into a community with you?
Me: If they are willing to work…
Visitor: And what about when jobs are not available? (Even when unemployment falls to 4%, economists speak of full employment.)
Me: In the U.S. of the invisible hand, lack of “success” is taken as evidence that you’re not trying, whether in education or the job market. It’s how we seek to motivate everyone.
Visitor: So your ideology would blame the victims of an economic system, and it promotes fantastic rewards for people who “succeed” within its arbitrary terms.
Me: Well, would you have us limit the rewards?
Visitor: I admire your economic dynamism, but couldn’t entrepreneurs be motivated less by enormous wealth (and the ability to pass it along to heirs who don’t have to work) than by ease of entry, by praise for their ideas, by laws that allow a successful enterprise to be born?
Me: It’s a different way of thinking. Let me summarize my understanding of your points: The Swedish system is a hybrid of profit-seeking and government regulation, without unsupported faith in an “invisible hand.” The community includes all citizens, not only whomever “succeeds.” Entrepreneurs could by motivated not by fantastic monetary rewards, but by the opportunity to manifest their vision.
Visitor: Yes, and the U.S. has shown it can adopt programs such as Social Security, even if they are copied from smaller countries.
Me: Do you think we could manage to adopt the hybrid system that you describe?
Visitor: Hey, it’s your country. The Swedish system of the Olof Palme era worked, and it’s free for the taking..