Left-wing myths: European socialism and Somalia anarchy

The most often example of good social democrat government is western and particularly northern Europe. Where, the story goes, everyone is happy and prosperous all thanks to the benevolent socialist-ish government. This is thrown into the conversation as some sort of unassailable argument against libertarianism, for some reason, usually as a contrast to the United States, which is in the minds of most some sort of paradise of free market capitalism.

I call this “argumentum ad Denmark” (made it up myself). This is obviously a misguided belief, as there is nothing particularly libertarian about the United States, but the notions persists. In fact, if you look beyond taxes, from many points of view northern European economies are freer than the US, as the economy would not work with both high tax and suffocating regulation. They tried that, not very successfully, so they had to pick one. This was a needed compromise as both highly regulated and highly taxed economies do not work at all, while when one factor is lowered the may work for some time.

Not a scale model

First of all it is difficult to directly compare Denmark to the US, irrespective of what you are trying to prove. The larger and more diverse a population is, the harder it is to find one size fits all metrics for health, happiness, prosperity etc. Second of all, as mentioned, neither is the US a free market country, nor are various Western European countries socialist ones.

Base purely on size, culture, history, tradition, the countries are difficult to compare in a way that is somewhat clear and objective, as some will find ways to say one country is better than other and will generate countless blog comments over why it is right or wrong and which are the right metrics to compare. Americans of Scandinavian descent seem to be doing quite OK in the US, for example. A direct comparison is not the point, so I will not attempt one. The point is there is no clear socialist - free market distinction there.

Off course you can draw some broad conclusions based on different models of development. But the broad conclusion I see, for both Denmark and the US, is the freer the economy the better the development.

Nothing says free marked like thousands of pages of regulation

Now skipping the base philosophical libertarian argument which would be that even if the northern system presumably leads to more prosperity, it is really irrelevant if it is built on liberty infringement, let’s address the actual background of the European model.

First of all, there is the assumption that Europe is prosperous because of the social model, which is not based in reality and more of a cargo-cult mentality. Fact is that Europe was quite rich compared to the rest of the world before it adopted the welfare state, as it could not have financed it otherwise. Indeed, this is the story of just about every North American and Western European nation. The burden of government spending didn’t explode until after the 1940s.

In some of the academic literature there is something known as Wagner’s Law, which revolves around the tendency for rich nations to have big governments. Some people naively conclude that this means big governments lead to more prosperity. But this puts the cart before the horse.

“Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.” – Bastiat

Some point to the higher taxes in Western Europe as a cause of prosperity, when it is in fact the other way around. A higher income can support a higher percent as tax, because enough left over, so people don’t chafe as much under taxation. A country where the per capita income is 30000 that takes 40% in taxes leaves 18000 per person, a country with 5000 income at the same tax rate leaves 3000, much harder to support the tax.

To address what I call “argumentum ad Somalia” because, though it is a ridiculous argument, it is spread by left-wing trolls more and more lately. They give Somalia as an example of a failed anarchy. If you like libertarianism go to Somalia! This is just as silly as saying if you like socialism go to North Korea.

First of all Somalia is not really anarchic right now, maybe just some parts of it. Somalia is a failed African Socialist state which collapsed in chaos and civil war.

But, just for the sake of argument, looking at the parts of Somalia that are at this point anarchy, it is barely starting to rebuild on the ruins of the previous status quo, so it is irrelevant to compare it to other countries. Give it time and it might prove that it is better off stateless. Some signs point into that direction – living standards are not lower now in Somalia then they were in say 1990. Time will maybe tell. Or maybe not.