When Evaluating Socialist Programs, The Path Taken Matters

My last column began a conversation our nation desperately needs to have – forcefully pushing back against the dangerous and misguided myths promoting by proponents of socialism in the U.S. surrounding the supposed socialist success stories in countries like Switzerland, Norway, Sweden, and Denmark.

We don’t criticize the policies of these nations to defend our own. It is important to learn from the ideas and experiences of other nations and peoples in charting America’s future economic policies. After all, our nation’s success has been due, in some measure, to the wisdom of our founders in borrowing the greatest ideas on liberty and self-government from around the world.

As discussed previously, the supposed socialist success stories are not, in fact, exemplars for the benefits of expanding the welfare state. Rather, they represent a handful of tiny nations, all with unique historical and contextual factors that are enjoying recent economic success reflecting their embrace of free trade and entrepreneurship, along with a heavy dose of unique, non-replicable factors that contribute to their success (e.g. Norway’s Oil Fund and Switzerland’s international banking sector.) Even if we were to accept the premise that these nations have been successful because of their welfare states, one must consider not only the current basket of policies on the books, but also the path undertaken to adopt them.

Put in simple terms, the end state isn’t everything. How you got where you are matters, too. Consider an example from the game of football. Is a team entering the playoffs with a 9-7 record more likely to do well or to get knocked out early? The fact is, this information alone isn’t enough to make that determination. While the record itself may be fairly unimpressive, if the team started the year in adversity, fought through it, and is entering the playoffs on a six game win streak, that’s a dangerous team!

The same principle applies to public policy. You will hear socialists point out how other nations spend substantially less per capita on their health care systems than the U.S. But this obscures the fact that these socialized systems were designed after World War II with the government always in charge and have developed health care systems very differently from our own, employer-based private insurer system.

Doctors in socialist nations typically earn far less than their American counterparts, while typically holding little to no debt from attending medical school. Do American socialists expect our doctors and nurses to accept compensation on par with their lower-paid European counterparts? And do they expect American consumers to accept state bureaucrats telling them that the hundreds of billions of dollars spent on elective procedures will no longer be covered? If not, then transitioning to a universal health care system will not contribute anything like the savings proposed, rendering spending comparisons specious at best. Simply changing our health care policies to mirror those of socialist countries will not necessarily lead to similar outcomes. The same holds true for a range of other economic and social priorities.

Simply pointing to a handful of moderately successful socialist nations does not in any way justify proposals for a government takeover of health care and elimination of  private insurance (Medicare for All), the destruction of the American energy industry within the decade (Green New Deal), or a trillion-dollar proposal promising every person employment with the federal government (Federal Jobs Guarantee). These are dangerous lies, and they must be stopped.

Damon Dunn is a fellow in business and economics at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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