Social Democracy for Centrists


Joseph M. Schwartz in Dissent:

The Economist, long identified with libertarian economic ideals, lauded the “Nordic model” in a cover story last month as a “centrist” economic path for global capitalism. Long hostile to “tax-and-spend” social democracy, the publication’s change in tack arises from its recognition that austerity policies are deepening the economic crisis and that the inequality and declining social mobility of “free-market,” Anglo-American capitalism threatens the very legitimacy of the capitalist system that the Economist holds dear.

The magazine praises Denmark, Sweden, Finland, and Norway for accomplishments often touted by social democrats—low poverty rates, egalitarian distribution, and efficient public services. But the magazine argues that these are now “centrist” societies because they balance their budgets, allow for consumer “choice” within their public services, and nurture risk-taking entrepreneurs. The Economist sheepishly admits that these countries funnel over 50 percent of their GDP through the public sector (versus a meager 30 percent in the United States and 36 percent in Great Britain). But Adrian Woolridge’s “special report” places inordinate emphasis on how the Nordic nations’ have trimmed their (still) generous paid leave, sick day, and disability benefits, while touting Sweden’s switch from a defined-benefit to defined-contribution public pension plan.

The Economist never once mentions that the Nordic economic model of growth-with-equity derives from the continued existence of a powerful labor movement (union density is above 70 percent in each country, versus 11.3 percent in the United States and 17 percent in Great Britain). Nor does it tell us that the historical dominance of social democracy means that Nordic conservative parties resemble Obama-style Democrats. Even as social democratic parties move in and out of government, the “Nordic model” draws heavily upon the egalitarian values of its labor movement and social democratic parties.