Scandinavian socialism, or to be precise Nordic capitalism, has been embraced by many utopian left-wing thinkers as the ideal interpretation of a political economy. Cosmic government spending on the welfare state along with legalized theft in the form of astronomical taxation is what those without basic knowledge of economics have been praising for years. Interestingly enough, even the pure examples of socialist success are actually capitalist in disguise.

To begin our journey what ought to be pointed out is that socialism of the North has little to do with hypothetical political socialism and even less to do with actual economic socialism. Scandinavian countries are political democracies, with countries like Norway being constitutional monarchies, that do not integrate their system of government into a socialist economic system. Private ownership of the means of production and the existence of free markets that are regulated by market forces instead of artificial government intervention – all which a socialist economy does not possess have been acquired by the Nordic countries. To shine the brightest possible light on this situation it has to be blatantly stated that product market regulations are pretty much nonexistent in Scandinavian countries thus ranking product market freedom as one of the highest in the world.

So what is the hype all about? My guess would be; free universal healthcare, free education and overall a strong welfare state. But how in the world could there exist such notable welfare privileges in such demographically small, ethnically homogenous, culturally hard working countries? It may be due to ludicrous tax rates – ranging from 55-65 per cent flat income tax, 25 per cent Value Added Tax, along with a luxury tax and corporate tax rates of up to 79 per cent. Additionally, with countries like Norway having their annual government budget inflated by their richness in natural resources it is unquestionable how the expenditure on the welfare state can reach such highs.

In short heavy taxation, in the form of progressive tax systems such as that of Sweden, is what allows Scandinavian countries to pursue such bold polices in their capitalist markets. Obviously the consequences of such are quite vivid. Scandinavian rates of household debt are extremely high – for example an average Dane has a household debt equal to over 300 per cent of his/her disposable income whilst in America, perspective wise, the same debt is equal to around 110 per cent. Coincidently I had to mention this as of the many many sizable problems that is conveniently ignored by modern household socialist thinkers at all cost and with all their debt.