Update, August 29, 2018: After this article’s publication, the authors of data on which some of its argument is based told another publication the data was actually faulty. The author of this article has accordingly updated his argument in a new article.
I woke up early one recent morning, scanned the news, and stumbled upon a tweetpraising an “informative and fun podcast episode” that promised to set the record straight on Scandinavian socialism. Having read a decent amount about the Nordic model, I was curious to see what kind of wisdom Matt and Elizabeth “Liz” Bruenig, of the People’s Policy Project and Washington Post, respectively, had in store.
After a light-hearted intro, Liz began with “Norway is not socialist?” alluding to a recent Forbes article that contradicted claims that Scandinavia is a socialist paradise. This prompted a 30-minute rebuttal from Matt of people he described as “takesters” and a case for why the Nordic countries, particularly Norway, are indeed socialist, sprinkled with occasional “booms,” uh-huhs,” and “yeahs” from Liz whenever she thought he had made a good point. For those who have not heard the show, think: a wonky version of Diamond and Silk for Bernie bros.
- The Norwegian government owns nearly 60 percent of the country’s wealth (defined as net public wealth as a percentage of net national wealth).
- Norway has dozens of state-owned enterprises (SOEs) that control most of the country’s energy and national resources.
- The country has a sovereign wealth fund valued at more than $1 trillion.
I agree these three points could serve as perfectly valid indicators in determining Norwegian socialism, but do they really prove that Norway is the most socialist country on earth? Much to my wife’s displeasure, I shared my disagreement with Matt and Liz, which turned into an all-day Twitter feud. Unfortunately, the Bruenigs have since deleted the exchange.
‘Dan the Man’ Illustrates Confirmation Bias
“Dude, but he’s never won a Super Bowl and Joe Montana has clinched like four of them!” Of course, I had all sorts of rebuttals to this gaping hole in my theory, because I really wanted to believe that “Dan the Man” was numero uno. The other kids had a point, though. Intuitively, one should expect the GOAT QB to have at least one ring, right?
Similarly, I think the Bruenigs really want to believe that Norway is the most socialist country in the world and that Scandinavia is really socialist, despite obvious problems with the claim. I don’t doubt the sincerity of their beliefs. They’re among the most visible proponents of “democratic socialism” in the country. So there is a direct relationship between the credibility of their advocacy and the degree to which Norway is socialist.
Since few people would deny that Mexico is a mixed, market-based economy, this should raise red flags about the WIR statistic’s reliability as a lead indicator of a country’s level of socialism.
If Scandinavia Is Socialist, So Were Mexico and Reagan
The data point originates from research led by economist Thomas Picketty in the World Inequality Report (WIR). To calculate what percent of a country’s national wealth is state-owned, Picketty divided net public wealth (public assets minus public debts) by market value national wealth (net private wealth plus net public wealth). Like my Marino GOAT theory, however, there are glaring issues with this argument.
The most obvious issue is that under this measure of socialism, Norway is not the most socialist country in the world, Mexico is. A look at WIR’s country-level data shows that 60 percent of Mexico’s national wealth was state-owned in 2009 (the most recent year available) compared to just half of Norway’s (50.5 percent) that same year. The same WIR data shows the Korean government owns 21,205 percent of the country’s wealth, which would make it 359 times more socialist than Norway, but I digress. (I reached out to two of the economists who worked on this report to clarify this, but they have not responded as of the writing of this article.)