Scandinavian Unexceptionalism: Culture, Markets, and the Failure of Third-Way Socialism.

• Author: Edwards, James Rolph

Scandinavian Unexceptionalism: Culture, Markets, and the Failure of Third-Way Socialism

Nima Sanandaji

London: Institute for Economic Affairs, 2015, 132 pp.

Despite the current popularity of Bernie Sanders, as of the late 20th and early 21st centuries, leftist ideology is increasingly in tatters. A hundred, or even eighty, years ago it was difficult to refute idealistic claims by socialist partisans of what could be achieved by organizing social institutions on the lines of democratic or even undemocratic socialism. There was just too little history of such experiments in action to judge them by. Purely theoretical refutations of socialism, such as those by Mises and Hayek, that market pricing was necessary for calculation of costs and the efficient use and allocation of resources, even though they turned out to be right, could be easily ignored or disputed at the time by academic socialists.

Driven by the strength of the socialist ideal, such experiments came to pass, however, and, over time, historical evidence on their performance accumulated. The record is not good. Russia managed to assimilate the old Czarist Empire and then Eastern Europe into the USSR. It even managed to industrialize, though mostly through copied technology and stolen (nationalized) capital of Western firms promised monopolies if they invested there. However, the murderous brutality and tyranny of the system could not forever be hidden. Where peoples of the same race and culture were divided into bordering communist and free nations, as with East and West Germany and North and South Korea, the contrast became starker over time. Barriers had to be built to keep the citizens of the communist nations in, and the flow of population, when it occurred, was in one direction only.

The inefficiency of socialist organization and central planning could not be hidden forever either, though an amazing number of Western economists, including Paul Samuelson, were fooled right to the end. The USSR collapsed of its own weight in 1989-90. Likewise in Mao's Communist China, the inefficiency of production and massive starvation as communal agriculture was instituted and private farming prohibited (45 million dead over 1959-61) could not be hidden. Worse, for their leftist sympathizers in the West, subsequent Chinese leaders, with the examples of free and prosperous Taiwan, Singapore, and Hong Kong on their borders to learn from, began reforming their economy to allow private property and capitalist enterprise with market pricing. To the embarrassment of socialists everywhere, China quickly began feeding itself and growing economically at rapid rates. This saved that nation from the inglorious collapse that the Soviet empire experienced.

Other evidence chipped away at leftist ideology in the postwar period. For one, the postwar recovery of Europe was characterized by large-scale, self-conscious liberalization of the political systems and economies of Germany, Italy, and other nations. What followed...