What France, Germany and Sweden can teach the US about socialism
What is socialism?
As more candidates for office claim the socialist banner, it seems natural to seek a common definition of socialism, so we know what we are talking about. Though this is a rational goal, doing so is difficult for two reasons.
First, there may be as many versions of socialism as there are different churches, which claim to be Christian. In both cases, advocates of the various models have been fighting among themselves for centuries with no resolution.
Second, the adjective socialist seems to evoke even more emotional responses than the term racist. Consequently, debates therein are more often driven by fear and anger, which results in division and misunderstanding.
Rather than joining that partisan scrum, I intend to focus on actual results achieved by countries, which employ policies advocated by political representatives who call themselves socialist in countries which have long democratic traditions and capitalist ownership of business: France, Germany and Sweden.
More doctors and more vacation days across the Atlantic Ocean
Healthcare. All three European countries have taken the profit motive out of their system with interesting results.
Our longevity averages 79.76 years, while these Europeans average 84 years. 41.8% of Americans are obese, while France, Germany and Sweden report 12.5%, 24.5% and 18.7%, respectively.
Infant deaths per 1,000 births, another indicator of health; we average 5.1 and the European countries 2.8.
Access to services is another indicator.
We Americans have 26.6 doctors per 10,000 people, while the European countries average 43.6. To get their results, however, they spend much less per person on health services. We spend $13,473 per person annually, while France, Germany and Sweden spend $6,868, $8,825 and $7,770, respectively.
Worker Rights. The legal systems in the European countries provide formal roles for them within corporations. In Sweden, companies must have safety committees in which labor and management have equal representation. Swedish workers also must approve a proposal to move a company’s operations.
Workers in German firms with over 2,000 employees have equal votes with shareholders on their corporate boards.
Social Standards: Our three sample group countries are more aggressive in mandating benefits for workers. While our country has no minimum days of paid annual leave, France requires 42 days, Sweden 34 days and Germany 30 days. This reduces the hours worked per year.
While Americans work 1,800 hours, Germans 1,332, French 1,498 and Swedes 1,512 hours. Our American retirement age of 66.8 years is higher than the sample; 62.8 for France, 63 for Sweden and 66 for Germany.
Education: Our three European countries’ investment in education reduces the fees paid by families. While American families pay more than $1,250 a month for preschool childcare, French, German and Swedish families pay between $67 and $168 per month. At the university level, Americans pay about $9,600 annually for attendance at public universities. In Sweden, there are no fees and France and Germany average just under $200 per student.
USA inequality index on par with Haiti’s score
Economic Prosperity: The four countries are similar in overall economic well-being. The three European countries have a gross average wage of $73,132, while the American result is $70,627 (Germany is above the U.S., while the other two countries are slightly lower).
The Legatum Prosperity Index (with ties to conservative policies in the United Kingdom) ranks all countries by overall prosperity. It ranked Sweden No. 7, Germany No. 8, the U.S. No. 17 and France No. 21.
Their level of income inequality, however, varies dramatically. Economists use a statistic called the Gini coefficient to measure the degree of income inequality. The lower the number, the lower the inequality.
A Gini coefficient of 1 would indicate perfect equality: everyone receives the exact same income. The range for all countries in a recent study was from a high of 63 to a low of 23.8. The GINI for the U.S. was 41.8, for France 31.8, Germany 32.4 and Sweden 29.3.
Which countries have similar Gini coefficients to ours? Haiti (41.1), Djibouti (41.6), Bolivia (42.1), and Papua New Guinea (41.9).
To achieve these social goals, France, Germany and Sweden have on average:
- Higher tax rates on personal income: top rate 49% vs. 37% for the U.S.
- Higher corporate tax rates: 25.3% vs. 21% for the U.S.
- Higher capital gains tax rates: 28.8% vs. 20% for the U.S.
- Higher sales taxes: 21.3% vs. various state rates. For example, Georgia’s is 4%. The U.S. has no national sales tax.
They also spend a smaller portion of their Gross Domestic Product for military (2.26% vs. 3.1% in the U.S.).
We would benefit from debating the value of various social goals and their costs rather than being misled by a battle of labels.
Kenneth Zapp, Ph.D., is a retired business professor in Savannah.
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