Bernie Sanders often cites Denmark as the kind of country he would like America to be under his ideology of “democratic socialism.” Well, here’s a news flash: Bernie Sanders, with his hostile attitudes toward free trade, free markets and multinational corporations, probably couldn’t get elected to a municipal council in Denmark today. Ironically, Joe Biden, with his more balanced views on trade, corporations and unions, probably could. And therein lies a column.
I can explain this best by starting with a few questions that I’d love to ask Sanders about his democratic socialism, beginning with the most basic one: Sen. Sanders, where do you think jobs come from?
They come from risk-takers who borrow money from banks or relatives or max out their credit cards or spend their own savings to start companies they hope will become profitable. If that is what Sanders believes, you’d never know it from listening to him.
To listen to him (and his surrogates) is to listen to someone who seems to believe that the American economic pie just miraculously appeared and exists on its own. He never discusses where that pie came from, how to bake it or how to enlarge it. His only interest is how to redivide it.
Second: Sen. Sanders, is there a single American entrepreneur or corporate leader whom you admire? Or is each and every one of them part of the “corporate greed and corruption” responsible for “destroying the social and economic fabric of our society,” as you put it on your website. When was the last time you even visited a big U.S. multinational and sat down with its employees and executives?
Third, Sen. Sanders, do you believe the free enterprise system is the best means for growing jobs, the economy and opportunity — or do you believe in more socialist central planning? I ask because I have often heard you praise Scandinavian countries, like Denmark, as exemplars of democratic socialism. Have you ever been to Denmark? It’s democratic but not socialist.
Denmark is actually a hypercompetitive, wide-open, market economy devoted to free trade and expanding globalization, since trade — exports and imports — makes up roughly half of Denmark’s GDP.
Indeed, Denmark’s 5.8 million people have produced some of the most globally competitive multinationals in the world, by the names of AP Moller-Maersk, Danske Bank, Novo Nordisk, Carlsberg Group, Vestas, Coloplast, the Lego Group and Novozymes. These are the very giant multinationals Sanders constantly rails against.
As the former Danish Prime Minister Lars Lokke Rasmussen once remarked in a speech at Harvard’s Kennedy School of Government to those who might not fully grasp the Danish model: “I would like to make one thing clear, Denmark is far from a socialist planned economy. Denmark is a market economy. The Nordic model is an expanded welfare state, which provides a high level of security for its citizens, but it is also a successful market economy with much freedom to pursue your dreams and live your life as you wish.”
It is through these engines of capitalism, free trade, economic openness and globalization that Denmark has managed to become wealthy enough to afford the social safety net that Sanders rightly admires — as do I: access for all to child care, medical and parental leave from work, tuition-free college, a living stipend, universal health care and generous pensions.
But there is nothing free about these services. According to Investopedia, Denmark’s progressive income tax tops out at 55.8%, and the average individual pays 45%. The Danes pay an 8% labor market tax, a 5% health care tax, as well as hefty municipal taxes and a social security tax. Denmark also has the highest national sales tax in the European Union — 25% — on most goods and services, a big tax on the middle class.
In short, Sanders cherry-picks Denmark. He stresses what he loves — all that the Danish state provides — and then he ignores two things: one obvious and important and one less obvious and even more important.
The obvious and important one is the relentlessly entrepreneurial capitalism that generates Denmark’s prosperity and that is celebrated there. The less obvious, but more important, feature of Denmark’s success is the high-trust social compact among its business community, labor unions, social entrepreneurs and government. That’s the real secret of Denmark’s sauce.
I know a little something about this because in March 2018 Rasmussen, who was then still the prime minister, invited me to give a talk about globalization to a retreat at Marienborg, his official residence, as part of a meeting of the Danish “Disruption Council.” It brought together all the country’s stakeholders — corporate leaders, national union leaders, educators, social entrepreneurs and Cabinet ministers — to brainstorm about how they should work together to prepare the country for the rest of the century.
It was fascinating for me to watch them respectfully interact. Obviously, in a small, largely homogeneous country of 5.8 million people, it is a lot easier to generate that kind of social trust than in a diverse nation of 327 million. But the point is, no one was demonizing others as “corrupt” by the very fact of who they were — whether labor organizer or corporate titan or someone of wealth.
They understood that it was the balancing of all their interests that made Denmark’s economic growth and generous social safety net possible.
In nature, ecosystems thrive the most when they are “in balance.” Mother Nature achieves that balance in her own ways, some quite brutal. Political systems also thrive when they are in balance. Denmark has found a healthy balance of the interests of capital, labor, social entrepreneurs and government. The thriving and adapting by each reinforces the other.
America is now out of balance. We all sense it in the gross and widening inequality we see around us. Sanders sincerely wants to eliminate that. Alas, so do a lot of us. Michael Bloomberg was running on a platform advocating a 5% surtax on incomes of over $5 million annually.
But when you begin that conversation, as Sanders does, by effectively demonizing all risk-taking American entrepreneurs as corrupt, by vowing to redistribute their income — which Sanders seems to believe is all ill gotten by definition — by pretending that all the benefits can be paid for by the wealthy and nothing from the middle class and by voting against the new version of NAFTA — which was supported by the AFL-CIO and Nancy Pelosi as precisely the kind of trade deal with the very union and environmental protections Democrats have long sought — then your true model country is not Denmark. It’s a socialist fantasy.
The truth is, Joe Biden would make a much better Scandinavian-type leader than Bernie Sanders.
Biden, in my view, would be much more likely to — and able to — build a new social contract in America than a President Sanders, because Biden not only genuinely cares about the working class and the homeless — and understands the need for access to lifelong education and health care — he also knows that you don’t get there by demonizing the engines of capitalism and job creation. You have to find a way to work with them.
Denmark did not become Denmark because of a revolution. It evolved where it is today through a steady iteration — unleashing its entrepreneurs on the world to generate as much wealth as they could while constantly forging a dialogue at home among all the stakeholders about how best to share enough of the profits to have a truly just safety net, while not destroying the free-market, free-trade engines of growth, and while maintaining a high sales tax so everyone contributes something.
If Denmark’s social contract is your model — and it’s a good one — then I’d trust Biden much more than Bernie to head us there.
Thomas L. Friedman
Thomas L. Friedman is a three-time Pulitzer Prize winner and an Op-Ed columnist for The New York Times.
