The Nordic Myth: A Criticism of the Loki that is “Democratic Socialism”

The Nordic Myth:
A Criticism of the Loki that is “Democratic Socialism”

By Erich Greiner

The debate surrounding “Democratic Socialism” has entered again into the headlines in light of the recent entry of United States Senator Bernie Sanders into the race for the Democratic Party nomination for the President of the United States[1] and the historic election of Congresswoman Alexandria Ocasio-Cortez, a “self-declared Democratic socialist” to the House of Representatives during the 2018 midterms.[2] Embodying the left-wing populism[3] that has surged in response to the rise of right-wing populism under President Donald Trump[4],  both Senator Sanders and Congresswoman Ocasio-Cortez have campaigned on Medicare for All, tuition free public college, a fifteen dollar an hour minimum wage, and advocated for the “Green New Deal” to combat climate change. [5],[6] Both have also pointed to Scandinavian social democracy—the welfare states of Norway, Sweden, and Denmark[7]—as model for the United States to follow.[8],[9]  Advocates of the model cite that Scandinavians, and more specifically Danes, “are more likely to have jobs than Americans,. . . in many cases. . .earn substantially more, . . . take more vacations. . .,” and that “income inequality is much lower, and life expectancy is higher.”[10] However, this analysis belies certain truths.

First is the false premise that Scandinavian “third-way” model is, in fact, socialist. It would be more accurate to say that the economies of Norway, Denmark, and Sweden are social-democratic than democratic-socialist. [11] Danish Prime Minister Lars LØkke Ramussen himself disavowed the label at a speech at Harvard’s Kennedy School of Government, stating, “The Nordic model is an expanded welfare state which provides a high level of security to its citizens, but it is also a successful market economy. . .” [12] In fact, none of the Nordic states could be considered traditionally socialist under the definition of socialism: “any of various economic political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods”—unlike a country such as Venezuela where the government “nationalized” the oil industry.[13],[14]

Furthermore, the goods associated with the social-democratic system cited in support of the Nordic model are largely misconstrued as products of the system, instead of existing before the creation of the expansive welfare state, or, in some cases, actively being hobbled by the enactment of the social-democratic system. Due in large part to the necessity of innovation demanded by the harsh climate and limited natural resources of the region, the peoples of the Nordic countries adopted liberal economic policies, relying on optimizing “ ‘maximum profitable agricultural activity’ and taking greater advantage of international trade.”[15] The adoption of these policies, the enforcement of property rights that enabled the transfer of land from landlords to farmers, the creation of small, localized banks that would extend credit to entrepreneurs with little or no collateral, and competition between firms of all sizes enabled Denmark’s economy to outpace better-resourced countries such as Ireland in the late nineteenth century.[16] During this time Denmark had a larger population than Ireland, higher levels of agricultural output, a greater level of trade, a lower national debt, a higher level of income, and a demonstrably higher standard of living than Ireland and Western Europe.[17] Moreover, over the span of a century, some of the Nordic state’s most famous brands, on which the welfare state greatly relies as a source of tax revenue were developed: Ikea, H&M, Volvo, Alfa Laval and Tetra Pak, all of whom have come to symbolize the brilliance of the Scandanavian free-market approach.[18] In fact, the brands’ home country of Sweden experienced the highest growth rate in per capita GDP in the world from 1870-1936.[19]

However, Sweden’s growth, like that of her sister Nordic countries, has been handicapped by the creation of the social-democratic welfare state in the early 1930s. Over nearly another century, from 1936-2008, Sweden’s growth rate fell to 13th out of 28 industrialized nations, while Denmark’s economy, which had experienced the 6th largest growth rate in the world prior to the adoption of similar social democratic policies in 1924, fell to the 16th largest growth rate from 1924-2008.[20] This stagnation is the natural outcome of a market reaction to the policies of radical social democrats that were adopted in the 1950s and 1960s in an attempt to seek a social-planned “third-way” economy, somewhere between communism and capitalism.[21] Attempting to support what Swedish Prime Minister, GÖran Perrson, deemed the “bumblebee” of massive entitlement and welfare programs on the wings of the Nordic economies’ capitalist underpinnings, Sweden and other Nordic countries have clipped those same wings by creating oppressive tax regimes.[22] With an effective marginal tax rate on Swedish businesses that at times exceeded 100 percent of profits, a private business owner could pay a marginal effective tax rate of 137% on capital gained through the issuing of new shares, costing himself money.[23] Additionally, when long-established companies such as Nokia are relied upon for nearly a quarter of Finnish growth from 1998 to 2007 despite being established over a century before, it is little wonder that innovation has been hobbled and entrepreneurship disincentivized.[24]

The adoption of the social-democratic model has also created deleterious effects that extend far beyond mere economic output. While the application of free-market principles, innovation and trade led the Nordic states to lead the industrialized world in terms of GDP and standard of living, it was the underlying social fabric and political stability that enabled the states to create such high levels of wealth. “High[] levels of trust and social capital” enabled the Danish to establish cooperative creameries that were founded by dairy farmers, whereas in the better-resourced but highly partisan Ireland, no such organizations could be founded.[25] The extraordinary level of trust is also why the aforementioned community banks could make low or no-collateral loans to entrepreneurs that provided the capital necessary to engage in business.[26] However, the adoption of social-democratic policies has also torn at the social fabric and increased mistrust. For example, though the supporters of social-democracy point to the high levels of health of citizens of Nordic states, it is interesting to note that “only the Netherlands spends more on incapacity-related unemployment than the Scandinavian countries” and that “forty-four percent believed that it was acceptable to claim sickness benefits if they were dissatisfied with their working environment.”[27] Additionally, in recent years, absence of men at work claiming sickness increased by forty-one percent during the 2002 World Cup.[28]

Even more problematic is that while distrust among the domestic population of the Nordic countries grows, immigrants face an even greater struggle. In response to the ongoing Migrant Crisis, the Nordic countries have increased restrictions and tightened access to benefits, including those that provided to health services, financial benefits, and stipends for food.[29] Further, due to the strained labor markets, even those who are highly skilled migrants face an unemployment rate 8 percentage points higher than that of native-born citizens, such as that of Finland and Sweden.[30]

In Norse mythology, Loki is the “trickster god. . . [who] often runs afoul of societal expectations”.[31] In Icelandic, loki as a common noun translates to “knot” or “tangle”.[32] Though we may look to the Scandinavian countries as a model for economic success and egalitarianism, we should not be tricked into misattributing their success to, nor become illusioned about, the entanglements and snares of the social-democratic system.

[1] Bernie Sanders Announces Presidential Run, Calls Trump an ‘Embarrassment’, Bloomberg (Feb.  19, 2019), https://www.bloomberg.com/news/articles/2019-02-19/bernie-sanders-announces-candidacy-in-2020-presidential-race.

[2] Meet Alexandria Ocasio-Cortez, the millennial socialist political novice who’s now the youngest woman ever elected to Congress, Business Insider (Jan. 8, 2019),  https://www.businessinsider.com/all-about-alexandria-ocasio-cortez-who-beat-crowley-in-ny-dem-primary-2018-6

[3] Bernie Sanders is Back, The New Yorker. (Feb. 19, 2019), https://www.newyorker.com/news/current/bernie-sanders-is-back

[4] Populism and Nationalism in the Trump Era, Cato Institute (Jan. 25, 2017), https://www.cato.org/events/populism-nationalism-trump-era

[5] Bernie Sanders is running for president—and his policies would have a huge impact on business, CNBC (Feb. 19, 2019), https://www.cnbc.com/2019/02/19/bernie-sanders-is-running-for-president-in-2020–here-is-his-platform.html

[6] This is the platform that launched Alexandria Ocasio-Cortez, a 29-year-old democratic socialist, to become the youngest woman ever elected to Congress, Business Insider (Jan. 4, 2019), https://www.businessinsider.com/alexandria-ocasio-cortez-platform-on-the-issues-2018-6

[7] Scandinavia, Encyclopedia Britannica (Jan. 10, 2019), https://www.britannica.com/place/Scandinavia

[8] “I think he’s scared: Alexandria Ocasio-Cortez celebrates Trump’s criticism of socialism in the State of the Union, Business Insider (Feb. 26, 2019), https://www.businessinsider.com/alexandria-ocasio-cortez-celebrates-trumps-slam-of-socialism-2019-2

[9] Bernie Sanders’ American Dream is in Denmark, CNN (Feb. 17, 2016), https://www.cnn.com/2016/02/17/politics/bernie-sanders-2016-denmark-democratic-socialism/index.html

[10] Something Not Rotten in Denmark, The New York Times (Aug. 16, 2018), https://www.nytimes.com/2018/08/16/opinion/denmark-socialism-fox.html

[11] Nima Sanandaji, Scandinavian Unexceptionalism: Culture, Markets, and the Failure of Third-Way Socialism, 18 (Institute of Economic Affairs, 2015)

[12] Denmark’s prime minister says Bernie Sanders is wrong to call his country socialist, VOX (Oct. 31, 2015), https://www.vox.com/2015/10/31/9650030/denmark-prime-minister-bernie-sanders

[13] Socialism, Merriam-Webster (Dec. 29, 2018), https://www.merriam-webster.com/dictionary/socialism

[14] How Venezuela Ruined Its Oil Industry, Forbes (May 7, 2017), https://www.forbes.com/sites/rrapier/2017/05/07/how-venezuela-ruined-its-oil-industry/#612e494f7399

[15] See Supra. note 11 at 12-13, (Quoting Irish economist James Beddy)

[16] Id., 13-15

[17] Id., 12-13

[18] Id. at 15

[19] Id. at 15-16.

[20] Id. at 17-18

[21] Id. at 20-21

[22] Id. at 11, 22

[23] Id., at 22-24.

[24] Id..

[25] Id., at 13 (Quoting Irish economist Kevin O’Rourke)

[26] Id.

[27] Id., at xv

[28] Id.

[29] Overwhelmed by Refugee Flows, Scandinavia Tempers its Warm Welcome, Migration Policy Institute (Feb. 10, 2016), https://www.migrationpolicy.org/article/overwhelmed-refugee-flows-scandinavia-tempers-its-warm-welcome

[30] See Supra. note 26.

[31] Loki, Norse Mythology for Smart People, https://norse-mythology.org/gods-and-creatures/the-aesir-gods-and-goddesses/loki/

[32] Id.

South Ossetia: Separatist Client or Sovereign State?

South Ossetia: Separatist Client or Sovereign State?

By Erich Greiner

             This past August marked a stark anniversary in global affairs. For ten years Russian Federation forces have occupied territory within the state of Georgia, after brief but intense combat operations between the Georgian military and separatist fighters of the “breakaway provinces” of South Ossetia and Abkhazia.[1] According to the European Union, the five-day conflict resulted in the deaths of 170 Georgian military personnel, 14 Georgian law enforcement officers, and 228 Georgian civilians.[2] Nearly 289,000 Georgians are estimated as remaining “internally displaced persons,” due to the Georgia-South Ossetian conflicts of the 1990s and 2008, according to the Central Intelligence Agency’s World Fact Book.[3] Russian forces, by comparison, sustained 283 casualties (wounded or killed) and South Ossetian militants and civilians sustained 365 casualties.[4]

The Russian Federation is still attempting to tell its version of the story of the 2008 conflict and its subsequent actions following the fighting. Pro-Russian outlets describe their involvement and continued occupation as little more than a peace-keeping effort, as tensions between the South Ossetian separatists and the Georgian government reached their boiling point that August.[5] They adopt the language of sovereignty and self-determination on behalf of the South Ossetians and Abkhazia. In fact, in an interview done by Sputnik International News on the eve of the ten-year anniversary of the Russian occupation, the former foreign minister and prime minister of Abkhazia, Sergei Shamba, stated that Georgian forces had been surrounding the capital of South Ossetia, before initiating the fighting by firing upon it with artillery.[6] He also claims that international negotiators had already sided with Georgia and were unresponsive to Georgian aggression.[7] Shamba goes on to describe the Russian government as previously having provided humanitarian aide to Abkhazia by rebuilding the railroads of the region, so that they could better mobilize troops to defend against Georgian incursions[8] into the regions recognized as independent states by Russia, Nicaragua, Venezuela, Nauru[9], and Syria[10].

However, an examination of the history of Russian-Georgian relations indicates motivations well beyond simple humanitarian support. In fact, Russian interest in the region dates to 1918, when Georgia gained its independence from the Russian Empire.[11] Only three short years later, the Red Army invaded Georgia and established dominion over the country, establishing Georgia and Abkhazia as Soviet Socialist republics.[12] South Ossetia was created by the Soviet regime only one year later, in 1922.[13] This continued until the end of the Cold War, and in 1990, South Ossetia declared independence from Georgia.[14]

Shortly thereafter, Georgia reestablished independence in April 1991.[15] Then, from 1993-1994, Abkhazian separatist forces engaged in armed conflict with the Georgian Army until a ceasefire was negotiated and Russian forces occupied the region.[16] Since that time, the continued Russian occupation has been a source of tension, including President Putin’s threatened military action, accusing Georgia of aiding Chechen insurgents; Russia’s refusal to have peacekeepers comply with Georgian visa requirements; firing upon an unmanned Georgian drone; and finally, when hundreds more troops were deployed in 2008, leading to the South-Ossetian conflict.[17]

Finally, though both factions have adopted a ceasefire mediated on behalf of the European Union by then-French President Nicolas Sarkozy, Russian Federation troops have blithely ignored its stated principles. Especially at issue is the fifth principle of, “withdraw[ing] to the positions held before hostilities began. . .” and restricting  “additional security measures” to the borders of South Ossetia.[18] In fact, Russian troops have pushed ever further into the heart of Georgia, expanding well past the disputed territory of South Ossetia to occupy almost twenty percent of land recognized as Georgian territory.[19] This practice of “borderization” through the establishment of illegal military checkpoints has limited Georgians’ freedom of movement.[20] There are now 19 Russian outposts in Georgia.[21]

Georgian territory is uniquely strategically valuable to the Russian Federation as well. Turkey is to its immediate west, Iran is to its South, and both the Caspian Sea[22] and Georgia’s Baku-Supsa Pipeline[23] enable the sale of oil. Georgia is also a potential new member state of NATO, and has been major ally to the United States’ war effort in Afghanistan.[24]

Though Russia’s other encroachments, such as those into Crimea[25], and in potential election interference[26] combined with clear violations of the terms of the cease-fire with Georgia cast a long shadow over the South Ossetian secessionist movement, the international community has still had to wrestle with the concepts of statehood, self-determination, and their relationship to recognition.[27]  When the traditional elements of statehood are considered: territory, recognition by other states, and population, the analysis of the status of South Ossetia is indeed complicated and troublesome.[28]

The international community at large has not recognized South Ossetia as its own sovereign state. The recognition of the current territorial boundaries of Georgia and acceptance of Georgia as a member state of the United Nation has de facto rendered South Ossetia’s declaration of independence void.[29] Additionally, as of April 15, 2008, the UN Security Council has also resolved to honor Georgia’s territorial claims—to the exclusion of all others.[30] However, enough land may be controlled by South Ossetia within its disputed borders to satisfy the territorial requirement of a state. [31]  Moreover, it is to be noted that South Ossetia has also been recognized in limited capacity through its entrance into contract and recognition by five other states, and as party to the cease-fire agreement that ended the skirmishes in the 2008 conflict.[32] Still, this has not brought full recognition of South Ossetian sovereignty by the international community, though the people of South Ossetia retain the right to self-determination.[33] Furthermore, though the right of secession of peoples of a recognized-state has historical precedence, it has generally been understood in practice as limited to cases of colonialism or in cases of extreme humanitarian crisis, such as genocide or ethnic cleansing. [34]

This reasoning is also why the Russian and South Ossetian argument in the guise of self-determinism analogous to the United States’ intervention in Kosovo has failed.[35] There, is no concern such as the Albanian ethnic cleansing of ethnic-Serbs in Kosovo that would mandate emergency humanitarian intervention or trigger a right of secession for the South Ossetian people.[36] Furthermore, whereas the recognition of Kosovo was hindered by Russia’s singular veto on the Security Counsel; whereas Kosovo had been classified a United Nations protectorate; whereas Kosovo had recognition from multiple international bodies including the United Nations, the European Union, NATO, the Western Members of the Kosovo Contact Group, and the Organization for Security and Co-operation in Europe, along with 46 United Nations member countries on an independent basis, South Ossetia has no similar claim.[37] As of now, South Ossetia, and its sister Abkhazia will likely remain “entit[ies] short of statehood”.[38]

 

[1] 2008 Georgia Russia Conflict Fast Facts, CNN (Apr. 3, 2018), https://www.cnn.com/2014/03/13/world/europe/2008-georgia-russia-conflict/index.html.

[2] Id.

[3] Middle East: Georgia, The World Factbook, Central Intelligence Agency (Oct. 17, 2018), https://www.cia.gov/library/publications/the-world-factbook/geos/gg.html

[4] 2008 Georgia Russia Conflict Fast Facts, CNN (Apr. 3, 2018), https://www.cnn.com/2014/03/13/world/europe/2008-georgia-russia-conflict/index.html.

[5] How Russia Recognized the Independence of Abkhazia and South Ossetia, Sputnik News (Sept. 8, 2018,     9:38), https://sputniknews.com/interviews/201808081067034864-how-russia-recognized-abkhazia-south-ossetia-independence/.

[6] Id.

[7] Id.

[8] Id.

[9] Countries that recognized South Ossetia’s and Abkhazia’s Independence, TASS (May 29, 2018, 4:59 PM), http://tass.com/world/1007058.

[10] Georgia Severs Relations With Syria For Recognizing Abkhazia, South Ossetia, Radio Free Europe Radio Liberty (May 29, 2018, 5:30 GMT), https://www.rferl.org/a/georgia-syria-establishes-diplomatic-relations-with-abkhazia-south-ossetia/29257063.html.

[11] 2008 Georgia Russia Conflict Fast Facts, CNN (Apr. 3, 2018), https://www.cnn.com/2014/03/13/world/europe/2008-georgia-russia-conflict/index.html.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Background: Six-point peace plan for the Georgia-Russia Conflict, Reliefweb (Aug. 15, 2008), https://reliefweb.int/report/georgia/background-six-point-peace-plan-georgia-russia-conflict.

[19] John Haltiwanger, Russia is quietly seizing territory in Georgia as it warns of a ‘horrible conflict’ if the Eurasian country joins NATO, Business Insider (August 7, 2018 5:11 PM), https://www.businessinsider.com/russia-quietly-seizing-territory-in-georgia-10-years-after-the-war-2018-8.

[20] Id.

[21] Id.

[22] Id.

[23] Andrew North, Georgia accuses Russia of violating international law over South Ossetia, The Guardian (Jul 14, 2015, 7:29 EDT).

[24] John Haltiwanger, Russia is quietly seizing territory in Georgia as it warns of a ‘horrible conflict’ if the Eurasian country joins NATO, Business Insider (August 7, 2018 5:11 PM), https://www.businessinsider.com/russia-quietly-seizing-territory-in-georgia-10-years-after-the-war-2018-8.

[25] John Simpson, Russia’s Crimea plan detailed, secret and successful, BBC News (Mar. 19, 2014), https://www.bbc.com/news/world-europe-26644082.

[26] New York Times: Russian hacking and Influence in the US Election, https://www.nytimes.com/news-event/russian-election-hacking; Rick Noack, Everything we know so far about Russian election meddling in Europe, Wash. Post (Jan. 10, 2018), https://www.washingtonpost.com/news/worldviews/wp/2018/01/10/everything-we-know-so-far-about-russian-election-meddling-in-europe/?utm_term=.d51eb453936d.

[27] South Ossetia, Oxford Public International Law (January 2013), http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e2068,

[28] Statehood (international law), Wex, Cornell Law School: Legal Information Institute, https://www.law.cornell.edu/wex/statehood_%28international_law%29

[29]  See Supra. note 27 ¶¶ 18

[30] Id..

[31] Id., at ¶¶ 20.

[32] Id., at ¶¶ 35.

[33] Id., at ¶¶ 25.

[34] Id., at ¶¶ 32.

[35] Sally McNamara, Russia’s Recognition of Independence for South Ossetia and Abkhazia Is Illegitimate: They Are Not Kosovo, The Heritage Foundation: Report Europe (Aug. 28, 2008), https://www.heritage.org/europe/report/russias-recognition-independence-south-ossetia-and-abkhaziais-illegitimate-they-are

[36] Ethnic Cleansing and Atrocities in Kosovo, PBS: War in Europe, https://www.pbs.org/wgbh/pages/frontline/shows/kosovo/cleansing/.

[37] See Supra. Note 35

[38] South Ossetia, Oxford Public International Law (January 2013), http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e2068, at ¶¶ 18