Neal Meyer has a piece at Jacobin where he seeks to define the phrase “democratic socialism.” I had a similar post in late June here at People’s Policy Project.
Overall, Meyer’s piece is fine as far as these things go. But there is a turning point in the essay in which he attempts to distinguish “social democracy” from “democratic socialism” where he makes clearly false factual claims that really need to be corrected if we want to have a serious discussion about this idea.
In rare instances — usually following massive wars and economic crises — progressive governments have been able to win victories. The Scandinavian countries are what we call “social democracies,” societies with robust social safety nets and labor movements that check the worst tendencies of capitalism and limit the power of the wealthy in key ways.
Over the course of the twentieth century, workers in these countries won full employment, a strong welfare state, and high levels of unionization. But they never successfully challenged the source of capitalist class power: their ownership rights over the major national corporations.
The idea that the Nordic countries have avoided challenging the capitalist class’ “ownership rights over the major national corporations” is one that you see thrown around by just about everyone in the discourse. So it’s understandable why Meyer repeats the conventional wisdom in the US discourse here. But this conventional wisdom is simply wrong.
As I noted in Current Affairs earlier this month:
In reality, the Nordic economies do not provide any support for the idea that relatively high levels of state ownership are incompatible with stable and successful economies. Sweden has 48 state-owned enterprises, Finland has 67, and Norway has 74.
The level of state ownership in Norway in particular is staggering, even after two successive conservative governments have chipped away at it. The Norwegian state owns the country’s largest oil company Equinor (previously called Statoil), the country’s largest telecommunications company Telenor, and the country’s largest financial services group DNB. This would be like if the U.S. government owned Exxon Mobil, Verizon, and JP Morgan Chase.
Finland’s state ownership portfolio is somewhat less impressive but includes in it the airliner Finnair, the infrastructure engineering company VR, and the energy company Gasum. Finland’s state also owns a few oddball enterprises like the public relations company Nordic Morning and, until earlier this year, the wine and spirits company Altia.
What’s particularly weird about Meyer’s claim here is that, not only is state ownership of major enterprises common in some Nordic countries, but also government documents about state ownership in Finland and Norway generally justify that ownership in precisely the terms that he lays out in his piece.
If capitalists don’t like our democratic demands to, say, stop polluting the planet or pay workers a living wage, they can simply pull their investments and move their jobs to another state or country — and we have little recourse to stop them.
The Soria Moria Declaration of the Stoltenberg government had this to say:
The State is a major owner of Norwegian business. State ownership guarantees our control over our shared natural resources and provides revenues for the common good. State ownership can be decisive in ensuring national ownership and ensuring national head-office activities of key businesses in Norway in years to come. Public ownership is important to safeguard key political goals within district, transport, cultural and health policies.
“Ensuring national ownership” is the mind-numbing corporate-speak way of saying “preventing capital flight.” The possibility that private ownership will facilitate the exit of major corporations is a risk that the governments of Norway and Finland seem to take pretty seriously. And “socialism,” meaning state ownership of those major corporations, has been part of their answer to that problem.
Here’s a Norwegian government white paper:
Companies with State shareholdings manage substantial economic and socially beneficial assets. The State is an owner of some of the country’s largest companies in order to ensure that national ownership of key activities that contribute to the centres of excellence associated with head office functions and research and development activities remain and develop in Norway. This makes the State an owner of undertakings that are highly significant in Norwegian industry and society.
The same document laments that insufficiently aggressive state ownership policies have lately led to a state of affairs where:
We are seeing an increasing trend for Norwegian knowledge businesses to be sold as soon as they achieve international standing. Norway depends on good contacts with strong international capital and competency environments, but in many cases, selling out means that we do not build up long-term knowledge industries and expertise in Norway. We risk undermining the results of long-term research and development, which are simply not reflected in short-term stock-market values. A better strategy must therefore be developed for ensuring national ownership of key businesses in the knowledge society.
The high number of state-owned enterprises in these countries is not exclusively justified in terms of “ensuring national ownership.” The Norwegian justifications also seem to lean heavily on the idea that state ownership of certain kinds of enterprises is key to ensuring the value of natural resources flows to the common good. But nonetheless using public ownership intentionally to stop capital outflows is something that is very much alive and well in these countries, contrary to Meyer’s claims.
Reckoning with Norway
In addition to correcting the record, I think it is important for socialists to reckon with Norway for two reasons.
First, the most powerful argument for a particular system or program is that it has been tried and works. This is why Bernie Sanders sells Medicare for All by pointing to other countries with single-payer systems. If another country has it, and it works, then it is hard for someone to say it is ridiculous on its face, which is how both conservatives and moderate liberals want to treat basically any proposals that come out of the left. Along these same lines, pointing out that we have successful countries like Norway where the state owns the vast majority of the national wealth and a lot of major corporations provides an easy way to argue for those things here.
Second, starting with an appropriate understanding of Norway or Finland (or any country for that matter) is necessary for articulating where those countries fall short of the ideal and how we would do it differently. Meyer’s basic approach of saying “Nordic countries plus X” is a good one, but only if X is actually something that isn’t present in Nordic countries. “Nordic countries plus public ownership of major corporations” is just to say “Nordic countries, Norway and Finland in particular.”