Socialism and the Pandemic

The right wing of US politics takes every opportunity to condemn socialism, often citing Venezuela and Cuba as countries where socialism has been associated with economic dysfunction and poor decision making, not merely ignoring the role of authoritarianism but claiming that socialism requires an authoritarian regime to govern.

Conspicuous by its absence is mention of Denmark - you know, that country where McDonald's workers earn a living wage rather than being regarded as kids in their first jobs doing it for pocket money while in reality still financial dependents of their parents.  No, Denmark is not considered a socialist nation, as it has many features of a market economy side-by-side with high taxes and an extensive array of social welfare programs.  And it certainly does not satisfy the classic definition of socialism in which the means of production are controlled by the State.  But there is a great deal about the way Danish society works that Americans - especially those on the right - regard as socialist.

What did Denmark's government do about shutting down its economy for the pandemic?  It told everyone there would be a freeze.  Companies not in essential businesses would simply stop doing business.  They would not terminate or furlough any employees, but instead keep them on the payroll.  Those businesses would receive government assistance sufficient to cover their residual expenses, while employees would receive their paychecks from the government, essentially keeping pace with what they were earning.

Denmark has a strong economy.  Not strong like President Trump says the US economy is, but strong in reality.  The national treasury was brimming with budget surpluses, so there was enough money to cover the financing of the freeze for several months without incurring debt.

And now the Danish economy is reopening, as broadly and widely as any in the West - more so than most - with population-adjusted numbers of COVID-19 cases and COVID-19 deaths comparing favorably with the rest of Europe - and with the US.  Population-adjusted cases for Denmark are 45% of the US number; deaths, 39%.

When the Danish government first announced how it was going to manage the economic shutdown, it was estimated that for the USA to do the same thing, it would cost between $2T and $2.5T.  Perhaps you've noticed that we have already appropriated more money than that, yet the unemployment rate has soared, and other economic indicators are calamitous, with widespread effects on Americans that have people desperate to put an end to restrictions despite statistics that portend disastrous increases in cases and deaths.

Maybe there is no way we could have done what Denmark did.  It would have been so alien to the way our economy operates that a proposal to do such a thing would have been regarded as preposterous in the halls of Congress.

But let us be honest: the approach taken by Denmark is undeniably socialist, and the strength of the Danish economy that made it so easy to decide to do it exists despite the many aspects of that nation's economy that are socialist in character.

Let's broaden our view of socialism beyond Castro's Cuba and Venezuela under Chavez - the "socialism" America's right wing loves to hate - and acknowledge that it can work very well, indeed.