The Word "Socialism" Is Toxic in This Country

[The Velveteen Ocelot]

61. Part of the problem is that most people don't know what it means.

Even those who claim to embrace it and call themselves socialists probably aren't real socialists at all. Socialism is an economic system in which the means of production and distribution of goods and services are owned and controlled collectively - that is, by the government. "Democratic socialism" assumes that the government, elected by the people, is controlled by the people and therefore the people own and control the means of production and distribution of all goods and services. But socialism, as normally defined, does not allow for private enterprise. You don't own your own business; you don't own stock in a private business. The government that you elected owns and manages everything. I doubt very much that this is the kind of arrangement most Americans want or would vote for.

What many progressives are promoting as socialism is really just a highly-regulated capitalist system in which the government, via taxation, provides a strong social safety net that includes benefits like universal health care, higher education, child care, adequate pensions, etc., which are often touted as "free." Of course those things are not free; they are paid for or subsidized by the government through taxes and are therefore both far less expensive than if supplied by private businesses, and are equally available to everyone. This is basically the Scandinavian model, which is often described as "socialist," but it really isn't.

In Norway, for example, benefits like child care, medical treatment and pensions are "free" or low-cost, in that they are provided by the government. But Norway is not a socialist country; it's a constitutional monarchy with a democratically-elected parliament and a highly-regulated capitalist economy. The only way in which Norway comes even close to socialism is with respect to Equinor (formerly Statoil), its oil production/distribution corporation, 70% of whose stock is owned by the Norwegian government and a government pension fund. The remaining 30% of its stock is publicly traded. Equinor owns the North Sea oil production facilities as well as the gas stations (production and distribution).

The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector. It has over US$1 trillion in assets, including 1.3% of global stocks and shares, making it the world’s largest sovereign wealth fund. In May 2018 it was worth about $195,000 per Norwegian citizen. It also holds portfolios of real estate and fixed-income investments. Many companies are excluded by the fund on ethical grounds.

The Government Pension Fund Norway is smaller and was established in 1967 as a type of national insurance fund. It is managed separately from the Oil Fund and is limited to domestic and Scandinavian investments and is therefore a key stock holder in many large Norwegian companies, predominantly via the Oslo Stock Exchange.

https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway

Income from pension fund investments as well as regular taxes support the country's social safety net. Norwegians are taxed on their assets, and there are also value-added taxes and special taxes on things like cars, cigarettes and liquor. I have a relative in Bergen who rolls her own cigarettes, which is a fairly common practice there because the tax on pre-made cigarettes is so high. But social services like "free" college and "free" health care are not free; they are paid for by taxes and investments from the sovereign wealth fund. And apart from Equinor, corporations are not government-owned, but are owned and operated by private individuals. There is even a stock exchange in which the stock in private corporations is publicly traded, just like in the US. It has an enviable social welfare system, made possible at least in part by investment in the income derived from its most important natural resource. But it is not a socialist country. If we're going to deal with right-wing accusations about socialism we are going to have to understand what it means.