Democratic socialism describes a socialist economy where production and wealth are collectively owned, but the country has a democratic system of government. The goal of democratic socialism is to achieve socialist goals of equality while opposing socialist ideologies. Democratic socialism is opposed to the Soviet economic model, command economies, and authoritarian governance.
Under democratic socialism, the ownership of private property is limited. The government regulates the economy. Different programs offer assistance and pensions.
A democratic socialist believes that the government should provide a range of essential services to the public for free or at a significant discount, such as health care and education. Unlike socialists, democratic socialists do not believe the government should control all aspects of the economy, only help provide basic needs and help all of its citizens have an equal chance of success.
Social democracy and democratic socialism are often used as synonyms; however, there are differences. Social democracy has a mostly capitalistic economy (i.e.: a less-regulated market and fewer rules against private ownership of land, utilities, etc.), but also with large-scale social welfare programs.
Social democracy is seen in the Nordic model, which includes a welfare state based on free market capitaliam. The model also include multi-level collective bargaining, a high percentage of the workforce unionized, and a large percentage of the workforce employed by the public sector. The Nordic countries were shaped by social democracy. Many other European countries have social democracies.
Socialism and communism are both built on the premise that individuals contribute to society based on their ability to do so. Both concepts have the government playing a larger role in economic planning, investment, and government control institutions. Both also remove private business as a producer of goods and services.
There is a big fundamental difference between socialism and communism. Individuals under a proper communist system would not have money and would be given what the government thinks you need in terms of food, clothing, housing, etc. The people would not need to work harder to receive the same amount as anyone else. Under socialism, individuals are compensated based on their individual contribution; therefore, those who work harder would receive more.
Furthermore, communism views all property as public property, while socialism allows individuals to still have their own private property. Communism is an economic and political philosophy, and socialism is an economic philosophy. Lastly, communism abolishes class distinctions as everyone is effectively treated equally, while socialism allows class distinctions to exist, as there is the opportunity for some to achieve more wealth than others.
Both democratic socialism and socialism advocate for a redistribution of wealth and power to meet public needs, not make profits for a few. Both aim to weaken the power of corporations and increase the power of the working people.
Democratic socialists, however, do not think the government should immediately take control of all aspects of the economy. Democratic socialism focuses more on providing basic needs to all people, such as health care and education. Democratic socialism, unlike socialism, would achieve this through democratic means and not an authoritarian rule.
The largest of the failed socialist countries is the Soviet Union, which fell in 1991. Following World War II, the United States helped rebuild Western European countries, all of whom were free marketing economies that rebuilt rapidly by establishing the European Union and trading with one another. On the other hand, the Soviet Union seized government control of Eastern European nations, all of which became socialist states. These included: Bulgaria, East Germany, Hungary, Poland, Romania, Czechoslovakia, Belarus, and Ukraine. While East Germany reunified with West Germany and joined the thriving EU economy, the rest of the Eastern European countries faced economic hardship after the Soviet Union fell. Many of these countries remain the poorest European countries today.
Some argue that there has been no completely socialist country that has been successful, only countries that have seen success in adopting socialist policies.
Other countries that have adopted and enacted socialist ideas and policies to various degrees, and have seen success in improving their societies by doing so, are Norway, Finland, Sweden, Denmark, Great Britain, Canada, the Netherlands, Spain, Ireland, Belgium, Switzerland, Australia, Japan, and New Zealand.
Scandinavian countries are often touted as socialist paradises whose models should be adopted on a larger scale. However, that idealistic statement tells only part of the story. Sweden is a great example. It has a free-market economy, meaning that the government interferes very little in business. There are very few business regulations, particularly regarding workers; in fact, Sweden and other Scandinavian countries do not have minimum wages for their workers.
One area where Sweden does have socialist policies is in its school system. In the United States, the government pays for public schools, and parents who prefer can pay to send their children to private schools instead. Sweden offers school vouchers to all children, meaning that the government will pay for school wherever the parents decide to send the children. The children can go to schools run by religious institutions or those run by the government.
Swedish workers do pay more in taxes than workers in non-socialist countries, like the United States. The reason they do so is so that the government has money for generous social services, including maternity and paternity leave for new parents and the school voucher system. There is also more income equality in Scandinavian countries, like Sweden, than in the United States, because of how the government redistributes wealth.
However, Sweden is not a “pure” socialist country. It has a free-market economy with very few government regulations, something that is a capitalist’s dream. Perhaps the lesson from Sweden is that both socialism and capitalism can co-exist in such a way that children have equal access to education, no matter their income, while workers can enjoy rights that are inferred to them by the company rather than the government.
Is Finland socialist? The answer really depends on how you define socialism. Finland, like other Scandinavian countries, has a comprehensive social safety net that helps ensure that people have what they need to live productive, healthy, and happy lives. If your definition of socialism is individuals and businesses paying high taxes to ensure that wealth is being distributed equitably across the population, then yes, Finland is socialist.
However, Finland runs on a free-market economy, something that is contrary to how many people perceive socialism. If your definition of socialism is heavy government regulation of business, then no, Finland is not socialist. In fact, government regulations are so low that Finland does not even have a minimum wage.
The best way to look at Finland’s economy and politics may be to see it as a blend of capitalism and socialism. Some people refer to this as “compassionate capitalism,” meaning that markets can run freely, with minimal government regulation and interference; the role of the government is to ensure social welfare by providing generous benefits to the population through the revenue generated by taxes. Those benefits include free schools, including college, for all students and generous maternity and paternity leave for new parents.
This model may seem like something that other countries should replicate. After all, who wouldn’t want a free market that has few government regulations, coupled with government benefits that ensure everyone is healthy and productive? The challenge is applying that model in countries that are less homogenous and have a significantly higher population than Finland, like the United States.
Finland’s model may work so well because the country’s population is relatively small and homogenous. However, other countries may benefit from applying aspects of their economic and political system.
Many people equate socialism with communism but doing so is a mistake. Communism describes a complete economic and political system in which the state owns all property and means of production; markets have no power to regulate prices or determine what should be produced. Socialism describes an economic system in which taxes are generally high so that the government can provide a broad social safety net for services such as education, healthcare, and public pensions.
A country can be both capitalist and socialist, as capitalism refers to free markets that, unlike in communism, can determine prices and modes of production. Those who have capital, or a sufficient level of wealth, can begin businesses that employ people and provide a good or service that the market demands. Switzerland is a prime example of a capitalist country that has some socialist policies.
Switzerland’s economy is almost entirely made up of small- and medium-sized businesses because its government promotes policies that are very friendly to entrepreneurship. The education model in Switzerland is also very friendly to businesses, as students are required to gain job training as part of their academic education. It also has relatively low taxes – the average tax rate for individuals is less than 9%, significantly less than in the United States, and even less than countries that are generally classified as socialist.
Healthcare in Switzerland can be understood as somewhat socialist. A public insurer cannot turn anyone down for any reason, including a pre-existing condition. However, the insured individual, rather than the employer or the government, is required to pay the premiums. Education in Switzerland is free, and students who pursue an academic route, rather than a vocational one, are given free admission to universities.
Generally, Switzerland is too decentralized to be genuinely socialist. Much of the government authority is relegated to the various cantons; while a particular canton can have more socialist policies than another one, the country as a whole is capitalist with some socialist elements.
Denmark is generally considered to be a Scandinavian country, and the Scandinavian countries – which also include Finland, Norway, and Sweden – are renowned for their socialist policies and overall high rates of happiness and well-being. That said, Denmark has a free-market economy with generous socialist elements, making it a blend of capitalist and socialist.
Denmark has a very high tax rate, around one-quarter to one-third of income, depending on the individual’s income. The government uses this income to create a wide array of social programs, including healthcare, education, and job training. Because there are so many social programs to support people, businesses are more willing to engage in risks that can improve their productivity. The Danish economy is thereby able to encourage companies and individuals because they know that one risky venture will not lead to catastrophe.
Like other Scandinavian countries, the Danish government has very few regulations on businesses. Instead, its policies are more focused on social programs. As such, there are very few regulations on hiring and firing, and there is no minimum wage. Companies can engage in international trade with very little government interference, thereby giving a boost to the country’s economy and ensuring that its currency remains sound. As a result, Denmark has a very high rating in terms of its free-market index.
Denmark is probably more capitalist than the United States because its government encourages businesses to run solely on market principles rather than government policies. Additionally, it has better rates of healthcare, education, and social security than many other capitalist countries because the high tax rates create a redistribution of wealth in the form of social programs.
There are concerns that Denmark’s social programs are unsustainable, so within the coming decades, we may see substantial changes in this capitalist country that has many socialist programs.
France is a country with a socialist party that has long had some level of power within its government. Two recent presidents, François Mitterrand and Francois Hollande, were both from the Socialist Party. The tax revenue to GDP (gross domestic product) ratio is 46.2 percent, the highest in the developed world. This high tax revenue that the government collects is spent on social programs, including unemployment benefits, government-sponsored paid maternity leave, healthcare, and education. However, France is also one of the most successful capitalist countries in the world. One might say that its socialist system provides a cushion to its capitalist mindset, thereby encouraging people to take more risks and providing a higher level of social cohesion.
France arguably is a socialist country, considering its high tax rates and extensive social programs. However, it is not communist, as the state does not attempt to control the means of production. Instead, those forces are left to markets, which are remarkably good at regulating themselves. However, some of the largest industries in France have nationalized, meaning that the government owns the largest share in them. Additionally, France’s government has many regulations on businesses, and firing workers is very hard to do. This concept makes hiring workers risky, as they may ultimately cost the company money, but the company may be unable to get rid of them.
Unlike many other socialist countries, France’s taxes are considered by some to be regressive. This idea means that instead of the highest tax burden falling on the wealthy, it actually falls on the middle-class and the poor. While these social classes are more likely to use more of the government-funded social programs, the high taxes that they pay mean that wealth is not being redistributed. In a genuinely socialist model, wealth is redistributed across social classes to ensure that the poor and the rich have equitable access to all services. Meanwhile, the wealth that is among the richest in the country remains among those in that social class.
The prospect of calling Germany a socialist country is rather frightening. After all, the Nazis were the Nationalist Socialist party. However, socialism and Nazism are two things so entirely different from each other that they should not be used in the same sentence. Today, Germany is a capitalist, free-market country that has many elements of socialism to help provide people with a safety net.
During the Cold War, Germany was divided into East and West, with the Soviet East being communist and falling into dire poverty, and the capitalist West thriving. The capitalist West did away with all price controls that were established under Hitler’s Nazi party and dramatically cut taxes. The result was that markets, which are remarkably good at regulating themselves, were able to thrive. Meanwhile, the German government established enough welfare programs to ensure that individual people were able to leave happy and productive lives.
Germany’s economic policies helped to ensure that when the East and West were reunited after the Cold War, the two economies would be able to integrate, and the East would be lifted out of its poverty. Germany today has very few regulations on business, but it does have anti-trust laws that allow the government to intervene if one company begins to monopolize an industry.
Germany’s chancellor, Angela Merkel, has promoted many socialist policies to ensure that Germany’s economy remains strong. Healthcare, education, and other social services are universally available. Meanwhile, low levels of government regulation on businesses help ensure that the free-market economy can thrive. Germany is a capitalist country with socialist policies. Those two aspects combined, capitalism and socialism, helped Germany reunite after the fall of the Berlin Wall and keep its economy strong.
The Scandinavian countries – which include Norway, Denmark, Finland, Sweden, and sometimes Estonia and Iceland – are often characterized as socialist. However, each of these countries has its own economic and political model, which bears hallmarks of both socialism and capitalism. Norway, like other Scandinavian countries, is nearly fully socialist nor fully capitalist.
Norway has some of the strongest social welfare programs in the world. These include free education for all, including university students, and universal healthcare coverage. Workers have public pension plans, which help ensure that they have a livable income should they become unemployed or retired. These services are funded through high taxes. Many people look at these aspects of the Norwegian model and claim that Norway is absolutely a socialist country.
However, Norway also embraces free-market capitalism. This idea means that there are very few government regulations on businesses – significantly fewer than in the United States. Most workers belong to labor unions because the government does very little in regards to workers’ rights. In fact, Scandinavian countries, including Norway, do not even have minimum wage laws. Fifty-one percent of workers in Norway are members of labor unions, and labor unions bargain at a national level to ensure that workers have safe working conditions and fair, livable wages.
In Norway, taxes are higher than in many other capitalist countries. However, the role of the government is not to regulate business. Instead, those taxes fund public services, such as schools and healthcare. Where the government does intervene in business is to provide retraining for workers that are likely to become unemployed or dislocated due to job obsolescence. Rates of private property ownership are higher than in many capitalist countries.
So is Norway socialist? The answer to that question really depends on what your definition of socialism is.
Canada is more socialist than the United States, but by and large, classifying Canada as a socialist country requires a very narrow definition of what socialism is. Socialism refers to a broad spectrum of economic systems in which property and wealth are shared equitably. It is not incompatible with capitalism; though some people may theoretically talk about socialism versus capitalism, Canada is an example of a successful capitalist country with socialist elements.
Canada has free healthcare and education, both of which are hallmarks of a socialist system. However, the Canadian economy is seeing more private healthcare and education businesses, which are turning the tide against these socialist elements. The public, government-run healthcare system is underfunded, so people in Canada are looking more to private providers for their healthcare needs. However, because the public healthcare and education systems remain secure, Canadians have better outcomes in both healthcare and education than in the United States.
Other than healthcare and education, Canada’s social safety nets are significantly smaller than those in other countries that are generally classified as socialist, such as Scandinavian countries. Unemployment insurance hovers at 40% of a person’s original income. Additionally, at least partially due to underfunding, many government-run social programs are being rolled back.
At the same time, Canada has a free-market, capitalist economy, where both small businesses and corporations are flourishing. The tech and AI industries are growing rapidly in Canada, thanks to its business-friendly policies, and skilled workers are migrating there from other countries to contribute to its AI boom. This boom would not be possible without an economic system that favors people who work hard, remain competitive and contribute to the financial success of the industry and the country.
There is probably no such thing as a truly socialist country, and Canada is a case in point. Though many American politicians point to Canada as a socialist success story, its system only contains elements of socialism to help close the gap between the wealthiest and the poorest.
The list of democratic socialist countries is as follows: Armenia, Bolivia, Brazil, Croatia, Ecuador, France, Germany, Ireland, Italy, Luxembourg, Moldova, the Netherlands, Nicaragua, Peru, Portugal, Serbia, Slovenia, Tunisia, Turkey, the United Kingdom, and Venezuela.
There are a total of 21 democratic socialist countries in the world.