Swift Current NDP News

Scientific American has an article that takes a look at whether the right-wingers are correct about laissez-faire capitalism. That is that a low tax, small government, low social program free-market society is better for the majority of its citizens than one with higher taxes and strong social programs. Often cited in defense of a free-market economy is the work of economist Friedrich August von Hayek.

Austrian-born free-market economist Friedrich August von Hayek suggested in the 1940s that high taxation would be a "road to serfdom," a threat to freedom itself.

By comparison Jeffrey D. Sacks looks at the empirical records of supply-side, free-market economies versus social-welfare states that have "high rates of taxation and social outlays". He broke them into the following groups; Nordic countries (Denmark, Finland, Norway and Sweden) and Anglo-Saxon countries (Australia, Canada, Ireland, New Zealand, the U.K and the U.S.A.). He came to these conclusions:

On average, the Nordic countries outperform the Anglo-Saxon ones on most measures of economic performance. Poverty rates are much lower there, and national income per working-age population is on average higher. Unemployment rates are roughly the same in both groups, just slightly higher in the Nordic countries. The budget situation is stronger in the Nordic group, with larger surpluses as a share of GDP.

The Nordic countries maintain their dynamism despite high taxation in several ways. Most important, they spend lavishly on research and development and higher education. All of them, but especially Sweden and Finland, have taken to the sweeping revolution in information and communications technology and leveraged it to gain global competitiveness. Sweden now spends nearly 4 percent of GDP on R and D, the highest ratio in the world today. On average, the Nordic nations spend 3 percent of GDP on R and D, compared with around 2 percent in the English-speaking nations.

The Nordic states have also worked to keep social expenditures compatible with an open, competitive, market-based economic system. Tax rates on capital are relatively low. Labor market policies pay low-skilled and otherwise difficult-to-employ individuals to work in the service sector, in key quality-of-life areas such as child care, health, and support for the elderly and disabled.

The results for the households at the bottom of the income distribution are astoundingly good, especially in contrast to the mean-spirited neglect that now passes for American social policy. The U.S. spends less than almost all rich countries on social services for the poor and disabled, and it gets what it pays for: the highest poverty rate among the rich countries and an exploding prison population. Actually, by shunning public spending on health, the U.S. gets much less than it pays for, because its dependence on private health care has led to a ramshackle system that yields mediocre results at very high costs.

Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness.

I know, you right-wingers out there don't buy this "science" thing. You know basing all of its conclusions on verifiable "facts" and stuff. But those of us who actually want to make the world better for everyone, not just ourselves, count on knowledge to aid us in making informed decisions. Scientific American is not known as some left-wing publication. It is only on one side, science's side. It disseminates the facts and allows you to draw conclusions from them.

So, open your minds and embrace socially responsible governmental policies that will make our society better for everyone, not just the wealthiest among us.