Via Financial Times

Bernie Sanders, the firebrand socialist contender for the US Democratic presidential nomination, has said that “billionaires should not exist”. He also admires the Nordic countries’ social democracy.

So take a guess at this question: which countries in the world generate the most billionaires? The answer is that Iceland, Sweden and Norway all have more billionaires per capita than the US.

This is an inconvenient truth not just for Mr Sanders, but for those Americans — the super-rich and those aspiring to join them — rattled by his performance in the primaries this week.

Joe Biden may have triumphed in the Super Tuesday polls. But this merely cleared the pitch for a contest between two alternative Democratic visions for America: the leftwing radicalism of Mr Sanders and to a lesser extent Elizabeth Warren, and the moderate approach whose proponents have all rallied behind Mr Biden, a former vice-president.

The contest remains neck-and-neck. Super Tuesday was Mr Biden’s day overall, but Mr Sanders has won California, the state with the most delegates. He and Ms Warren together also racked up close to half the votes in national primary polling.

So there is clearly strong support for a radical agenda that Americans are often told will destroy their opportunities for financial success and involves policies such as stronger regulation, higher personal and corporate taxes, and greater government involvement in areas such as healthcare, education and green investment.

Those worried Americans should think again. If such policies make it hard to get rich, why does the US only have 1.7 billionaires per million people, when Norway has 2.0, Sweden 2.4, and Iceland 3.1, according to analysis by Karl Moene for 2015? (The last case admittedly corresponds to a sole billionaire for a population of 300,000.)

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Elsewhere in Europe, billionaires are scarcer — after excluding tax havens, which simply attract large fortunes made elsewhere. Nevertheless the remaining two Nordics, Finland and Denmark, both have 0.9 billionaires per million, more plentiful than either France, with 0.7 per million people, or the UK, which has 0.8.

Similar patterns can be found for the lesser rich. Norway has twice as many people owning more than $100m per capita than the US. It also has nearly four times as many whose wealth is “only” $30m or more.

So the Nordics make room for a higher frequency of individual fortunes than the US. But they are also more egalitarian, since there are fewer very poor people while the extremely wealthy own a smaller share of total national income.

There are of course differences between what Mr Sanders and Ms Warren propose and actually existing social democracy, as practised in the Nordics. But it is a fair bet that both would be happy to see the Nordic model implemented in the US if that was the choice on offer. Would they take the additional billionaires in the bargain too?

The bigger question is for their rich detractors. They ought to ask themselves why the Nordic countries’ more interventionist states still leave them good places to make money. There are at least three reasons.

First, public goods are a boon for private profit. Good transport, healthcare, and highly skilled populations paid for by the government are all things that reduce the costs that private businesses would otherwise have to shoulder.

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Second, the Nordics’ union-driven wage egalitarianism encourages business to adopt productivity-enhancing technology. Since low-skilled labour is relatively expensive and high-skilled labour is relatively cheap, there is more to gain from investing in the most efficient capital. As Norwegian comedian-cum-sociologist Harald Eia has put it, the labour movement subsidises capitalists.

Third, a generous safety net sustains trust, and trust is an enormously valuable resource. It economises on lawyers and courts by reducing the need for contracts and litigation when social norms can be relied on. It also helps minimise workplace antagonism over technological upgrading.

Both America’s rich and aspiring rich should, at a minimum, suspend their reflexive judgment that it would be a disaster for them if Democrats nominate a leftwing candidate — let alone that another Donald Trump presidency would be better for their businesses and bank accounts.

But Mr Sanders and Ms Warren also need to acknowledge another aspect of the Nordic economies’ success. They have always been among the world’s most open to international trade, vastly more so than the US economy. This openness is accepted by the population, arguably precisely because of the countries’ strong safety nets.

Rather than mimicking Mr Trump’s aversion to free trade, Mr Sanders and Ms Warren would do better to argue that they will make free trade safe for the most vulnerable Americans.