With the rise in popularity of social democracy (a highly regulated market economy), Samuel Gregg has some words of warning against the system. “[T]he briefest of surveys of European social democracy’s history,” he writes in a new article for the Stream, “illustrates how these policies invariably induce the type of slow-motion decline that’s turned much of today’s European Union into the sick man of the global economy.” Americans looking to Bernie Sanders for a social democratic answer to their problems should think twice.
Gregg discusses European social democracy:
If one was to describe the European social democratic project today, it might be summarized as enveloping citizens from birth to death in a web of protections and benefits that seek to shield people from life’s uncertainties, especially the turmoil often associated with market economies.
This translates into things like government-provided healthcare, state-funded public education, extensive labor market regulation, and generous welfare for the poor, disabled, and elderly. All this is provided and managed by a government and large public sector that also seeks to smooth the economy’s ups-and-downs through tools such as deficit-spending and targeted subsidies. Amidst these arrangements, private property and market-mechanisms such as free exchange are maintained in place, albeit with considerable restrictions.