I’ve been an avid lurker on this site for quite some time now, but just created a profile in order to contribute to this discussion.
I’ll try to stay out of the more advanced theoretical discussion and take a more practical approach.
Isn’t it, in the end, just a matter of individual preferences?
I’ve been living in a Scandinavian country with high marginal tax rates, a large public sector, public education and public health care my entire life. It is not a socialist country, there are no 5-year plans and there is no government telling me what to produce and what not to produce. If I work, I have to pay taxes. In return I get quality education, health care etc. And yes, some of my income is redistributed to those who are not as well of as me. There is no feeling of state intervention in my day to day life. I’m free to do whatever I choose to do, given the constraints of the society I live in. If I choose to take a long education, I’ll end up paying higher taxes once I graduate than someone who did not take a long education. My after tax-income will still be higher though. How is this, in practice, different from an American taking a student loan (or parents saving up), which she has to pay back afterwards?
As I see it in this thread, the main argument against socialism is that it prevents you from getting rich. Even if that was correct, so what? Is the possibility for accumulation of wealth the pennicale of liberty? Not from my point of view.
Are there problems with Social Democratic countries? Yes, of course:
- Are the marginal tax rates too high? Possibly. Especially if you look at it from a long run perspective.
- Is the public sector too big (and hence inefficient)? I think so. There is so much waste in a large public sector, but I do believe there is a way of correcting this (another discussion).
- Does free-riding occur? Most definitely. But I can guarantee that there is a lot of people who work hard, pay their taxes and maintain a good living standard. So what if we live in smaller houses and drive smaller (and fewer) cars. Last time I checked the level of consumption did not equal living standards.