It Can't Happen Here
Why Obama won't bring European social democracy to America.
Conservatives have finally figured out their critique of President Obama's agenda, and it's a familiar one: He wants to make us French. The columnist Charles Krauthammer recently called the president's address to a joint session of Congress last month "the boldest social democratic manifesto ever issued by a U.S. president." Newt Gingrich claims that Obama wants to bring us "European socialism."
Socialism is a scare word in our political culture and a poor description both of Sweden these days and of whatever it is that Obama has in mind. But the case that the United States is moving away from market capitalism and toward a European-style social compact in which the state has a much broader role in the economy and the lives of its citizens is not absurd. The Obama administration is responding to the financial crisis by nationalizing financial institutions, subsidizing failing sectors of the economy, and, while it's at it, regulating industry to fight climate change. It views greater social equality as an explicit goal. If Obama succeeds in turning health insurance and funding for college into universal entitlements, he will have expanded Washington's obligations on the scale of an LBJ or an FDR. This year, government spending at all levels will jump to 40 percent of GDP. Obama's proposals could bring that figure even closer to the EU average of 47 percent.
A first question to ask about this expansion is: What, exactly, is so awful about European social-style democracy? France, Germany, Holland, Belgium, Norway, and Denmark are among the planet's more enlightened places, with excellent public services and benefits—not to mention really fast trains. What part of free universal preschool do we not understand? Studies suggest that higher levels of social equality in these countries correlate with longer, happier lives for their citizens. The young democracies of Eastern Europe, by and large, want the deal Western and Northern Europeans have, not the deal we Americans do.
The familiar downside to the trans-Atlantic model is less economic flexibility and social dynamism. Western European countries have higher taxes, lower growth rates, more unemployment, and less class mobility. Powerful trade unions, rigid bureaucracies, and heavy regulation make them less conducive to entrepreneurship and slower to embrace technological change. The cradle-to-grave welfare state diminishes individual initiative and can breed a pervasive sclerosis. In places, it seems capable of breeding an American-style underclass.
In other words, our respective social contracts each have their advantages but are too ingrained in culture and tradition to imagine trading places. Americans are defined by a history of immigration in pursuit of freedom and opportunity. We are more individualistic, enterprising, and protective of liberties that most Europeans do not expect, such as owning guns, working 70-hour weeks, or appreciating nature as it goes by at 60 mph on a snowmobile. Founded in rebellion against colonial tyranny, our country is naturally suspicious of government intrusion, interference, and snooping. European systems, by comparison, grow out of a tradition of the state providing social benefits for workers that stretches back to Bismarck and Germany in the 1880s. To overgeneralize, Europeans have less suspicion of officialdom, don't view the right to get rich as sacrosanct, and demand stronger social safety nets. Their more homogenous and static societies place a higher premium on equality, security, and stability.
Such historically grounded differences explain why the European model of social democracy would be unlikely to find root here, even if the president favored it. But Obama shows every sign of instinctively resisting paternalistic and overarching public sector authority as much as most Americans do. Though the president's overall vision of government's role remains somewhat foggy, his approach to problem-solving reflects the national urge to rein in government even while one is busy expanding it.
This aversion to state control characterizes Obama's response so far to the financial crisis. When asked in an ABC interview why he didn't nationalize the damn banks already, Obama's telling response was to talk about how our "traditions" are different from European ones. "Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different," he said. "And we want to retain a strong sense of that private capital fulfilling the core investment needs of this country." Note that Obama's global-warming plan is a market-based cap-and-trade system rather than a more straightforward carbon tax or regulatory scheme.
Even in areas where Obama seems to be moving in a more statist direction, there are crucial distinctions. Like most Americans, he believes government should guarantee health insurance. And like most Americans, he believes the system should be privately run. He, and we, may be kidding ourselves in thinking that it's possible to have universal access and cost control without stifling innovation or limiting individual choice. But Obama is going to try to thread the needle. His college plan is for universal access to loans, not the essentially free ride that most students get in the European Union. And he looks poised to pare back Social Security benefits and Medicare spending, in addition to raising taxes, to constrain the overall cost of government. One way to describe Obama's program is a move toward cradle-to-grave opportunity, as opposed to the European model of cradle-to-grave security.
The indictment that Obama wants to foist foreign ways upon us echoes the claim by Roosevelt's critics that he wanted to usher in socialism under cover of the New Deal. It similarly misreads an ideologically moderate president's substantive views, his political sophistication, and what's within the realm of the possible in our country. Obama gets that Americans want government to fix the free market, not take its place.
A version of this article appears in this week's issue of Newsweek.