You wake up a Dane. As a student of political economy you know you live in a capitalist country: private individuals have been assigned the right to exclude people from the factories, real estate, etc., that make life possible — unless they pay up. You notice, however, that this does not neatly characterize every part of your life. When you flip on the light in your cooperatively owned apartment building you draw power from a cooperatively-owned electric grid. You wash the produce you bought at a cooperatively-owned grocery store with water provided by your cooperatively-owned water system. Whole sectors — education and healthcare — are generally operated by the state.

These exceptions were built by people who objected to the power capitalists had over their lives and wanted an alternative. Because of their successes, Danish institutions look very different from the typical arrangement in other capitalist countries.

This vignette — a semi-capitalist, semi-socialist morning in Denmark — introduces Pelle Dragsted’s Nordic Socialism. As the spokesperson of the Red-Green Alliance in the Danish parliament or Folketing, Dragsted has to reckon with the legacy of Nordic social democracy. The predecessors of his party criticized the social democratic project as insufficient. Today, the party finds itself defending the remnants of social democracy in the wake of retreating social democrats and continued neoliberal offensives. Dragsted’s book proposes a synthesis between social democratic reform and calls for a revolutionary break with capitalism: a path to socialism through expansion and reform of democratic institutions.

Neither Copenhagen Nor Moscow

The failure of social democracy, Dragsted suggests, was rooted in the idea that a break with capitalism through a comprehensive challenge to private ownership was impossible — and unnecessary. The social-democratic alternative hinged on the insight that ownership is a collection of privileges associated with control of a given asset: the rights, for instance, to negotiate what workers must pay for access, to lease, sell, move, repurpose, pollute or otherwise harm third parties through use of the asset, or to require users to follow specific work rules. Together, these rights form a dictatorship of capital owners in what Dragsted calls the “undemocratic” portion of the economy, a concern for both social democrats and forces to their left.

Elimination of private ownership, however, struck social democrats as daunting, and it seemed possible to achieve their goals without doing so. Instead of taking various functions out of private ownership, the scope of discretion allowed to owners could be curtailed by the state, organized labor, or civil society. For instance, a core right of owners is the right to set wages for workers using their assets, but in modern economies this right is almost never unrestricted. In the United States, owners may not set wages below a given minimum. In the Nordic countries, the power of organized labor, bargaining on a sectoral level, constrains the wages employers may offer. The insight that the discretionary rights of owners to pay low wages, pollute, charge high rents, etc., could be limited seemed to offer a solution to private economic dictatorships without a risky adventure into a break with capitalism.

The electoral success of Nordic social democracy in its golden age gave social democrats the opportunity to implement this vision of “functional socialism.” These accomplishments were significant: the construction of the most egalitarian economies in the developed world. In the neoliberal era, however, many of these gains have been rolled back and inequality has grown. The rights stripped from owners could be restored and the owners, as a class, had a strong incentive to organize for their restoration. Their intermediate position proved to be unsustainable.

For better or worse, Nordic social democrats have a long record in government. What Dragsted calls the revolutionary Left — communists and socialists to the left of the social democratic parties — are free to imagine how much better things would have gone had they been in charge. Failure to take power is, however, hardly a recommendation for a political movement, and Dragsted wants an explanation of why their radical vision failed to win support.

In the Nordic countries these parties came to accept a parliamentary path to power. They were revolutionary, Dragsted says, in the sense of demanding a total change in the social system from capitalism to socialism: an end to private ownership and market mechanisms. Dragsted concludes that the public is reluctant to make this leap into the unknown — that uncertainty about the ultimate outcome would have to be weighed against the certainty that the transition would be chaotic as capital attempts to flee, the economy rebalances to reflect new priorities, and enemies of the transition mobilize against it. Certain risks for uncertain rewards proved an unattractive alternative to social democracy or neoliberalism.

In Dragsted’s framing, both social democracy and its left-wing opponents believed an economy or society is either socialist or capitalist. Fear of the imagined gulf between these systems leaves us stranded on the wrong side, fuming or rationalizing our disappointment. Nordic Socialism is Dragsted’s attempt to build a bridge, based on the idea that economies are a mix of institutional forms: capitalist in some sectors and enterprises and socialist or communally-owned in others, and that the goal of socialists should be to expand the socialist portion of the economy. This means socialists can reference existing institutions as proof that it is possible to run larger portions of the economy on a democratic basis.

Morning in America

I wake up in my apartment in a U.S. college town. Unlike Dragsted’s drowsy Dane, I don’t live in cooperatively-owned housing or shop in a cooperatively owned grocery store. But there are still parts of my life that belong to what Dragsted would call the democratic sector of the economy. My electricity, waste management, and water service are all provided by my municipality. As I commute to work I stop for gas at a gas station owned by a farmer’s cooperative. I pay for gas using a debit card provided by my credit union. The gas station is outside the city limits, so it gets electricity from a rural electric cooperative. If I get into an accident on the way my car is insured by an insurance mutual and I would get medical care at a publicly-owned hospital.

How excited should I be by this situation, relative to the historic ambitions of the socialist movement?

These institutions participate in marketplaces where the terms of engagement are set by privately-run, profit-seeking corporations, reducing their ability to consider factors other than their bottom lines, as their employees and customers can testify. They are sometimes democratic in name only. I am a voting member of my credit union and insurance mutual, but this right is obviously not meant to be exercised. Municipally-owned enterprises are controlled by democratically elected officials, but layers of boards and management insulate them from public opinion.

My county hospital provides a funny example: the elected board does not, strictly speaking, run the hospital. Instead they appoint themselves and a majority of unelected members to the board of a non-profit which they then contract with to run the hospital. This structure, they maintain, exempts the board from public records and open meeting laws. Their excuse for doing so is that disclosure would give their competitors an unfair advantage (their chief competitor: another publicly-owned hospital). Even overwhelming local dominance of the public sector does not exempt these entities from competitive pressure.

Nor do these entities necessarily behave better when they exercise political influence. Credit unions cleave themselves from the banking lobby when it attacks their special tax treatment but ally themselves on other issues, fighting, for instance, to protect their right to charge high fees on credit card transactions. Electric cooperatives with legacy investments in fossil fuel plants are opponents of clean energy regulation.

Socialism in 3-5 Countries

Dragsted would agree that this does not add up to much — his point is that some societies are more socialist than others, with the contrast between the United States and the Nordic economies as his go-to example. The book is not conciliatory or conservative. Even in the Danish context Dragsted sees that cooperative and public sector bodies need to become more vital and democratic in parallel with efforts to expand their scope across the economy.

Unreformed and limited as these existing institutions are, DSA chapters across the country fight against privatization and for municipalization and other expansions of the private sector. We apparently think that these institutions have value. Dragsted provides a framework for thinking about how these campaigns — for public utilities, for Medicare for All, or for universal pre-K — relate to our long-term goal.

Nordic Socialism draws from the Danish and broader Nordic experience, but there’s no reason these principles cannot apply away from the shores of the Baltic and the North Sea. The book is in conversations with U.S. socialists, including politicians like Bernie Sanders and policy thinkers like Matt Bruenig, who contributed the book’s English-language forward and has apparently been influential in Dragsted’s framing of the Nordic experience.

We have further to go to reach the Nordic status quo — much less Dragsted’s more ambitious vision. A path forward in the United States will need to be based on a realistic assessment of the country’s less generous endowment of democratic institutions, but there are few Danish institutions that are unprecedented in the United States Communities across the United States tried to build alternatives to unrestrained capitalism, from tiny cooperatives and municipal utilities to the New York Power or Tennessee Valley Authority. In the United States and around the world, socialists have struggled to provide a sense of what socialism will mean in practice. Dragsted suggests we can do so by drawing on this legacy.