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I first encountered the concept of “Nordic Socialism” in the fall of 2018. Sitting in my office at Christiansborg, the home of the Danish parliament, I stumbled on a report that had just been published by the first administration of Donald Trump.
Pelle Dragsted is an MP and the political spokesperson for the Danish Red-Green Alliance.
The report was a warning to Americans against the openly declared democratic socialists within the Democratic Party — Bernie Sanders, Alexandria Ocasio-Cortez, and others — and more broadly against a new generation of activists who identified Denmark and the other Nordic countries as an inspiration for their version of democratic socialism. One of the report’s sections, titled “Nordic Socialism”, aimed to prove that Nordic economies were both inefficient and hostile to freedom, and that we Nordics are less well-off and must put up with higher taxes and prices.
A few months earlier, Fox Business Network host Trish Regan had also castigated Denmark in a segment on the contagion of socialism. According to Regan, Denmark’s high taxes and support for the unemployed and students discouraged people from working or from completing their studies, since they would rather open cupcake cafés. “This is the reality of socialism”, she said, rolling her eyes.
Both the White House report and Regan’s Fox Business segment were filled with factual errors regarding the Danish economy, and their arguments were met with dismissal from across the whole of the Danish political spectrum. Danes were particularly incensed with the suggestion that the Nordic welfare society has anything at all to do with socialism. “Completely absurd”, declared then-Liberal Alliance foreign minister Anders Samuelsen, while Venstre finance minister Kristian Jensen described such talk as “idiotic”. The Social Democrats and their allies on the Left, for their part, also acknowledged that Denmark was indeed a capitalist, free market economy. We have our welfare systems, surely enough. But socialism? Not at all.
Trump Was Right About One Thing
I contend that Trump, Regan, and the American Right are actually correct when they call the Nordic countries socialist, or at least more correct than previously acknowledged. Furthermore, our inability to recognize the socialist characteristics of our economy in part explains why it seems so difficult to imagine, describe, and argue for a persuasive and realistic alternative to the capitalist economy.
It is self-evident that the economies of Denmark and the other Nordic countries are not entirely socialist — far from it. But is not the opposite assertion — that they are entirely capitalist — just as absurd and idiotic?
The Danish encyclopaedia defines capitalism as an economic system based on wage labour in which “the production of goods and services are characterized by an arrangement according to which the means of production, capital — for example land, raw materials and machines —as well as the products themselves, are owned by capitalists, who produce for a market in competition with other capitalists”. According to this definition, large parts of the Danish economy can hardly be considered purely capitalist: our public sector makes up fully a quarter of our economy. Here the means of production — hospitals, schools, roads, railways, preschools, nursing homes, libraries — are owned and managed by democratically chosen organs, whether at the national, regional, or municipal level — that is to say, indirectly by the whole of the citizenry.
Nearly a third of us are employed in these democratically governed sectors that do not produce for the market. Our debit cards can remain in our wallets when we go to the hospital, the preschool, or the nursing home. The benefits are funded through a solidaristic tax system; each of us contributes a part of our income to a common fund that pays for the salaries of public employees and other expenses, which in turn permits us to receive equal access to the benefits of a welfare society — free health care, education, and other services. These characteristics of the Danish system stand in sharp contrast to the Danish encyclopaedia’s definition of a capitalist market economy.
Dissatisfaction with the present is not in itself enough to provoke change — there must also be an alternative perceived as both possible and realistic. But socialists have plainly been unable to persuade a majority that it is possible to create a new, more just economy and society.
Moreover, this democratic ownership model, according to which the means of production are owned in common rather than by a small group of capitalists, is hardly limited to the public sector in Denmark. Large pockets of democratic ownership are also found in the private sector, where groups of citizens own and manage enterprises. Our second-largest grocery chain, Coop, is a cooperative owned by some 1.8 million members. These members elect the 3,000 local steering committee members and the upper management. No capitalist profits from our consumption, because we ourselves are the owners.
In our utility sector, democratic ownership is more the rule than the exception. Our electricity, water, and heating are produced and dispensed predominantly by cooperatives that we ourselves own. Surpluses from these enterprises do not go to the owners of capital but are either returned to the customers or reinvested for their benefit. Here, too, the customers themselves choose the leadership and exert direct influence through our local housing associations.
Even our much-maligned financial sector has a strongly democratic and non-capitalist component. We have cooperative banks owned and overseen by the customers. Our largest mortgage lender, Nykredit, is owned by a collective constituted by all the borrowers of Nykredit and Totalkredit. We have a wide variety of mutual insurance funds owned by policyholders. And our democratic pension funds manage billions in capital, securing returns for wage and salary workers.
There are many challenges facing our democratically managed enterprises. In the public sector, citizens do not exert much real influence, and in the private sector, the role of members has been reduced owing to centralization. But these enterprises that make up these sectors are still fundamentally distinct from capitalist ones because their goal is not to earn money for absentee shareholders.
The situation is the same in the other Nordic countries. In Norway, Sweden, and Finland, the state owns critical enterprises and controls a significant portion of investment capital. And like Denmark they share a long tradition of democratic cooperatives. Are these public and private democratically managed enterprises really just a part of capitalism, even though they are definitionally opposed to the idea of it? Or are they defined more by socialist ideas of collective ownership and democratic administration?
Not according to modern social democrats, who understand socialism as state ownership and planned economy as in the Soviet Union, nor to the revolutionary leftists, who argue that even if more democratic enterprises exist, they are subordinated to the capitalist economy and have nothing to do with socialism because socialism can only happen after the existing capitalist economy has been overthrown. Both social democrats and the revolutionary Left alike thus view capitalism as a totalizing and all encompassing system that structures our entire economy. Nothing is outside of it. All is capitalism.
I believe that it is precisely this binary conception of capitalism as all encompassing and socialism as a utopian project of the future that has long handicapped the efforts of the Left to create a more solidaristic and economically just society. The way we have formulated our task has precluded its fulfilment.
Imagining a World Beyond Capitalism
“It is easier to imagine the end of the world than the end of capitalism”, philosopher Slavoj Žižek noted in frustration over the fact that despite rising discontent with the capitalist economy and its human and environmental consequences, the Left has been unable to develop a convincing strategy for a way toward a non-capitalist society.
He has a point: we find ourselves in the midst of a historical rupture in which more and more people are critical of the consequences of the capitalist economy, among them steeply climbing inequality between elite and masses, periodic economic crises that throw millions out of work, the gradual undermining of the welfare society and of the economic security built up by the generations before us, the erosion of safe working conditions, and not least the climate crisis that threatens our continued existence on the globe.
In the wake of the financial crisis of 2008, powerful new opposition movements emerged, from the 15M movement that saw the occupation of public squares by young activists in Southern Europe to Occupy Wall Street, Black Lives Matter, and the climate movement that under the slogan “System Change, Not Climate Change” has taken to the streets from Sydney to Berlin. There is desire for change, and hope has been awakened that we can create a world in which people are more equal, free, and secure and in which we can live in harmony with nature and one another.
Opinion polling reveals rising opposition to capitalism. One poll from 2015 showed that 65 percent of British citizens regard capitalism as unjust. In Germany no less than 77 percent are sceptical of it. Among young Americans between 18 and 29, attitudes toward socialism are now more favourable than toward capitalism. Yet despite rising discontent and growing doubts about our dominant economic model, despite the desire for change, the Left has up to now failed to procure support for an alternative to capitalism from a majority of the population. There have been local victories and support for alternatives has grown, but nowhere has the neoliberal status quo been challenged in earnest.
All through capitalism’s history, people have succeeded in banding together and creating alternatives that defy its narrow division of power and ownership. The fact is that we have already taken steps towards a more democratic economy and therefore are closer to socialism than we had believed.
The question is why. I believe that the main reason is that the majority of people have difficulty believing in a better alternative. Dissatisfaction with the present is not in itself enough to provoke change — there must also be an alternative perceived as both possible and realistic. But socialists have plainly been unable to persuade a majority that it is possible to create a new, more just economy and society. That social democrats now embrace a politics largely identical to that of the Right has bolstered the impression that there is in fact no alternative to existing capitalism.
Moreover, farleft calls for the overthrow of capitalism or a socialist seizure of state power are viewed by the majority as unworkable, unrealistic, or perhaps even a little frightening, since they associate socialist ideas with the command economies of the Eastern European past. In his book Capitalist Realism, British activist and author Mark Fisher describes just such a reality, the wholesale acceptance of the idea that “not only is capitalism the only viable political and economic system, but also that it is now impossible even to imagine a coherent alternative to it”.
I cannot begin to count the times, whether during political meetings or in social media debates or in conversations on the train or bus or in the supermarket, I have been struck by the scepticism towards the idea that there is an alternative to capitalism. I have met so many people, young and old and from all layers of society, who evince a burning discontent with what the world has become and yet have difficulty imagining that it is possible to arrange society and the economy in a more just and democratic manner.
My suggestion is that our inability to imagine alternatives to capitalism and to articulate concrete ideas that are perceived to be realistic and attractive is largely the result of two factors: our aforementioned blindness to the seeds of socialism that already exists in our society and the conception of capitalism as an all encompassing system marking the end of history. In my view it is especially the latter point that has, on the one hand, led social democrats to surrender to capitalist realism, and on the other, kept the Left entranced by the utopian vision of socialism as revolution.
Socialism Is Here
But what if capitalism is not so powerful and so extensive? All through its history, after all, people have succeeded in banding together and creating alternatives that defy its narrow division of power and ownership. The fact is that we have already taken steps towards a more democratic economy and therefore are closer to socialism than we had believed.
What if instead of cramming all sorts of widely diverging social and economic phenomena into a box we call capitalism, we acknowledge that capitalism is not the sum of our economy, that it has always shared the scene with more democratic and socialistic forms of ownership and distribution, and that Trump is actually right when he asserts that the Nordic economies are characterized by strong socialist tendencies?
This acknowledgment is important precisely because understanding our economy as a hybrid of many different modes of production provides us, as this book demonstrates, with new and better ways to think about and argue for social change.
Firstly, this understanding concretely grounds socialism in the reality we know and in the social progress we have already instituted. By identifying and acknowledging the areas of our economy and society that already are non-capitalist, we can see that socialism is not a utopian vision of the future but already here.
Secondly, it also frees us from the binary choice between a more or less regulated capitalism and a complete and all-encompassing overthrow of the existing economic system — a strategy that has never succeeded in all of history. Instead of viewing economies and societies as either capitalist or socialist, we can instead view them as more or less capitalistic and more or less socialistic. This opens the possibility of gradually rendering our society more socialistic and less capitalistic by expanding the areas of the economy that are democratically owned and managed and by reducing the scope and the influence of the market economy — not as a sudden rupture but as a gradual transformation.
The Nordic Experience
The acknowledgment that capitalism is not all-encompassing is especially relevant in Denmark and the other Nordic countries. This is why I suggest we embrace Trump’s concept of Nordic socialism, that we make it our own, that we turn it into a signifier of a new, modern, and democratic socialism, inspired by our own experience with socialist ideas that have demonstrated their worthiness throughout our history.
This is evident in our welfare society, which demonstrates every day that we can democratically manage important parts of the economy without anyone profiting from them. We have chosen to make vital sectors such as health care, education, and childcare part of a communal rather than market economy, where in good socialist fashion we contribute according to ability and receive according to need.
It is also apparent from the many successes of our cooperative movement. Small farmers established their own dairies and slaughterhouses to ensure that they rather than landowners or merchants profit from their labour. Citizens worked together to found locally and community-owned waterworks, consumer cooperatives, and savings banks. Our public cooperative housing sector guarantees that it is not the size of your wallet that determines whether you have a view of the sea.
It is further evident in our strong labour movement, in which wage earners organize because they understand they are the foundation of our prosperity and thus should have much more say in their working lives and a much larger share of the wealth they create — as well as in our folk high schools, our independent schools, libraries, and all the other civil society associations.
There will always be regression, conflict, and tests of strength as well as progress, in part because the emergence of a more democratic economy will surely be met with resistance from the economic elites that enjoy the privileges of the capitalist economy’s uneven distribution of wealth and power.
In short, our experience with socialist ideas is attested in all the places we as citizens work together to create value not in order to make a few rich and powerful but to be stronger and freer together. It is within this tradition that we will find the ideas and inspiration for a new democratic socialism. Not in the Soviet Union’s kolkhozes (the collective farms established after the Russian Revolution) but in the democratic associations of the cooperative movement. Not in the utopian designs of a perfect future society but in the lived and proven experience of our own history. Not in Lenin and Mao but rather in Borgbjerg and Branting.
In their attempts to defend the inequality and unsustainability of the capitalist system, the Right always poses the question “Where has socialism ever worked?” “Right here”, should be our answer, “in the Nordic countries” where the forces of our democratic enterprises and welfare society, rather than those of the market and the narrow interests of capital, set much of the agenda. This is our point of departure, our building block. And the reason to believe we can create a new and more democratic economy — a Nordic socialism.
To speak of a specifically “Nordic” socialism is not to say that our ideas and experiences cannot be employed in other parts of the world. It is hardly coincidental that many of the new progressive movements and democratic socialist organizations around the world point to the Nordic countries as a source of inspiration for a more just society. But Nordic societies have not developed in isolation from the surrounding world, and the ideas that underpin both the labour and cooperative movements as well as the welfare society have been constantly influenced by those from abroad. I am not therefore advancing a kind of Nordic essentialism but only acknowledging that our part of the world has made important contributions to the democratization of the economy — contributions that socialists around the world can learn from and build on.
Building a Pluralistic Socialist Economy
By acknowledging that societies and economies are always hybrids, we can see that we need not choose between free market capitalism and a planned state socialism. Between these two extremes are a wide range of mixed alternatives, and just as capitalism is dominant but not all-encompassing today, so could socialism be in the future.
In my mind, this way of conceiving social change is emancipatory, since it allows us to dismiss comprehensive visions of an ideal social order that can contain the seed of totalitarianism, insofar as the effort to realize a specific blueprint can force the entirety of society into a single economic model. Moreover, it encourages a more pluralistic vision of a socialist economy that supports different forms of ownership and does not force us to choose between a market economy or democratic planning.
How we can widen and deepen the democratic forms of ownership already known to us from our cooperative movement and public sector? How we can further democratize ownership in the form of employee funds that ensure co-ownership for wage earners and in a national wealth fund that distributes a part of the profits of capital among the whole population? How we can change the balance of power in our private enterprises so that those who labour also decide? And how we can create an economy in which we employ market mechanisms in those areas where they are beneficial and support an efficient and sustainable economy yet permit democratic decision-making to determine the framework, the rules, and the overarching goals?
The concept of a specifically Nordic socialism that I propose thus emphasizes how socialism is anchored in our previous experience with democratic enterprise, how it builds further on these experiences, and how distant it is from the countries that have historically called themselves socialist. It is pluralistic insofar as it rejects black-and-white distinctions between the state and civil society or the market and democracy but recognizes that the complexity of society and the multifaceted nature of human beings demand complex and multifaceted solutions. It is oriented towards civil society, sceptical of centralization, bureaucracy, and growing state power, and predicated on the idea that the democratic engagement of ordinary people at all levels of society is a precondition for socialist development. Most importantly, it is a democratic socialism, anchored in Nordic democratic governance with stable institutions, a strong civil society, and the protection of individual freedoms.
It is a socialism that rejects any hint of totalitarian pretence to the violent overthrow of society or to authoritarian rule, but is still an ambitious socialism that consciously and progressively works to replace the existing capitalist economy with a socialist alternative that centres democratic management and collective ownership, that does not accept the idea that the economy and our working lives are not entitled to the same freedoms and democracy as is the rest of society, and that recognizes that as long as the ownership of banks, corporations, land, and data remains as concentrated as it is today, economic elites will be able to exercise what I later will define as oligarchic power, which undermines and hollows out democratic governance.
The idea of the gradual development of a more socialist economy rooted in our prior experiences with democratic planning and collective ownership is not based on a naive understanding of social change as a harmonious and frictionless process. The development of society is never linear. There will always be regression, conflict, and tests of strength as well as progress, in part because the emergence of a more democratic economy will surely be met with resistance from the economic elites that enjoy the privileges of the capitalist economy’s uneven distribution of wealth and power. Just as the generations that fought to replace monarchical power with parliamentary democracy were met with derision and resistance, their ideas labelled utopian, unrealistic, and radical, so will our generation encounter the same opposition as we work to make the principle of self-government applicable to the economic sphere. We will be told that it cannot be done, that the existing economy is the end of history. That there is no alternative.
The Need for a Real Alternative
The story we have been told about the eternal nature of capitalism and the impossibility of alternatives is the most critical ideological foundation of today’s capitalist economy. It is why we still accept an economic system that distributes the fruits of our labour so narrowly, that gives so much economic and political power to so few, despite the fact that no one has voted for them, that separates the economic sphere and the whole of working life from the democratic principles that apply to the rest of society, and that is on a direct collision course with the natural world. It is because we have bought the line that history is over.
But history is never over. No system is eternal. In our own history we have shown that when people band together we can change our society and our life conditions. It was through such collective action that we created our political democracy as well as our welfare society after the crisis of the 1930s.
It is critical to provide a socialist alternative that can inspire enthusiasm, hope, and dreams and yet that is also realistic, persuasive, and concrete, because it builds on the socialist elements in our existing society.
The capitalist economy is once again in crisis. Growth has slowed, and what growth there is benefits only a tiny elite at the top, while the majority receives less and less. Economic contraction is socially regressive, as every economic slowdown results in new cuts to the welfare society for which generations before us struggled. This further leads to discontent, feelings of powerlessness, and suspicion of the political system. Now, it threatens even the democratic system and the freedoms we take for granted. The experience of an economic system that does not work for the majority engenders apathy and disillusion, and is powerful fodder for authoritarian political figures like Donald Trump, Matteo Salvini, and Viktor Orbán.
But fortunately, right-wing populism is not the only response to political mistrust. In Southern Europe, new social movements and political parties have been established and begun to acquire influence. Across the world we witness youth movements such as Fridays for Future and the Gen Z protests demanding radical change. And New York City, of all places, recently elected a democratic Socialist as mayor.
While none of these newer formations have managed to take power, it is clear that socialist ideas have immense drawing power, that people want something more than market competition that only makes the rich richer and everyone else more precarious, that there is growing faith in the possibility that we can make change and create a society in which the people in collaboration set the agenda rather than the blind forces of the market.
In other words, we find ourselves at a crossroads. The current political breakdown could lead in several directions. Either it could permit the triumph of antiliberal and authoritarian forces through the promise of strong leadership and the scapegoating of ethnic and sexual minorities, or it could foster the birth of a new Left that overcomes its impotence and begins to transform the economy and society. This is why it is critical to provide a socialist alternative that can inspire enthusiasm, hope, and dreams and yet that is also realistic, persuasive, and concrete, because it builds on the socialist elements in our existing society. We must not proffer slogans but provide substantive answers to the difficult questions that the development of a more democratic and sustainable economy will raise. Nordic socialism does just that.
This article is based on an excerpt from the book Nordic Socialism: The Path Toward a Democratic Economy (University of Wisconsin Press, 2025).
