Thread by @Noahpinion

Why the terms "capitalism" and "socialism" (and "neoliberalism" and "communism" and "social democracy" and "democratic socialism") don't do a good job of describing modern developed economies:

bloomberg.com/opinion/articl…

To opponents of "socialism", the word typically means the Soviet Union, Mao's China, North Korea, or Venezuela.

To defenders of "socialism", it often means Denmark, Sweden, or Norway.

washingtonexaminer.com/news/bernie-sa…

This has led to some bitter battles over whether Scandinavian countries - which almost everyone seems to agree are quite nice - are actually "socialist".

vox.com/2015/10/31/965…

The reason the issue is so confusing is that there are actually multiple ways that the government can intervene to tame and correct markets.

These methods don't necessarily all go together. In fact, they can be substitutes for each other.

In a recent report, J.P. Morgan researcher Michael Cembalest argues that Scandinavia's model is more business-friendly than America's, despite being more "socialist" in other ways.

jpmorgan.com/jpmpdf/1320747…

On many international rankings, Scandinavia DOES score as more business-friendly than the U.S.

Scandinavia's labor markets are more regulated, but - possibly thanks to light regulation and less competition - labor takes home a slightly smaller share of national income there.

But the Scandinavian countries provide more services through the government, their taxes are higher, and their fiscal systems are more progressive.

So are Scandinavian countries "socialist" or "capitalist", compared to the U.S.? It's hard to say.

conversableeconomist.blogspot.com/2018/11/the-sc…

And complicating the picture is the fact that the Scandinavian model has *changed* a lot over the last half century.

voxeu.org/article/rise-a…

There's also the question of whether the systems of Scandinavia, the U.S., Germany, Japan, France, the UK, etc. are even different enough to be labeled different "systems" at all.

Maybe they're all just varieties of capitalism.

people.fas.harvard.edu/~phall/VofCInt…

But one thing seems clear: the terms "socialism" and "capitalism" are no longer very useful when describing the various systems that rich countries have developed in the last 50 years.

We need a new lexicon.

(end)

bloomberg.com/opinion/articl…