Democratic Socialists have presented Denmark as the elusive nation where socialism has been successful, and thus a model for the policies they would implement in the United States. Bernie Sanders regularly invoked Denmark during the 2016 presidential campaign, and Alexandra Ocasio-Cortez reassured 60 Minutes viewers that her version of democratic socialism would veer more toward Denmark than Venezuela. Just weeks ago a free-market think tank in Denmark, the Center for Political Studies (CEPOS), issued a 20-page report telling Americans that 1) Denmark is not a socialist nation; and 2) statist policies have still caused significant economic harm.

Denmark is not socialist

The 20-page report notes that, by some measures, Denmark and the Nordic “socialist” countries have more economic freedom than the United States:

The Fraser Institute’s Economic Freedom of the World index ranks Denmark 16th (out of 162 countries). According to the Heritage Foundation’s Index of Economic Freedom, Denmark (ranked 12th out of 180 countries) ranks higher than the US (18th). Denmark generally ranks high on regulation, protection of private property, fighting corruption, flexibility of the labor market and trade, but ranks low on taxes and public spending, which are very high in Denmark compared to other countries.

“The high level of economic freedom is an explanation for the relatively high level of income in Denmark, in spite of the high level of taxes and the big welfare state,” the report states.

The report’s authors – Mads Lundby Hansen, Carl-Christian Heiberg, and Thomas Due Bostrup – show Denmark following the familiar pattern of its fellow Nordic countries: It became a wealthy country before introducing an ever-expanding welfare state in the postwar era. But after reaching an economic breaking point in the 1970s, successive governments introduced a mixture of reforms – including reduced benefits, partial privatization of pensions, and lower regulation – that have restored its economic fortunes.

But if Sanders and AOC overstate the extent of Denmark’s economic interventionism, CEPOS adds, then the White House understates the economic pain.

Squeezing the poor and middle class

The White House’s Council of Economic Advisors explored “The Opportunity Costs of Socialism” last October. “Reading the report, one could easily get the impression that taxes in Denmark are only slightly higher than in the US,” CEPOS authors state.

In fact, taxes are much higher in Denmark – especially on the poor and middle class. The government confiscates more than half of virtually all incomes. Low-income Danes pay an effective marginal tax rate of 56 percent; the middle class pay 57 percent.