FEMALE VOICE: This podcast has been prepared exclusively for institutional, wholesale, professional clients and qualified investors only, as defined by local laws and regulations. Please read other important information, which can be found on the link at the end of the podcast episode.


[Background Music]


MR. MICHAEL CEMBALEST: Good morning and welcome to the Eye On The Market podcast. This one's a travel log. With the first Democratic debates coming up this week, I thought it was a good time to share this analysis.


At the Democratic Party Convention in California earlier this month, the former Governor of Colorado was booed for saying that socialism isn't the answer, and the crowd there has company. Recent surveys of college students in the United States are shown as having a more favorable view of socialism than of capitalism. And when they're asked about some of the failed 20th Century socialistic experiments, the respondents say they're talking about Democratic Socialism instead. 

Okay. Fair enough, but let's take a look at where Democratic socialism is used elsewhere before the United States adopts it and, that's where, of course, it gets murkier because such societies are not that easy to find. Some people point to the Nordic countries as Democratic Socialism in action. 


And just to give you a refresher, the Nordic countries are, for our purposes, Sweden, Finland, Norway, Denmark, and the Netherlands. They have an average population of just about 9 million and a GDP per country that averages about 5-percent of U.S. levels, and are very ethnically homogenous and more closed to immigration than the United States. 


Anyway, while some people point to these Nordic countries as Democratic Socialism in action, the Nordics themselves, many of them disagree with that. The former Prime Minister of Denmark said some people in the United States associate the Nordic model with some kind of socialism. Therefore, I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.


Our models backed him up. While Nordic countries have higher taxes and greater redistribution of wealth than the United States, the Nordics are just as business friendly as the United States, if not more so. And examples include greater business freedoms in the Nordic countries, freer trade, even before the Trump tariffs, more oligopolies where companies have large market share, lower levels of state control over the private sector, and receptivity to foreign direct investment, et cetera, et cetera. 


And so--and as for the tax issue, while the Nordic countries may raise more taxes than the U.S., the gap results from regressive VAT and consumption taxes, and Social Security taxes, and payroll taxes, rather than from having much higher progressive income taxes.


So the bottom line is you can copy the Nordic model, if you like, but understand that it entails a lot of capitalism, a lot of pro-business policies, a lot of taxation on the middle class with respect to their spending and their wages, minimal reliance on corporate taxation, roughly the same as a percentage of overall taxes as the U.S., and plenty of co-pays and deductibles in its healthcare system. For all of the discussion about Nordic healthcare systems, which are excellent, they are quite different from anything related to Medicare for All proposals in the U.S., which do not have co-pays and deductibles.


So with the Nordic countries firmly rooted in capitalism and free markets, if I wanted to find an example of Democratic Socialism in practice, I'd have to look elsewhere. So I broadened my search and I looked for countries that relative to the U.S. are characterized by higher tax rates on corporations and individuals, more government spending, more worker protections restricting the ability of companies to hire and fire both domestic and foreign labor, less flexibility for companies to set wages based on worker productivity, more reliance on regulation, more constraints on real estate development, more antitrust enforcement, more state intervention in product markets, a shift away from a shareholder centric business model, more protections for workers in domestic industries through tariffs, and more constraints on capital inflows and outflows. 


I couldn't find any country that ticked off all of these Democratic Socialist boxes, but I did find one that came close. Argentina, which has defaulted seven times since its independence in 1816, which has seen the largest decline in its standard of living in the world over the last century, and which is on the brink of political and economic chaos again in 2019. 


So that's where my journey ended, halfway around the world from Scandinavia, where it began, and my conclusion is that a real life proof of concept for a successful Democratic socialist society hasn't been really--has not been found yet. 


And again, to reiterate, if you like that Nordic model, understand that it's heavily reliant on middle class taxation, not a lot of corporate taxes, plenty of co-pays and deductibles in healthcare, and a very business friendly private sector.


And so this month's Eye On The Market has some charts and tables that substantiate all of those points. 


FEMALE VOICE: Michael Cembalest’s, Eye On The Market, offers a unique perspective on the economy, current events, markets, and investment portfolios, and is a production of JPMorgan Asset and Wealth Management. Michael Cembalest is the chairman of Market and Investment Strategy for JPMorgan Asset Management, and is one of our most renowned and provocative speakers. 


For more information, please subscribe to the Eye On The Market by contacting your JPMorgan representative. If you'd like to hear more, please explore episodes on iTunes or on our website. This podcast is intended for informational purposes only and is a communication on behalf of JPMorgan Institutional Investments Incorporated. 


Views may not be suitable for all investors and are not intended as personal investment advice or as solicitation or recommendation. Outlooks and past performance are never guarantees of future results. This is not investment research. Please read other important information which can be found at www.jpmorgan.com/disclaimer-eotm.

鉴于2020 年的美国总统大选民主党首场辩论会即将于本周开始,这篇分析可谓正合事宜。在月初召开的加州民主党大会上,前任两届科罗拉多州州长因为宣称「社会主义不是我们的答案」而被公众大喝倒彩。事实上,这次并非单一事件:据近期调查显示,美国大学生赞同社会主义多于资本主义。当被问到二十世纪尝试推行社会主义却遭遇滑铁卢时,受访者坚称他们所指的是「民主」社会主义。这种说法确实不无道理,但是在全球最大的经济体实行民主社会主义之前,让我们先了解在民主社会主义在世界其他地方的运作方式吧。可惜的是,民主社会主义的运作并非一目了然:奉行民主社会主义的国家世上难寻。


总结:如果您愿意,您也可以效仿北欧模式,但您要明白,这个模式需要推行「大量」资本主义和亲商政策, 对中产阶级的支出和工资征收「庞大」税项,对企业税收的依赖程度极低,以及医保体系中病患者需要共同承担高昂医疗费用和免赔额。



谁在为北欧国家的社会福利项目埋单? 每一个人,尤其是中产阶级



  • 个人和企业税率较高,政府开支较高
  • 限制公司雇用和解雇能力的工人保护措施更多,公司根据工人生产率设定工资及/或雇用外国劳工的灵活性较小
  • 更加依赖监管法规,对开发房地产市场设有更多限制,更多反垄断执法情况,国家对产品市场施加更多干预;而且偏离了以股东为中心的商业模式
  • 通过征收关税和实施非关税壁垒给予工人和国内产业更多保护,对资本流入和流出设置更多限制