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The recent New York primary win by Democrat Zohran Mamdani, a self-proclaimed socialist, raises the question that has been simmering for years: Is America ready for socialism?
Our nationwide survey of 2,067 college and university students across the U.S. suggests the answer starts with another question: What constitutes socialism? Only 34% of students define socialism as state ownership and central planning, the classic definition. Almost half instead define it as active government and redistribution, and many admit they are unsure. This confusion shapes how people talk about socialism and why it polls well with young voters.
Politicians have helped blur the lines by pointing to places such as Nordic countries like Sweden as models of “democratic socialism,” claiming they are successful models of what it could look like in the U.S. But Sweden is not a socialist economy. The policies endorsed by Vermont Independent Sen. Bernie Sanders, New York Democrat Rep. Alexandria Ocasio-Cortez, Mamdani and others — like implementing a wealth tax, increasing inheritance taxes, corporate taxes and income taxes to pay for a large welfare state — are not the policies of Sweden. It is a market-based system with high taxes that fund a generous welfare state.
While the tax burden for individuals is relatively high in Sweden, the Swedish government notes that its welfare system is built on the principle that everyone pays, not just the rich. The top marginal income tax rate is higher in Sweden than in the U.S. But these higher taxes aren’t just being paid by the rich in Sweden. The top rate applies to everyone earning barely above the national average in Sweden, compared to the U.S. where the highest rate is paid by those earning 800% higher than the national average.
Moreover, Sweden imposes a 25% consumption tax on goods and services, versus state and local sales taxes in the U.S. that average 7.7%. Sweden also has no wealth tax, no inheritance tax and a lower corporate tax rate than in the U.S.
Sweden learned the hard way what happens when it moved toward the kind of policies advocated for by “democratic socialists.” As highlighted by Johan Norberg and others, for almost 100 years, the country had a small government and an open economy until the country experimented with socialism in the ’70s and ’80s. During that time, they expanded the size of government, increased income taxes, introduced a wealth tax and an inheritance tax. Iconic companies like IKEA left the country, growth stalled and the country experienced a financial crisis that forced major reforms in the early 1990s. Today, Sweden is one of the most economically free countries in the world.
So, what do young Americans want? When we asked students whether they are in favor of universal healthcare and free higher education, 78% said yes if it is funded by a wealth tax on the top 1%. Seventy-one percent said yes if funded by higher income taxes on the top 10%. When asked whether they were in favor of these things if funded by a universal consumption tax, support dropped to half. When funded by a higher income tax on most people, only 38% were in favor. Clearly, college students (and presumably other Americans who are in favor of these things) are much more in favor of a larger welfare state if somebody else foots the bill.
History and economics show that the systems built on ever-expanding government eventually hit a wall. As the late British Prime Minister Margaret Thatcher famously said, “The problem with socialism is that you eventually run out of other people’s money.”
Before America decides it is ready for socialism, it’s clear we need to get educated on what it actually means and what it really costs. Only then can we truly debate whether socialism is “a commitment to dignity,” as Mamdani says, or whether it is a prescription for ruin.
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