Is America Ready for Nordic Capitalism

Philip Kotler

p-kotler@kellogg.northwestern.edu

Most countries in the world run a Capitalist economy. Yet the form that Capitalism takes in different countries varies greatly. There are many differences between American Capitalism, Swedish Capitalism, Japanese Capitalism, and Chinese Capitalism.

Every Capitalist economy has its own set of problems. One needs to list the problems that keep that country’s citizens from being fully productive, happy and healthy. Table 1 lists the major problems besetting American Capitalism.

Table 1. Problems Besetting American Capitalism

• Persistence of poverty.

• Many workers earn less than a livable wage.

• Growing inequality between the working class and the rich.

• A health care system twice as expensive as good systems in other countries.

• A college education means accepting a substantial debt load.

• High and rising food and rent costs facing the working class.

• Racial, ethnic and gender discrimination in businesses and housing.

• More people in prison than in any other country.

• The rich own most of the politicians in both parties.

• The U.S. spends much money on defense and not enough on infrastructure.

• Social assistance programs are insufficient.

Source: For more, see Philip Kotler, Confronting Capitalism: Real Solutions for a Troubled Economic System, New York, New York, AMACOM, 2015.

I hope that you will join me in considering the following six questions:

1. Why do the Major Problems Persist in American Capitalism?

2. What is American Capitalism Really Like?

3. What is Nordic Capitalism and Its Major Benefits?

4. How to Move in American Capitalism into Nordic Capitalism?

5. What Measures Can Be Taken to Reduce Income Inequality?

6. What Conclusions Can We Draw?

Why Do the Major Problems Persist in American Capitalism?

There are at least four reasons why the members of Congress and U.S. Presidents do not take effective actions to mitigate one or more of these problems.

First, workers would be the first to press for solutions of these problems but they are powerless. Following World War 2, the nation experienced many trade union strikes. The AFL and CIO were strong unions and succeeded in pressuring corporations to give higher wages, needed medical benefits, and better working conditions. Management, instead of seeing these benefits as investments that would increase worker satisfaction and loyalty, saw these benefits as a cost that reduced company’s earnings. This led businesses, with the help of wealthy families, to press Congress for new laws to reduce the power of trade unions. Congress passed the Taft-Hartley law in 1947, restricting the activities and power of labor unions. Taft-Hartley amended the 1935 National Labor Relations Act (NLRA), and prohibited unions from engaging in several “unfair labor practices” such as jurisdictional strikes, wildcat strikes, solidarity or political strikes, secondary boycotts, secondary and mass picketing, closed shops, and monetary donations by unions to federal political campaigns. NLRA permitted states to pass right-to-work laws banning union shops. The result: Workers lost their trade union voice in influencing companies and the economy

Secondly, conservatives have been shouting down progressive measures as Socialism. For years, America had a Socialist Party and a Communist Party, both initially inspired by the 1917 Russian Revolution that replaced Czarist Russia with Communist leadership favoring the rights of workers. Eugene V. Debs led The Socialist party in America and he ran five times for the American Presidency, captivating large crowds, but always lost. Republicans continued to warn Americans against Debs and Socialism. They charged that Socialism would destroy Capitalism, “the engine that produces America’s great economic growth”. Conservatives warned that there would be fewer businesses, fewer jobs, more unemployment, falling income, less philanthropy, and less long term investment in infrastructure. “Everyone would be poorer.” It is reminiscent of Winston Churchill statement: “The inherent vice of Capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.”

Today, the Trump administration labels every progressive proposal as socialism. Trump charge that the Democrats will “demolish” the American Dream. “Violent anarchists” will take over America. Joe Biden will destroy America and turn it into a Venezuela on steroids.

Third, defenders of American Capitalism always describe it as raising the standard of living of all Americans. The expressions include “all boats rise” with Capitalism, and “Everyone has the opportunity to become rich.” The rhetoric reads:

• The wealthy create jobs; and wealth will “trickle down” to the workers.

• Do not raise wages; this will kill jobs.

• Do not raise taxes on the wealthy; this will kill jobs.

Moreover, look at all the new products and appliances coming out of capitalism. Life is getting better. Why rock the boat?

However, here is a cartoon of the rising boat.

The persons in the boat fall into two groups: those who are working hard to save the boat from going down and others who are not perturbed at all.

Many critics observe that Capitalism is not broken: it has been highjacked by the superrich. We need a better distribution of the wealth created by Capitalism. Look in Table 2 for information on the great gap between the rich and the poor in American Capitalism.

Table 2. The Distribution of American Income and Wealth

• Capitalism has produced a lot of wealth but it is poorly distributed.

• 13% of Americans live below the poverty level.

• 40% of Americans are living paycheck to paycheck and many borrow money from a payday firm after getting their check.

• 40% of U.S. adults don’t have enough cash to meet a $400 emergency expense. (U.S. Federal Reserve)

• 29% of older Americans have neither a pension nor savings upon retiring. (U.S. GAO)

• Many new jobs are gig jobs without social security, health coverage, or pensions

• Most college graduates are drowning in debt and many are unemployed.

• Not since the Roaring Twenties has income and wealth concentration been so high. Oxfam estimates these conditions in the world today.

• The richest three Americans hold more wealth than the bottom 50% of the country.

• In 2018, the world’s richest 2,200 billionaires saw a 12% increase in wealth, while the world is poorest half saw an 11% drop in wealth.

• The American economist Joseph Stiglitz stated that “40 percent of the world’s wealth…controlled by 1 percent of the people.”

• How rich are the superrich?

• In 10 seconds, Jeff Bezos of Amazon earns more money than the median employee at Amazon makes in an entire year.

• In 2018, Disney CEO Bob Iger received $65.6 million (1,424 times the median Disney employee). Abigail Disney complained that this pay level was “insane.” But Bob Iger said that was exceptional. His normal annual pay is only $39 million.

• Here are some fortunes (Forbes, Oct.31, 2018)

• Jeff Bezos $160 billion (before divorce)

• Bill Gates $97 billion

• Warren Buffett $88 billion

• Mark Zuckerberg $61 billion

• Larry Ellison $58 billion

• Larry Page $54 billion

• Charles and David Koch, each $53 billion

• Yet In 2018, the 400 richest families were taxed at a lower rate than the bottom 50% of the country

• Comments of many notables about the excessive income gap

• President Theodore Roosevelt repeatedly advocated tax policies that would create more equality. He said, “It is important to grapple with the problems connected with the amassing of enormous fortunes swollen beyond all healthy limits.”

• President Franklin Delano Roosevelt said of his New Deal in the 1930s that he pledged, “To save capitalism from itself.”

• Christine Lagarde, IMF, “Excessive inequality is corrosive to growth; it is corrosive to society. The economics profession and the policy community have downplayed inequality for too long.” (2013)

A fourth factor retarding full action toward progressive policies is that Congress was pressured to pass different relief measures to help those who met misfortune. These measures include Social Security, unemployment insurance, and social assistance organizations. These measures are band-aids that do not really address the source of the problem that keeps workers from getting a better share of the economic pie generated by American Capitalism.

What is American Capitalism Really Like?

We first need to first define Capitalism. Capitalism is an economic system in which:

• the means of production are privately owned and operated for private profit;

• decisions regarding supply, demand, price, distribution, and investments are made by private actors in the free market; and

• profit belongs to the owners who invest in the business, and wages are paid to workers employed by the businesses.

This economic system is often embedded in a Mixed Economy where government occasionally assists private enterprise but also imposes regulations.

Socialism describes an economy where the government might run a small number of businesses or industries, such as the railroads, that are necessary for the public good and not for profit.

Communism describes a system where the government runs and owns all businesses and does central planning for the whole economy.

American Capitalism started out as free-wheeling unregulated capitalism. Early Americans started small businesses buying some land and equipment. Some businesses, such as steel, railroads, and consumer goods grew bigger. Laws were passed regulating business scope and rights. Many businesses incorporated. This allowed them to raise money by issuing ownership shares, or debentures, or getting bank loans. Corporations meant that owners were not personally liable for debts or bankruptcy unless there was malfeasance. The aim was to establish fair competition among businesses through antitrust laws and their watchful administration.

The question arose about the purpose of a business. The economist Milton Friedman advanced the view that the purpose of a business is to maximize profits. Furthermore the profits belonged to the shareholders. The business should not get distracted by social problems or causes. Its job is to make profits. The shareholders who gain should be free to dispose of their wealth however they want.

Looking back at Milton Friedman and his counterpart in England, Margaret Thatcher, the ideal society was one of small government with few regulations. This philosophy got the name “neoliberalism.” This view of business was taught in business schools, Businesses were run on these principles. When Donald Trump won the Presidency in 2016, he made it clear that he wanted smaller government and fewer regulations.

Yet many businesses are now beginning to share a more expansive view of business and its purpose. From the old view of enriching shareholders who own the business and took the risks (Shareholder Capitalism), the new view is to treat fairly all the stakeholders who make the business successful — customers, employees, suppliers, distributors, and communities — (Stakeholder Capitalism). This is further epitomized by the slogan, “The aim of business is to serve people, profits, and the planet with prosperity.”

A growing number of business leaders now care deeply about the nation and its health. They are not from the laissez faire school of Capitalism aiming at maximum short term profits. This group knows that the stakeholders and their love of the business creates profits. Yes, laissez faire capitalism has produced great wealth growth but it does not relieve any national problems. It doesn’t end poverty and hunger. If anything, old fashioned capitalism creates growing income and wealth inequality. According to the economist Thomas Piketty, capital will always earn more than labor in a growing economy.

Table 3 summarizes the new thinking in management about the purpose of business.

Table 3. The Evolution of New Ideas about the Purpose of Business

1. Larry Fink, CEO of Black Rock group, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.” (2018)

2. Stephen Hahn-Griffiths, Reputation Institute: “It’s not enough to just have a high-quality product and deliver results on Wall Street. Social activism, aligning with communities, what you do to make the world a better place — that’s the metric.”

3. Professor Klaus Schwab is founder and executive director of the World Economic Forum (WEF). WEF holds its annual meeting in Davos, Switzerland and attracts thousands of eminent business, academic and government leaders and celebrities. WEF collects economic information during the year and traditionally takes a conservative economic position. However, today WEF is pursuing a Great Reset. Klaus Schwab’s new book Covid-10:The Great Reset (2020) calls for businesses to change many of their past practices, including less frequent air travel and more workers working at home. Many companies are shifting from shareholder capitalism to stakeholder capitalism that they had previously barely considered. There is greater interest in steering the market toward more equitable outcome shares. Government needs to withdraw fossil-fuel subsidies, and to develop new rules to govern intellectual property, trade, and competition. Governments need to launch large-scale stimulus spending programs. Cities need to commit to “green” urban infrastructure and to environmental, social, and governance (ESG) metrics. Private enterprise and government must do more innovation to improve the common good through better vaccines and health related efforts. The will is forming to build a better society, with the help of more private-sector engagement and more effective government.

4. The Business Roundtable (BRT) is a non-profit association based in Washington, D.C., whose members are CEOs of major U.S. companies. BRT promotes public policies such as NAFTA and No Child Left Behind. BRT opposed Trump’s family separation policy. In 2019, BRT redefined its definition of the purpose of a corporation, putting the interests of employees, customers, suppliers and communities on par with shareholders. BRT members include Jamie Dimon of Chase Morgan, Jeff Bezos of Amazon, Tim Cook of Apple, and Mary Barra of General Motors.

5. The American Sustainable Business Council includes business leaders who believe in a living wage, worker dignity, racial justice, well-run workplaces, the circular economy, better climate and energy, and improved infrastructure. The members believe that “jobs are created when consumers have money to spend and destroyed when they don’t. Businesses cannot succeed unless consumers have the ability to spend and confidence to spend it.”

6. Many leading companies have taken public stands on political issues that have a high level of agreement from voters. This includes Starbucks, Unilever, Levi Strauss, Nike, Body Shop, Patagonia, Ben and Jerry’s and many others.

7. Many business leaders and some billionaires want to pay higher income taxes. Bill Gates of Microsoft and Warren Buffett of Berkshire Hathaway have stated this. In addition, Gates and Buffett convinced 204 billionaires to sign the Giving Pledge to give away half of their money to good causes within the next ten years of signing up. The signatories have included Ted Turner, Marc Benioff, Mark Zuckerberg, Michael Bloomberg, Larry Ellison, David Rockefeller, and many others.

8. The Responsible Business Alliance (RBA) is the world’s largest industry coalition dedicated to corporate social responsibility in global supply chains. Most companies now acknowledge that they would be advantaged by showing that they care about some public issue, such as water scarcity, overtimbering, overfishing, climate change, racial injustice, income inequality, college student debt, or health care for all. Business must lead the new world order built on climate protection, sustainability, resilience, digital inclusion and equality. Member companies address responsibility in the management of factories, labor, and supply chains

9. A movement called Conscious Capitalism, founded by John Mackey, former CEO of Whole Foods Market and Raj Sisodia, a marketing professor, have a growing membership of individuals and companies who believe that business and capitalism should work for all stakeholders, not just shareholders. Conscious Capitalism holds to four principles to guide a socially responsible and ethical business: 1. Higher purpose beyond money-making. 2. Creating value for all stakeholders. 3. Conscious leadership to focus on value creation. 4. Conscious culture that links stakeholders with each other and with the company’s mission, workers and processes.

10. Companies originally thought of corporate social responsibility (CSR) as a polite gesture. Yet in Corporate Social Responsibility (2005), Nancy Lee and I described the positive social responsibility activities of 45 leading companies, where each company cared deeply about some social issue. CSR has moved much further since then to Brand Activism where a company’s uses its brand to influence reforms on social, economic and political issues.

What is Nordic Capitalism and its Major Benefits?

Here we look at Nordic Capitalism (also called Scandinavian Capitalism). Technically, Scandinavia describes the three countries of Sweden, Denmark, and Norway. If we add Finland and Iceland, the group is Nordic. The five Nordic countries all practice what has been variously called Economic Democracy, Social Democracy, or Welfare Capitalism.

The The Nordic countries enjoy similar economic and social policies as well as cultural practices. The Nordic economic model is a welfare state with collective bargaining and free-market capitalism, strong trade unions and 30% employment in the public sector. Prosperous large and small companies operate and export and compete around the world.

People in the Nordic countries enjoy high living standards, high health and happiness, and low income disparity. Table 4 shows the main features and benefit of the Nordic economy.

Table 4. Main Features and Benefits of the Nordic Economy

• Free college tuition

• Free and excellent health care for all citizens

• A much longer worker vacation time

• Maternity and paternity benefits

• Child care and aged parents care

• The Nordic idea is to make a good life for all citizens.

• These benefits go with an income tax system whose top rate is 70%.

Here are some additional characteristics to notice about the Nordic population.

• Nordic countries figure significantly in the 10 happiest countries in 2019 (Finland, Denmark, Norway, Iceland, Netherlands, Switzerland, Sweden, New Zealand, Canada and Austria). The U.S. ranked only 19 in happiness.

• Nordic countries figure significantly in the 10 most health-conscious countries in 2018 (Sweden, Switzerland, Denmark, Norway, Finland, Canada, Australia, Japan, Netherlands, and New Zealand). The United States ranked only 35 in health quality.

• This implies a strong correlation, if not causation between an economy run on Nordic principles and the levels of happiness and health of its people.

How to Move American Capitalism into Nordic Capitalism?

Does America have the interest, will and ability to pursue a form of Capitalism that will improve the livelihood, happiness and wealth of most Americans?

Let’s consider whether enough Americans see Nordic capitalism as a promising and better economic system. In 2011, two American social scientists, Michael I. Norton (Harvard Business School) and Dan Ariely (Duke University) published a study. American respondents were asked to:

1. Estimate the current American wealth, and

2. Construct your ideal level of wealth distribution for the U.S.

The findings showed that Americans deeply underestimated the current level of wealth inequality. The findings all showed that respondents’ ideal wealth distributions were far more equitable than the current wealth distribution in the U.S.

Then the respondents were asked to vote between three alternative wealth distributions in a country.

A. the current wealth distribution in the U.S,

B. a completely equal wealth distribution

C. a wealth distribution equal to the income distribution of Sweden (but Sweden wasn’t named)

The result: 92% of the Americans preferred Sweden’s distribution to the U.S. distribution. And 77% preferred complete equality to the U.S. distribution. And 51% preferred Sweden to complete equality. The researchers drew the conclusion that the overwhelming majority of Americans thinks that Sweden represents a better social order than America.

Unfortunately, what was omitted from the study is the fact that Nordic citizens get all these benefits at a price. In the U.S., the highest marginal income tax rate is 37 percent. In Nordic countries, the maximum marginal tax rate is 70%, or twice the maximum U.S. tax rate. If the U.S. operated as a Nordic economy, taxes would be higher for most Americans, and especially higher for wealthy Americans.

We need to ask Americans if they would prefer to live with the benefits of Nordic Capitalism and pay a substantially higher income tax rate. The American philosopher Oliver Wendell Holmes, Jr. probably would have said yes. His quote: “I like to pay taxes. With them, I buy civilization.”

There is enough evidence that a substantial number of Americans would favor Nordic Capitalism and higher taxes. Senators Bernie Sanders and Elizabeth Warren won big followings, especially among younger Americans, when they ran as Presidential candidates. Bernie Sanders main proposals are shown in Table 5.

Table 5. Main Policies Advocated by Presidential candidate Bernie Sanders

• Medicare for All.

• College should be free.

• Wages must rise to a living wage.

• Unions to give workers a voice.

• Free child care and Pre K for all.

• Invest more in public education.

• Raise tax rates on the rich.

• Women’s rights and gender equality.

• Racial justice.

Sander’s proposals closely describe Nordic policies.

A number of American billionaires and organizations favor a more just Capitalist economy. See Table 6.

Table 6. Developments Favoring a More Just Capitalist System

• The Giving Pledge. Bill Gates and Warren Buffett signed up 204 billionaires from 22 countries who have pledged to give away half of their money to philanthropic causes in the next ten years. The pledge does not dictate how the money is to be spent and there is no legal obligation. Their pledges so far total over 500 billion.

• Patriotic Millionaires. They are lobbying Congress to raise federal taxes on the rich and to close tax loopholes. They believe that no millionaire should pay at a lower tax rate than middle-class Americans.

• Some CEOs recently rejected their bonus. Virginia Rometty, CEO of IBM, turned down a bonus of $8 million based on the company’s performance. Barclay’s CEO, Antony Jenkins turned down his bonus of $2.8 million for the second year saying “it would not be right.” Larry Ellison of Oracle turned down his bonus.

Table 7 lists the names of wealthy dissidents who favor a more progressive Capitalism.

Table 7. Billionaires Favoring a More Progressive Capitalism

• Nick Hanauer, “Beware, Fellow Plutocrats, the Pitchforks are Coming.”

• Ray Dalio, founder of hedge fund Bridgwater Associates, says the bottom 60 percent have had no income growth since 1980, while the top ten percent have doubled and the top one percent have tripled.

• Marc Benion, CEO of Salesforce, wants San Francisco to tax its largest companies to raise enough money to double the budget that helps the city’s homeless people find housing.

• Abigail Disney, George Soros, and the Pritzkers, favor a moderate wealth tax on the 1%.

• The B Team are several leading CEOs who want to develop a new tax framework with a set of responsible tax principles. The group includes Paul Polman, Indra Nooyi, Muhammad Yunus, Ratan Tata, and several other high rank executives.

• Bill Gates and Warren Buffett, The Giving Pledge.

• The Patriotic Millioinaires movement.

The case of Bill Gates is interesting. Gates founded Microsoft in 1975 when the top marginal tax rate was 70 percent and the estate tax was even more formidable. That didn’t stop Gates for starting Microsoft. Nor would Walt Disney or Richard Branson have stopped expanding their businesses if taxes were higher. Many wealthy people are passionate about their work and causes and profit isn’t the only motive. Gates publicly said that he favors paying a higher income tax rate. “That’s why I’m for a tax system in which, if you have more money, you pay a higher percentage in taxes. And I think the rich should pay more than they currently do, and that includes Melinda and me.” However, he does not favor a wealth tax in addition to a higher income tax rate. “I do think if you tax too much you do risk the capital formation, innovation, U.S. as the desirable place to do innovative companies — I do think you risk that.”

A lot of this willingness of superrich people to pay higher taxes is partly due to the rich paying taxes at a lower rate than average Americans. Many prominent persons have spoken about the obscene, glaring and growing gap in income distribution.

• “The defining challenge of our time.” Barach Obama

• “An economy of exclusion and inequality.” Pope Francis

• “Inequality has gotten worse.” Mitt Romney

• “I have often advised managers that a 20-to-1 salary ratio is the limit beyond which they cannot go if they don’t want resentment and falling morale to hit their companies.” Peter Drucker

These well-off people are right to be concerned about growing income inequality. Here are some of the fears:

1. The wealth gap is only getting wider. Low wages lead to inadequate food, clothing and housing, poverty, slums, and homelessness. And the middle class is getting smaller.
2. Some low income people will pursue a life of crime. Many wealthy families live in gated communities with private police forces.

3. The economy leads to gig work which doesn’t provide any health insurance or pensions.

4. It is immoral for a country to have so much wealth and so many poor. It can lead to either low productivity or a revolution.

What Measures Can be Taken to Reduce Income Inequality?

When enough Americans realize the growing income gap, they might put enough pressure on Congress to consider and weigh different proposals for reducing the income gap. Table 8 displays several of the leading proposals.

Table 8. Measures for Reducing Income Inequality

• Raise the minimum wage closer to a living wage

• Make the income tax system more progressive

• Plug the tax loopholes

• Raise the tax on capital gains and carried interest from 23.8% to normal tax rate

• Establish a wealth tax on wealth and estates

• Establish a tax on luxury goods

• Establish a tax on financial transactions

• Cap the ratio of top executive pay to median worker pay

• Establish a universal basic income program

Congress should research each proposal and gather the opinions of those who favor and those who object. Some proposals will draw more assent than others. There is much to favor raising the minimum wage, which is not a livable wage at $7.45. Any worker earning this would have to borrow money at high interest rates as soon as receiving the weekly pay check. The worker would stay in debt forever, never accumulating enough to retire on. Fortunately, many states have increased their state minimum wage to $15. The idea is that the worker is “the real job creator.” The worker who receives more pay will spend all of it, thereby generating more jobs. Henry Ford illustrated this when he decided to double the pay of his auto workers to $5 and so many more workers ended up buying their first Ford.

Establishing a tax on financial transactions could get quick assent. The stock market is a gambling institution. It is subject to manipulation by large financial interests. Many low and middle income people trade and often lose money in the stock market. A fee on each purchase or sale of stock will discourage wasteful participation and speculation. Senator Bernie Sanders proposed a small excise tax, typically a few hundredths of a percent, on trades of stocks, bonds, derivatives and other securities. A one-basis-point tax on $1,000 worth of stock would cost the stock trader 10 cents. A $100,000 trade would generate a tax of only $10. The nonpartisan Tax Policy Center estimated that a 0.01 percent tax would raise $185 billion over 10 years. That amount could finance an ambitious expansion of prekindergarten programs for 3- and 4-year-klds and restore funding of college assistance for low-income students.

Making the income tax system more progressive will generate a lot of debate. We need to recall that the top income tax rate was as high as 91% during WW2. In 1964, the highest tax rate was lowered to 70%. President Reagan managed to lower the maximum rate from 70% to 50% and subsequently down to 38.5%. Under President George W. Bush, the maximum tax rate was lowered to 35%. During the 2008–2011 fiscal disaster, the top tax rate was raised back to 39.6%. The Tax Reform Act of 2019 reduced the maximum tax rate to 37% and created a 1.5 trillion dollar deficit. This was “trickle up,” redistributing money from the poor to the rich.

New York’s mayor Bill de Blasio had a nice homey way of pleading to the rich to pay more: “We will ask the very wealthy to pay a little more in taxes so that we can offer full-day, universal pre-K and after-school programs…Those earning between $500,000 and $1 million…would see their taxes increase by an average of $973 a year. That’s less than three bucks a day — about the cost of a small soy latte at your local Starbucks.”

Senator Elizabeth Warren favors passing a wealth tax. She called for households to pay an annual 2% tax on all assets — net worth — above $50 million, and a 3% tax on every dollar of net worth above $1 billion. She recently added possibly raising the billionaire wealth tax rate to 6 percent instead of 3 percent to help pay for education, health and other needed things. One study reported that 74% of Americans favored a wealth tax.

Yet there are a great number of Americans who object to many of these proposals. Opponents of a wealth tax say:

• We earned the money honestly and fairly.

• A wealth tax will discourage the rich from investing in risky ventures and hurt our economic growth.

• The superrich have excellent lawyers who will help the rich defer, avoid or minimize the wealth tax or move their wealth abroad.

• A tax on wealth would hurt philanthropy and the support of many museums, universities, and hospitals.

• A wealth tax is unjust and unconstitutional because it confiscates personal property. They will cry out against “redistribution” and “class warfare.”

All this will have to be researched and debated.

From a big picture point of view, moving to a Nordic economy at a faster pace would also benefit from other potential developments:

• Restore strong trade unions.

• Improve public education.

• Educate the working class to act in their own interests. The poor are often the ones who are trying to preserve the little that they have not realizing that they are entitled to much more and need to support progressive causes.

• Gain more social justice for “black lives matter” and other discriminated groups.

• Pay police and firefighters a higher wage and provide more training and best and safest equipment.

• Pass the Universal Basic Income (UBI) so that all people receive a basic payment to meet their expenses.

• Encourage individual states to move faster in adopting progressive measures.

• Ultimately, more people will vote Democratic and this will ultimately increase the support of progressive measures.

What Conclusions Can We Draw?

1. The essence of capitalism is property rights, economic freedom, regulations, and rule of law.
2. Capitalism takes on many forms: U.S. capitalism, Nordic capitalism, Japanese capitalism, and Chinese capitalism. These vary from “free capitalism,” “crony capitalism,” and “ highly regulated capitalism.”
3. Capitalism has been a major contributor to raising the standard of living and innovating new and better products.
4. Capitalism has led to high growth but very unequal income and wealth distribution.
5. The American people would benefit if American Capitalism could move closer to Nordic Capitalism.

The idea is make Capitalism work better for more people.