Advice for Mayor Mamdani – Kevin D. Williamson

Mamdani may attempt to govern as a socialist, but I doubt that will come to pass. Socialism has an unbroken record of failure across many different kinds of countries and historical periods, not only in autocratic hellholes such as Cuba and North Korea but also in advanced countries such as the United Kingdom in the postwar years. Historically speaking, it was only the day before yesterday that the left-wing vanguard of the Democratic Party was enthralled with such an autocratic thug as Hugo Chávez of Venezuela—and how’s that working out? Democrats have been walking sideways away from the junta in Venezuela for a while now, but it is more to the point that genuinely democratic socialism already has shown itself to be a failure in the very countries that boutique radicals such as Mamdani claim to admire: the Scandinavian welfare states. 

There is much to be said in favor of how they do things in Denmark, Norway, and Sweden, but what you cannot say is that this is what democratic socialism looks like. One ought not treat those countries as an undifferentiated lump, but look at their policy trajectories in the postwar era, and you’ll find something that looks not unlike the story of the United Kingdom: aggressive, left-wing, socialistic policies oriented around a large public sector and state-run enterprises running aground in the 1970s and thereafter, followed by a period of market-oriented reform and privatization, most dramatically in the 1990s. While Mamdani dreams of creating new state-owned enterprises—his dopey socialist grocery-store initiative—the Scandinavians spent a generation fully or partly privatizing many of theirs, to great positive effect. For years, the Heritage Foundation (which wasn’t always run by and for crazy people and grasping imbeciles and miscreants) has ranked countries such as Denmark, Norway, Sweden—and Canada!—ahead of the United States on its economic freedom index. The Scandinavian countries are not characterized by democratic socialism; they are characterized by robustly capitalistic free-market (and free-trade) economies with expensive welfare states and relatively high taxes on middle-income families. 

So, Denmark is nice. Is that what Mamdani has in mind? It may be, but if you are the mayor of New York City and your north star is urban affordability, you may not want to lean too heavily into the model of community life that produced Copenhagen. Copenhagen is a wonderful, livable city—but it is not an especially affordable one. Depending on which survey you consult, Copenhagen is either in about the same affordability ballpark as New York City or—and this is my own impression—a bit more expensive in real terms. And, of course, the United States is not very much like Denmark, which is full of Danes. If you are looking for a practical model of urban affordability from which New York City might actually take a profitable lesson, consider Houston, a thriving city that has maintained an enviable position of relative affordability by working from the eccentric economic theory that if you let people build houses, there will be more houses. It isn’t pretty, but it works. 

Mamdani et al. often speak admiringly of Scandinavia, and, indeed, there is much to admire—but American progressives do not seem to have much idea of how things actually work in those countries. Perhaps it is those brumal Scandinavian landscapes that invite progressives to think of these societies as a big blank canvas upon which to project their fantasies. One of those fantasies is that the United States could pay for the kind of welfare state Bernie Sanders and Zohran Mamdani imagine without raising taxes on anybody except their political enemies—you know, the millionaires and billionaires, the “allah-garks,” as Sen. Sanders calls them. (The senator has a terrific accent, but I’ve always thought the way he pronounces “oligarchs” sounds like he should be talking about the gangsters in Tehran or Kabul.) Class warfare isn’t how they roll in Scandinavia. Oslo is a terrific place to be a billionaire—Copenhagen and Stockholm, too. But, compared to the United States, those are tough places to be middle-income taxpayers. 

Country-to-country tax comparisons can be difficult for all sorts of reasons—e.g., some of the expenses the Germans bear in the form of higher taxes we Americans bear in the form of college tuition—but if you consult the most rigorous analysis available, what you’ll find is that what’s radically different about the Scandinavians is not how they tax the very high-income but how they tax the middle. 

Tax nerds talk about the “wedge,” meaning the overall share of labor costs made up of taxes. Consider a model middle-income family with two children and two earners, one earning 100 percent of the average wage and one earning 67 percent of the average wage. As the Organization for Economic Cooperation and Development analysts run the numbers, such a family has a tax wedge of 37.8 percent in Sweden, 32.2 percent in Norway, and 31.6 percent in Denmark—but only 24.8 percent in the United States. Which is to say, taxes on a middle-income family in Sweden are about half-again as much as on a U.S. family. 

“But look what they get in return!” comes the answer, and there is something to that: The tax wedge in Turkey is higher than in Denmark, and the tax wedge in Switzerland is a lot lower than in Denmark (or in the United States, for that matter) but I do not think that many of us think a middle-income family in Turkey is getting a lot more for its money than a similarly situated family in Denmark or Switzerland. There is more to good governance than tax rates—something the mayor-elect should keep in mind, given that his own sophomoric tax plans are almost certainly dead letters already. 

Again, international comparisons can be useful but are tricky: Progressives speak admiringly of “free” health care in Canada, but if Canadians need, say, in vitro fertilization treatment (to take an example from the headlines) then they can expect to pay an average of more than $13,000 out of pocket for their free health care. And there is the complicating fact that there are other medical services available to Americans that those enjoying “free” health care in Canada or the United Kingdom cannot access at any price, at least without leaving their home countries, with Canadians, for example, increasingly open to traveling to the United States for medical care. “Free” university education in Germany is less accessible to more Germans than you might imagine. There is no government-provided health care at all in Switzerland, but there is active government management of prices and accessibility. 

If Mamdani wants to actually emulate the Scandinavian model (or even the Western European one), then he needs to get on the horn with his party’s leaders in Congress and start demanding real-world Scandinavian policies: much higher middle-income taxes, much more accountability in public services and public administration, decentralization of government-provided health care benefits (Sweden offers a good example of this), etc. But neither the more moderate national Democratic leaders nor such insipid radical poseurs as Alexandria Ocasio-Cortez actually support these policies. They support a fantasy in which good things can be had at no cost except those imposed on political enemies and cultural rivals and imaginary bogeymen. 

The left-wing vision of New York City is too much influenced by illiterate nostalgia. The soak-the-rich fantasy of Mamdani and other left-wing radicals is rooted in a relic of the middle of the 20^th century, a period when firms and individuals at the commanding heights of key industries—finance, media, publishing, advertising, fashion, etc.—in many or most cases simply had to be based in New York City or at least have a significant presence there. That is no longer the case. Many of the financial titans (and several of the firms) have shifted their operations—and their tax bills—elsewhere already (hence those 384,000 finance jobs in Dallas), and more are sure to do so if the city becomes even more hostile to their economic interests than it already is. A very small share of New York’s taxpayers—fewer than 1 percent—pay about 40 percent of all the state’s taxes. As with the disproportionate share of federal income tax paid by high-earning Americans nationwide, that share is not only disproportionate to their numbers but also disproportionate to their share of income. Mandani should administer to himself a very considerable dose of realism—he owes it to his new constituents. That means, among other things, improving the city’s business environment, making it more attractive to high-income taxpayers, and—he can pretend this is Ezra Klein’s idea if that makes him feel better—institute policy changes that will make it easier to build new housing and invest in the existing housing stock. Instead, Mamdani proposes to go in exactly the wrong direction, discouraging investments in housing by creating radical—and radically stupid—disincentives in the form of expanded rent regulation. 

Price controls lead to shortages—that is as close to an ironclad law of economics as there is. Those shortages end up being mitigated by some form of rationing, either official or unofficial—something New York’s renters already know from firsthand experience. If Mamdani wants to actually fix the housing problems in New York, that begins with letting markets work—with market prices. Rent regulations simply mask underlying economic problems and distort both investment and consumption; aligning the economic incentives of developers, owners, and landlords with those of renters and would-be homeowners is the way toward actually rationalizing the economic misalignment at work—treat the disease, not the symptoms. It would be difficult to think of a policy more likely to make things worse in the long run than an arbitrary rent freeze. Why invest $100 million in the Bronx, with the weight of the city government pushing down on your upside, when you could take your money to Dallas or Charleston or Orlando and not have the mayor trying to put a leash on your returns? 

The voters have spoken—but Econ 101 still has a say. 

Mayor Mamdani is not going to remake the American social order from Gracie Mansion. The happy news for him—if he has the wit to heed it—is that he doesn’t have to do that. The mayor of New York City has limited powers, but that which is within his sphere of influence matters a great deal: A New York City in which the trash gets picked up, the public spaces are not used as makeshift psychiatric wards, and crime is reasonably controlled is a working, functional city. Add in the areas in which the mayor has some influence but not plenipotentiary control—mass transit and the schools—and New York, where I lived happily for many years, is a very attractive city, indeed. For families, the schools matter a great deal, both to quality of life and to affordability—to the young single transplants who traditionally have powered so much of New York culturally and economically, sorting out the subways and the crime would be sufficient—and a mayor who managed to get one of those done would be considered a smashing success. 

I wish Mamdani great success in New York City for the same reason I wish the powers that be in California would roll up their yoga mats, roll up their sleeves, and straighten out the public affairs of that once-great state: I like these places and may someday once again live in one or the other, and I do not think that the United States can be a successful country unless New York City and California are successful. An America with a disabled New York City and California is like a beautiful, well-maintained sports car that is in tip-top shape except for the starter and the transmission. (Classic Jaguar owners will have experienced this situation, roughly monthly.) The great American machine has many moving parts, and we need all of them to function together. 

It does not seem to me that Mamdani has had much of a practical education in these matters. He is about to get one. But there are people he could think of as politically adjacent allies who could give him decent advice on this stuff. So far, there is not very much evidence that he is listening to them, if he is even seeking them out. Urban affordability, particularly in the matter of housing, is less of a left-right issue than an issue of wishful thinking vs. reality. And the thing about reality is, it isn’t optional.