If We Don’t Want to Be Chinese

The Objective, November 2, 2025

The outrage of Spain’s self-employed over the government’s announced rise in social contributions has been striking. Their anger is not only economic, but moral. They see the full bill—and therefore try to pay as little as possible. The problem is that salaried workers cannot choose: they bear a much heavier burden without realizing it, because companies pay it for them. That opacity is a problem in itself: democracy requires citizens to be aware of the costs and consequences of making their desires reality.

Out of this blindness to costs our social policy is born. We want universal, free public services—but without tolls, court fees, copayments, or tuition. We want benefits without costs; protection without discipline; redistribution without accepting that production must come first. The result is a mosaic of contradictions, sustained by the institutional picaresque of a state that promises much, collects little—and badly—and hides the difference behind debt that our young people will have to pay in the future.

Comparisons with northern Europe are revealing. In Sweden and Denmark, public spending hovers around 50% of GDP and there is no deficit. In Spain, spending is slightly lower—46.4% in 2022—but revenues barely reach 41.8%. We spend like the rich and collect like the poor. Moreover, we privilege consumption over investment: the Spanish state invests, as a share of GDP, half of what Sweden does and 60% of what Denmark does. We want first-rate services with second-rate taxes, and the deficit covers the difference—but it finances pensions and public salaries, not productive investment. Nor, for that matter, genuine redistributive policy, since instead of paying for social programs, we pretend to make them by foolishly restricting private contracts: a false solution that redistributes income while aggravating problems, as the collapse of the rental market illustrates.

The differences are even clearer in detail. Swedes and Danes pay a general VAT of 25%, almost without reductions or exemptions. We, by contrast, maintain a tangle of reduced rates that stimulate consumption and weaken revenue. The distortion in income tax is similar: our top rates are comparable to those in the Nordic countries but hit middle and lower incomes much earlier—up to an effective 49% between €18,000 and €23,000. Then we add fixed deductions unrelated to income level, which discourage effort. The result: we stifle productivity and, relative to GDP, collect less than half what Denmark does.

This pattern repeats itself, for we punish effort and mobility in nearly every sphere. Our taxes on capital are more than 20% higher than those in Scandinavia. Regarding property, recurrent levies—like Spain’s property tax (IBI)—weigh much more than occasional ones, entrenching the feudal “amortization” of real estate, discouraging turnover, and leaving homes vacant. Fees and prices for public services amount, as a share of GDP, to barely half the Swedish level and a third of Denmark’s; as a result, their use becomes so cheap it encourages waste.

But behind those figures lies a deeper fracture: mistrust. In the Nordic countries, more than six in ten citizens say that “most people can be trusted”; in Spain, barely three in ten. Out of mistrust grows a paradox: we distrust our neighbor and the market, yet demand more state—more controls, more barriers, more tutelage—which breeds inefficiency and, in turn, greater mistrust. A perverse vicious circle: little trust, more state; more state, less trust.

When generalized trust fails, we seek other forms of security: first in the family, then in a paternalistic state. Hence our peculiar “domestic” welfare model: the average age of leaving home is over thirty, compared with just over twenty in the north; and after leaving, “dad’s credit card” supplements the paycheck while “granny-nanny” replaces public daycare. The family also replaces the conscious taxpayer: our kin networks protect us—but also condemn us. Under the shelter of the clan, we tolerate opacity and favoritism: much cooperation and generosity within the family, but mistrust and cronyism outside it. It is no accident that where family bonds are strongest, impersonal trust is weakest.

The same pattern explains why we favor such exhaustive regulation—even when we distrust the regulator. Those who assume that others will cheat demand strict rules to contain them. But overregulation breeds arbitrariness, paralysis, and corruption—and with them, still more mistrust and more demand for tutelage.

Breaking this vicious circle requires impersonal institutions and fiscal transparency: seeing the full bill so that voters stop demanding miracles on credit. Here lies one of the major differences with the north. The Scandinavian model is no miracle—and may not even be sustainable—but it rests on an adult pact: high taxes, stable rules, personal responsibility, and transparency. The state redistributes more than Spain’s does, but only what citizens produce and pay, without indebting the young. Here, by contrast, the state promises to redistribute what does not yet exist and hides who pays for it. That is why the debate over the self-employed’s social contributions is so revealing: no one wants to see the full bill.

If we don’t want to be Danish, we might look eastward. Poland combines moderate public spending—around 42% of GDP—with a simple income tax (12% and 32%, with a high exemption threshold) and a general VAT of 23%. Unlike Spain, it taxes consumption more and labor less, and 64% of its social charges are visible to workers, compared with 26% in Spain. It is not an example of fiscal discipline—it runs deficits of 5–7%—but those stem largely from its defense effort, now reaching 4.7% of GDP. It shows that with clear rules and broad tax bases, a modest yet effective state is possible. Its progress speaks for itself: it is about to surpass our standard of living, when in 1990 its income was barely a third of Spain’s.

We can aspire to a large or small state—but not an incoherent one. My hunch is that our personalist culture fits better with a limited, focused, and transparent state: one that collects and promises less, but keeps its word. If we prefer a Scandinavian-style welfare state, let us also adopt its fiscal method: pay for what we say we want, and demand only what we truly help finance. What is unsustainable is to maintain a system that promises like the Nordics, collects like the Mediterraneans, and performs like the Latin Americans.

English version prepared with ChatGPT-5.0