Categories
Book Reviews Uncategorized

Viking Economics

The Scandinavian Social Democratic Economic Model

“The cruelty of high inequality countries is to induce starstruck dreams upon their young people, but refuse to fund pathways to get there”

George Lakey, ex Professor for Issues in Social Change, Swarthmore College

The social-democratic economic model.

High taxes, high wage costs, short hours of work, long vacations, even longer maternity leave, free childcare, free college education, extensive social welfare programs that pay an unemployment benefit of up to 80% of your wage,

 And highly productive economies sound like an oxymoron, a fantasy too good to be true.

How would you encourage entrepreneurs and compete in a globalised economy when your costs are so high? In a world where low labour cost and low taxes are deemed essential for success.

This book dispels the myths that prevail, putting Scandinavian success down to culture, a homogenous population, size of the countries etc. An anomaly.

The arduous journey these nations undertook to transform their economies, from the Viking spirit of war and adventurism to capitalism with a human touch, a caring society. The struggles of the Nordic people to achieve a more equal country over more than a hundred years. The battles to overcome missteps that arose, trying to follow the neo-liberal models that changed the Anglo-American economies in the 1980s. The recovery from virtual bankruptcy that engulfed Iceland following the Global Financial Crisis of 2008. A clue -they didn’t bail out the reckless bankers. And they resisted pressure from the IMF to implement harsh austerity measures.

Scandinavian countries have a higher rate of startups than the USA, free higher education builds human capital, an excellent social welfare net encourages risktaking.

Businesses are encouraged to be competitive, except by cutting wages and benefits. Strong unions provide a balance between employers and employees. Successful cooperative ventures dispel the myth that private ownership or listed companies are the only viable economic models.

Scandinavians support high taxation, as they know they get a high level of services in return– “To get a lot, we pay a lot”. The economic system was built for everyone. It is not a system that encourages the notion in high inequality countries that the winners are supporting losers.

Social welfare programs, while comprehensive, encourages a strong work ethic. The focus is on getting people back to work. Sole parents are encouraged to work by providing free childcare. Teenagers are supported into employment or apprenticeships, providing a smoother transition from school.

This book by George, an American who lived in Norway for many years tells the story of the Nordic economic model. The successes, the challenges, warts and most importantly, lessons for the rest of the world. How we can achieve a highly productive economy where people are treated with dignity and the balance between business and society is highly equitable.

Full review by Chuck Collins who directs the Program on Inequality and the Common Good. https://ips-dc.org/take-lesson-nordic-countries-inequality/

By Kushlan

Interested in social justice issues and climate change

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s