The Nordic Mirage
Scandinavia has a disproportionate role in the American political imagination. For progressives, the Nordic countries represent a postmodern Cockaigne, in which economic egalitarianism is balanced with personal autonomy in a way that communism never achieved. For conservatives, on the other hand, “Sweden” is shorthand for the fusion of an infantilizing welfare state with unusually suffocating political correctness. Either way, Americans talk much more than you’d expect about peripheral region with a combined population of only about 26 million.
A report in The Economist argues that the Nordic countries are worth special attention, but also that both sides misunderstand the reasons. According to an economist quoted in the piece, Sweden, in particular, is pursuing a “new conservative model” that combines flexible labor markets, consumer choice, and high technology with relatively generous welfare and infrastructure spending. The result is a successful capitalist economy without especially small government:
The Nordics do particularly well in two areas where competitiveness and welfare can reinforce each other most powerfully: innovation and social inclusion. BCG, as the Boston Consulting Group calls itself, gives all of them high scores on its e-intensity index, which measures the internet’s impact on business and society. Booz & Company, another consultancy, points out that big companies often test-market new products on Nordic consumers because of their willingness to try new things. The Nordic countries led the world in introducing the mobile network in the 1980s and the GSM standard in the 1990s. Today they are ahead in the transition to both e-government and the cashless economy…
The Nordics also have a strong record of drawing on the talents of their entire populations, with the possible exception of their immigrants. They have the world’s highest rates of social mobility: in a comparison of social mobility in eight advanced countries by Jo Blanden, Paul Gregg and Stephen Machin, of the London School of Economics, they occupied the first four places. America and Britain came last.
This account of a wired, entrepreneurial society that meets progressive demands for social integration and mobility will appeal to the kind of technocratic centrists who read The Economist. But the Scandinavian experience is too unusual to offer much guidance to the United States (or the U.K., for that matter).
As Joseph Schwartz points out, the Economist piece presents a considerably “sanitized” account of the Scandinavian economies. Even after significant cuts, Nordic governments still spend about half of their GDP, just a bit less than the U.S. spent at the peak of the Second World War. It’s true that the Scandinavians have impressively low debt and responsible fiscal policies. But that’s because their citizens take on a considerably higher tax burden than Americans are willing to accept.
It’s worth asking, then, why Scandinavians are consistently willing to spend more and pay more than Americans. An important part of the answer is that members of small, homogeneous societies are much more willing to bear the burden of supporting their fellow citizens than members of large, diverse ones.
Schwartz contends that “the publics in these countries trust government because the social democrats built their welfare state upon a vision of comprehensive and universal social rights.” That’s partly true. But it neglects the crucial fact that this vision was achieved in societies where the vast majority of the population looked the same, talked the same, had names and relatives in common, went to same churches, and so on.
As the political scientist Robert Putnam has found (behind paywall), increased diversity tends to decrease social trust and willingness to make sacrifices for others. And that’s just what’s happened as the generous North has experienced its first encounter with mass immigration, as The Economist obliquely acknowledges.
Other lessons of the Scandinavian model are similarly mixed. For example, the Nordic countries have exceptionally high rates of laborforce participation by women. But those rates are made possible, in part, by quota systems that would likely be illegal in the U.S. What’s more, Scandinavian women tend to be concentrated in “mommy-track” and public sector jobs. If there’s a lesson here, in fact, it’s that universal preschool and parental leave are not sufficient conditions of economic equality between the sexes.
The observations aren’t objections to the Scandinavian model as such. Although they are by no means without problems, the Nordic countries have developed political, economic, and social arrangements that seem to work reasonably well for them. But these arrangements, and the conditions to which they respond, are so unusual as to be almost sui generis. While we can always learn from specific policies, attempts to make American politics speak Swedish are a waste of time.