May 11, 2014


Nordic cuddly capitalism: Utopia, no. But a global model for equity : The cuddly capitalism of the Nordic nations provides an economic equity that makes a middle class lifestyle the norm, where the sharp edges of worry about the cost of health care, elder care, child care, and education simply don't exist. But is it a sustainable model for anyone but the pragmatic North? (Sara Miller Llana, May 11, 2014, CS Monitor)

To crystallize the Nordic experience, most casual visitors would start with a relentless quest for security, in all forms and nuances: private and public, economic and social. Long, dark winter days - often punctuated by harsh winds - have something to do with it, as citizens of these resilient lands could not endure without looking after one another.

Uffe Ƙstergaard, a history professor at the Copenhagen Business School, traces the Nordic welfare state to the Lutheran Church "universalist" practices of delivering public goods to the population. (He cites a Danish church ordinance from 1539 stating that "children shall be taught properly [and] schools and the poor shall have their food.") Danish political scientist Gert T. Svendsen reaches further back to the Vikings, who shifted from "roving to stationary banditry" around the 10th century, focusing on security for the community around them. 

As far back as scholars can trace it, the Nordics overwhelmingly strove for social safety. [...]

[T]he success of various industries here has most to do with the fact that Sweden and other Nordic countries have always been, despite their big states, zealous free-marketeers. Markus Uvell, president of the free-market think tank Timbro, says foreigners, especially Americans, often ask him how the country's business success coexists with its big-state mentality. His answer: the country's uncontested embrace of an open economy. "That has never been challenged." 

Nordic social reformers - as early as the 1930s - were genuine in their ambition to marry government stimuli and social solidarity on the one hand with open trade and private entrepreneurship on the other. It was the only way to grow their economies and continue paying for their welfare states.

And as such, Nordics have defied the conventional wisdom that a big state precludes big winners. According to the Global Innovation Index, a composite measure of things such as infrastructure, market sophistication, business environment, and technological and creative output, Sweden ranks No. 2 worldwide (behind Switzerland), with Finland and Denmark (and the US) in the top 10. 

Not only is big state good for innovation, but innovation is also a boon for the welfare state.

Posted by at May 11, 2014 12:45 PM

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