Question

You are giving a brief speech to your campus community titled “Lessons From Scandinavian Social Democracies.” Draft this speech, with an emphasis on what we in the US can learn from other political systems. Identify important strengths and/or drawback in the Nordic model.

Answer 1

During this presidential campaign season, Scandinavia’s democratic socialism has had something of a starring role in Democratic discussions. In the debate on October 13, U.S. presidential candidate Bernie Sanders extolled the virtues of Europe’s north: “We should look to countries like Denmark, like Sweden and Norway,” he argued, “and learn from what they have accomplished for their working people.” Sanders’ paean elicited a flat rebuke from Hillary Clinton: “We are not Denmark.” In truth, there are many things that the United States can learn from Scandinavia, but not what Sanders implies.

Scandinavian countries call themselves foregangslande, or pioneers, and they have much to show in terms of forward-looking and innovative policy. Most everyone is familiar with the progressive ideas—from gender equality, universal health care, and energy sustainability—that have turned the region into a model for Bernie Sanderses everywhere.

Democratic socialism means collective ownership of the economy by democtratic means. This type of the most aware and most effective cooperation never yet existed, as even when the ownership of the economy was taken from landlords and other elites, democracy had no chance to develop due to initial conditions of mass poverty, illiteracy, war destruction etc etc.

Social democracy is a type of government that tries to give capitalism a more decent face. So most of the economy is still owned and managed privately therefore undemocratically but the government tries to effect fairer redistribution usually by progressive taxation. Periodically it can be successful avoiding social instability that is the innate characteristic of capitalism, but the inevitable economic crises that also characterise capitalism, tend to crawl back most gains from the lower classes.

So Scandinavian could be called apparently a “social democracy” . Instead of looking at the words used to describe it, let’s enter into the concept:

a) A government oriented towards a welfare state (public schools up to and including university studies, mostly free or cheap, state-run health care, child care, basic housing for the disenfranchised), where the community looks after its members, especially the less fortunate;

b) A mixed economy consisting of a well-regulated market base (with successful and wealthy private companies) and also public-owned companies (oil is basically state-owned in Norway; in Sweden the government owns companies from pharmaceutical retailing to logistics companies, mining, airports, trains and electricity; in Finland it’s anything from alcoholic beverages to the railroads and IT services or airports, and so on),

c) Progressive taxation which is used to fund the welfare state (in Sweden and Denmark, the highest income bracket is taxed just above 60%);

d) Freedoms and rights for all (women’s rights, ethnic minorities, etc.);

e) Governments closely supervised by the electorate.

The Nordic model is very discussed topic around the world.

Let’s start with the pros:

1) Social mobility. There is much more social mobility in Nordic countries than in many other places around the world. As already mentioned, despite all the talk about the American dream, it is still more common to go from rags to riches in the Nordic Countries than in the US.

2) Less poverty. Or at least it is not that visible. There really isn’t homelessness in the Nordic Countries and extreme poverty is very minimal. There is “good” social security and everybody is been taken care of. However, some people use this system wrong, and the money goes to wrong people. Luckily this is about to change. There’s no danger that the economic inequality could lead to political instability.

3) Equality. Everybody gets the basic public services such as education, healthcare and so on. There is very little corruption, so the rich people cannot buy their way out, if they break the law. You don’t necessarily win in court just by hiring the best lawyers.

4) Politics. This one is unfortunately challenged by Sweden democrats party, True Finns party and other such far-rightist fascist parties, but the situation is still far from the US or the UK.

In the Nordic Countries political parties can usually work together and accept and tolerate others’ opinions. This means less divided society. There is a strong multi-party system. For example in Finland we have Social Democrats, Coalition, Centre, Greens and so on. Parties work together for common good, instead of being divided. This leads to more tolerance. I hope the recent nationalistic backlashes are temporary.

5) Security. This is the sum of many things including some of those I already listed above. There is very safe in the Nordic Countries. Gun laws are strict, so there aren’t many mass shootings. Police fires a gun very rarely. There aren’t large criminal organizations. You can basicly feel safe when walking in the streets.

Note that the Nordic Countries have achieved this without hiring a massive amount of law enforcement personnel. There are less than 7000 police officers in Finland and yet it is the safest country on Earth. Compare that to Singapore with more than 40,000 police officers (it is also one of the safest places).

Well what about the cons then:

1) Taxation. This is obviously the first that comes to my mind. Although there is higher billionaire density in Nordic Countries than in the US, taxes might still be very harmful and annoying for personal finance, especially if you know your tax money is used in completely wrong things. Because of taxation, it is very hard to become rich only by working for others. Wealthy yes, but not really rich. However, corporate taxation is not high at all and therefore it’s relatively easy to start a company. But still the whole taxation system would need more flexibility.

2) Salaries. The salaries are much lower here than in the US. At least if you are in the top 1% in your industry. Of course entrepreneurs, corporate leaders and some financial professionals earn a lot, but doctors, software engineers, scientists… not so. Almost every millionaire here is an entrepreneur. Million-dollar salaries are rare. For example I doubt there is a single software engineer that earns $1M/year. Low salaries and high taxation is really not a good combination.

However, low salaries have some pros too. For example companies benefit when they don’t have to pay so much to employees. This means they can make more profit and it’s easier for start-ups to hire employees.

Plus, low paying salaries aren’t that low. There is less income inequality gap in the Nordic Countries than in the US. Cleaners, bus drivers, industrial workers, etc. don’t earn too little. So poor people don’t have to work several jobs at the same time.

3) Socialism. Well not actual socialism, but the government has much influence in the economy. Many of the key industries are not liberalized — they are state-owned monopolies, and therefore there’s a lot of inefficiency. If these industries were liberalized and private companies could join the competition, many state-owned entreprises would go bankrupt. Many economists think that liberalizing the markets would improve the economy as a whole.

4) Social security. Some countries, such as Sweden, have responded to this problem, but some, like Finland, haven’t. Social security should not be paid to people that are not willing to find jobs. Nor should it be paid to drug addicts or drunkards who just use the money to buy more cocaine or booze. This encourages laziness and the tax money goes to wrong things. Then the government has to take debt to pay social security to those who actually need it, and the whole economy suffers.

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