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For Real Democrats: Macron And The Nordic Model
There is a particular combination of market and political regulation that delivers the highest degree of human well-being, the Nordic model. New French president Macron is for it. Also, Amartya Sen
By Bo Rothstein
Emmanuel Macron’s political success has surprised many political commentators. The fact that in a large country like France with long-standing political traditions and within a very brief period he has succeeded in building a whole new political movement outside the traditional parties and then getting two thirds of the votes cast in a presidential election is a unique, not to say historic, political achievement. There are, of course, many explanations for this such as the split on the left and the traditional conservative presidential candidate’s shady dealings with public money. Much has also been written about Macron’s interesting personality and his charisma. Individuals certainly do play a role in history, but there is an argument for going beyond this superficial level and instead look more closely at Macron’s policies and his election program.
Since the breakthrough of industrialism in the late 19th century, the western world has tested a number of different socio-economic systems. We have seen variations of authoritarian communism in the former Soviet Union and the states under its domination. We have also seen both democratic conservatism (Germany, Austria, Switzerland) and the more authoritarian Catholic types of conservatism (Spain under Franco, Portugal under Salazar). We have also experienced Italian and German fascism and other forms of authoritarian rule. We have been able to study the more state-directed social democracy in countries such as Britain and Sweden until the 1970s and then different forms of neoliberalism in countries such as the United States and the United Kingdom.
Can we say today which of these social systems is ‘best’. This can of course be seen as a matter of ideological convictions, but there are also other ways to think about this issue. One of these has been presented by Amartya Sen, one of the world’s most well-known social scientists. His idea of justice is, very simplified, that we should organize society so that people are given the opportunity to realize their own life projects. Simply put, everyone cannot become ballet dancers, NHL hockey players or political science professors, but if you have ambition and talent for these tasks, then society should give you the capabilities that will enable you to realize them. The advantage of this theory is that it does not prescribe in a paternalistic way how people should live their lives but instead works to provide them with the actual capabilities enabling them to realize their own life projects.
In reality, this is about things like general and free education as well as health care. In addition, there are important things like legal capacity, social security and, of course, the political freedoms we associate with democracy. A child who dies soon after birth can of course not realize any life projects, but children who do not receive adequate education or health care, who lack access to clean water and who live in severe poverty, are also deprived of the capabilities Sen’s theory focuses on. His theory has had a great practical influence, especially when the UN drew up its measurement of human well-being. His thinking has also influenced many other research institutions that focus on ranking countries on other dimensions such as gender equality, environmental protection, social trust, the rule-of-law and the absence of corruption. Here, interestingly, sophisticated empirical research based on large amounts of data meets with philosophical questions about social justice and what is ‘the good life’.
A central question is of course whether this type of research has succeeded in responding to the question which of the above-mentioned socio-economic orders best serves to realize the Sens theory of social justice. The answer to that question is, in my opinion, a ‘yes’ and this is what we call ‘the Nordic model’. It is a society that, on the one hand, adheres to the principles of a market economy such as competition, free trade, openness and innovation. But it is, on the other hand, a society that does not have a naive belief that markets are self-regulatory and that politics should be about counteracting public regulation. On the contrary, these societies are working to regulate market mechanisms in a variety of ways so as not to result in monopoly, unfair profits, difficult environmental problems and corruption.
The highly respected Harvard academic Dani Rodrik has expressed this well. In order to function, markets need to be surrounded by a large set of institutions that not only guarantee legal rights but also counteract corruption and fraud. There must also be institutions that mitigate the social risks and social conflicts that market economies tend to create. Rodrik also put forward the importance of various informal institutions that create social trust and increase the ability to cooperate in society. In short, in order to work well in creating human welfare, the market economy needs a fairly extensive public system of regulation and institutional checks.
Macron’s policy is entirely in line with this model. He does not share the French Socialist Party’s (and now also its British sister party’s) strong anti-market ideology. But he is not a neo-liberal who wants to scrap France’s social policy system. On the contrary, he wants to invest in a labor market policy on typically Nordic lines, where one wants to give a second chance to those who lose their jobs due to globalization. He also wants to increase political efforts in areas such as health care, climate change and culture.
For a very long time, the political struggle has stood between one ideology that hailed the market as the solution to almost every problem and that put emphasis on deregulation and privatization. On the other side, the traditional left, not least in France, has seen the market as the incarnation of all things evil. Research on what creates the greatest degree of human well-being now provides a different and fairly clear answer to which model performs best. Namely, that there is a particular combination of market and political regulation that delivers the highest degree of human well-being. This and the choice of Macron can indicate that we are facing a new political shift in history. If the meaning of democracy is the realization of the ‘will of the people’ it is reasonable to think that this ought to result in better living conditions for the people.
It is now clear that, from the many societal models that have been tried since the breakthrough of industrialism, social research can point to a winner in terms of human well-being and this is the Nordic model that Macron promotes. It should be underlined that this model has been supported by both Social Democratic and Center-Right governments in all the Nordic countries during the last two decades. This implies that the dismissal of both the traditional political right and left, which has been Macron’s signature in the French elections, should not necessarily be seen as merely a clever political tactic. Rather, it can be seen as a sign that the traditional right-left dimension based on the idea of seeing market versus state as a zero-sum game has begun to fade away.
First published in Swedish by Dagens Nyheter. Bo Rothstein is a professor of Government and Public Policy, Blavatnik School of Government and Fellow at Nuffield College, University of Oxford. This appeared at Social Europe.
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