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The Nordic Way: Social Democracy Promotes Individual Autonomy
Contrary to a hostile political culture which hates poor folks and minorities, Nordic countries build social trust and individual freedom. A business case for more equality.
By Sam Pizzigati
This is a review of: The Nordic Way: Shared norms for the new reality. A report prepared for the World Economic Forum in Davos, Switzerland, January 2011.
President Obama has opened 2011 preaching a new gospel: competitiveness. To succeed economically, his argument goes, the United States must become more “competitive.”
So where do we start? How about looking at societies that are already competing quite nicely? Maybe they have lessons to share.
These societies, turns out, do feel they have lessons to share. Better yet, the four nations that rate highest on global “competitiveness” benchmarks seem to be in a sharing mood.
Last month, at the World Economic Forum in Davos, corporate and government leaders from these four nations — Sweden, Norway, Denmark, and Finland — brought a special report that lays out what they feel gives them their distinct competitive edge.
A distinct competitive edge — for Scandinavia? Conservatives all around the world would find this notion ludicrous. They’ve been arguing for years, as this new report wryly notes, that the Nordic economies are going to crash any minute.
In this conservative world view, the Nordic economies represent a compromise between socialism and capitalism that can’t possibly last — since “the costly and unproductive ‘socialist’ elements of the model were bound to overwhelm the productive ‘capitalist’ aspects that had been allowed to remain.”
But the Nordics, contrary to these dire predictions, are doing just fine. They’ve survived the Great Recession much better than the rest of the developed world.
The Nordics also boast budget surpluses and low public debt, not to mention “long-term political stability, transparent institutions, technological adaptability, flexible labor markets, open economies, and high levels of education” — all the elements that business analysts say make for competitive economic success.
The secret to this success? The Nordic business and policy leaders behind the Nordic Way report, a group that includes the chairman of the largest industrial holding company in Northern Europe, brought a somewhat surprising answer to their global corporate and governmental colleagues gathered in Davos.
The Nordic nations, these entrepreneurs and elected leaders maintain, value individualism, so much so that they make sure — through a tightly knit social safety net — that no individual ever has to feel beholden to another.
Individualism, The Nordic Way goes on to argue, “need not lead to social fragmentation, distrust, and short-term maximization of material interests.” Quite the opposite. Individual autonomy can “lead to greater social cohesion if it is done in an egalitarian way.”
And that’s what the Nordic nations have done. Sweden, Norway, Denmark, and Finland all rank among the world’s most equal nations. The resulting social cohesion nurtures a “high degree of trust” — a trust in each other, in the law, in the strong governmental institutions that guarantee the social safety net.
This trust, Nordic business leaders believe, translates into the “systemic advantage” that economists have labeled “low transaction costs.” People who do business in Scandinavia spend less time hassling with lawsuits and paperwork
Critics, The Nordic Way acknowledges, see “political and cultural drawbacks” to the Scandinavian “commitment to personal autonomy, a strong state, and social equality.” Such a commitment, the attack on the Nordics posits, generates “conformity, loneliness, and an intrusive bureaucracy.”
The Nordic Way sees a different Scandinavian reality: societies full of “citizens who feel empowered, accept the demands of modernity, and are willing to make compromises to achieve economic efficiency and rational decision-making.”
The ultimate “take-away” message that Nordic business and government leaders want their peers elsewhere to take to heart?
“In the Nordic countries,” The Nordic Way sums up, “social trust, confidence in state institutions, and relative equality coincide.”
In the United States, this trust, confidence, and equality have gone by the boards. To become “competitive,” we have work to do. A lot.
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