In the never-ending debate that rages in the comments section of Bacon’s Rebellion, defenders of an extensive welfare state often refer to the success of the Nordic countries — Sweden, Denmark, Finland and Norway — as proof that the United States “blue state” governance model can succeed. The Nordics combine high state spending, high taxes, generous welfare benefits and leading-edge green environmental policies with a high standard of living. The Nordics have among the highest per capita incomes of any country in the world, they have low levels of income inequality, and they rank among the highest countries globally in surveys of happiness. Liberal icons from President Barack Obama and economist Paul Krugman wonder, why can’t America be more like Sweden?
The key to Scandinavian success, according to Kima Sanandaji, Kurdish-Iranian by ethnic origin who migrated as a child to Sweden, is that the Nordic countries are small, socially cohesive societies with shared values well adopted to a mixed capitalist-socialist economy. As Sanandaji writes in his book, “Debunking Utopia,” “High levels of trust, a strong work ethic, civic participation, social cohesion, personal responsibility, and families values are long-standing features of Nordic society that predate the welfare state.”
Believers in expansive government visualize look to Sweden and Denmark as examples of how their policies would turn out. But why not to Greece or Venezuela? The outcome of the socialist experiment, Sanandaji argues, depends largely upon the cultural setting in which it takes place.
There are a number of points people should bear in mind when they hold up Nordic countries as examples for America to emulate.
- The Nordic Four experienced their strongest economic growth in the century before World War I, by which time they had become among the most affluent countries in the world. Their rate of economic growth slowed as they embraced moderate socialism, and then slowed even more as they committed heavily to the socialist model between 1970 and 1990. In response to economic stagnation, all four countries have dialed back the size and scope of government since their socialist heyday.
- While the Nordics still maintain generous welfare states (though less generous than before), they embrace free market principles for their economies, exposing their corporations to global competition. Their economies rate among the most “free” in the world.
- As evidence that culture is a driving force behind Scandinavian success, immigrants from the Nordic countries are among the most prosperous ethnic groups in the United States. They share many of the same cultural characteristics as their Scandinavian cousins. Not surprisingly, Americans of Nordic descent have even higher incomes on average than their Scandinavian counterparts, but comparably low rates of poverty and social dysfunction.
- The Nordic countries have experimented with extending their welfare-state model to minorities, mainly from the Middle East, and it hasn’t worked — indeed it has fared so poorly that the Nordic nations are experiencing a backlash against immigrants. Over the past couple of decades, ethnic minorities in all four countries, Sweden most prominently, have gotten caught in the welfare trap. Having difficulty assimilating to Nordic society, they experience high levels of unemployment, poverty, crime and discontent. The same ethnicities fare better in the United States.
“Social outcomes are to a large extent determined by the choices that people make, which in turn is influenced by culture,” writes Sanandaji. “A country cannot just copy the policies of another country and hope to gain the same social outcomes.”
As an example, he points to life expectancy. Critics of the U.S. health care system point to the higher life expectancy of the Nordic countries with their systems of socialized medicine. But the health of Nordic peoples can be traced in good measure to their healthy lifestyles.
“Instead of trying to copy Nordic policies, why not copy their health lifestyles,” he asks. “Wouldn’t Americans be healthier if they exercised more, took hikes in nature, walked to the store on occasion (as Nordic people often do) instead of driving, and ate less junk food and more fish? … Perhaps some Americans would like to continue having an unsound diet and hope that Nordic-style social democracy can improve their health. I very much doubt that would be the case.”