Northern Lights

February 8, 2013 12:42 PM

The Nordic countries are reinventing their model of capitalism
posted by the man of twists and turns (33 comments total)

Splendid soon they can join the other paragons of economic correctness like ireland and iceland and the uk and the us oh wait
posted by Sebmojo at 12:52 PM on February 8, 2013 [4 favorites]

Before the Fox news people show up tooting their horns, lets not forget the 57% marginal tax rate.
posted by Xurando at 12:57 PM on February 8, 2013

All that happiness, literacy, and income equality was a blatant cry for help.
posted by threeants at 1:02 PM on February 8, 2013 [16 favorites]

lets not forget the 57% marginal tax rate

Please expand your comment with what your point is. (honest)
posted by Cosine at 1:06 PM on February 8, 2013

The Nordics’ success depends on their long tradition of good government, which emphasises not only honesty and transparency but also consensus and compromise.

Oh, crap, you have to have a tradition of good government to do this? We're screwed. All we can hope for is "reinventing their model of capitalism" will drag them down to our level....
posted by GenjiandProust at 1:29 PM on February 8, 2013 [2 favorites]

Did you ever try to read the Lonely Planet for your hometown? You may find out that the major attraction is someplace you never visited and that your favourite café is considered to have bland drinks and snooty service. To read this article as a swede is a little like that, but mostly it's just fascinating to get a comprehensive (if conservative) outsider's review. I look forward to the printed full version!
posted by springload at 1:34 PM on February 8, 2013 [5 favorites]

Milt took a deep hit and glanced through the smoke out the window and across the motel parking lot. That bastard Hayek is late again. I guess it is time for the invisible hand. Scandinavian porn it is....
posted by srboisvert at 1:43 PM on February 8, 2013 [9 favorites]

It's remarkable how the world seems to be marching in lockstep in the same direction despite the apparent difference in rationales. The former 'Communist' countries simply had a kleptocratic grabfest by the well-placed the moment the shackes dropped off, Britain and Europe are undergoing Shock Doctrine dismantling of (what's left of) the public sector thanks to the übershenanigans of the finance sector (and their evident impunity), and now the Nordic countries are doing it supposedly proactively, which is at least refreshing if puzzling. I can't help wonder if underneath it all is nothing but pure demographics (e.g aging, immigration, birth-rate differentials and dilution of the remaining monoculture countries below some unspoken threshold of perceived commonality) and the reasons given are just the story we tell ourselves.
posted by George_Spiggott at 1:46 PM on February 8, 2013 [11 favorites]

Srboisvert, please continue this story. I'm tantalized by econ fiction.
posted by quadog at 1:47 PM on February 8, 2013 [1 favorite]

I can't help wonder if underneath it all is nothing but pure demographics...

Knowledge of how to capture government if you control the wealth is not confined to the US.
posted by Mental Wimp at 1:49 PM on February 8, 2013 [1 favorite]

I agree, Mental Wimp, but the only reason we have a public sector anywhere in the first place is because people fought for it. How did they get us to stop fighting for it? I'm thinking demographics and talk radio...
posted by George_Spiggott at 1:54 PM on February 8, 2013 [1 favorite]

It's remarkable how the world seems to be marching in lockstep in the same direction despite the apparent difference in rationales. The former 'Communist' countries simply had a kleptocratic grabfest by the well-placed the moment the shackes dropped off, Britain and Europe are undergoing Shock Doctrine dismantling of (what's left of) the public sector thanks to the übershenanigans of the finance sector (and their evident impunity), and now the Nordic countries are doing it supposedly proactively, which is at least refreshing if puzzling. I can't help wonder if underneath it all is nothing but pure demographics (e.g aging, immigration, birth-rate differentials and dilution of the remaining monoculture countries below some unspoken threshold of perceived commonality) and the reasons given are just the story we tell ourselves.

This doesn't really fit the description given, though.

Sounds like Nordic countries are, above all, pragmatic, and have no (literally) religious connection to the slice of the political spectrum they favor. In contrast to the US, which seems to be the opposite.
posted by 2N2222 at 1:59 PM on February 8, 2013 [1 favorite]

Srboisvert, please continue this story. I'm tantalized by econ fiction.

It involves the invisible hand, lube, and a box of tissues. You can pretty much write it yourself.
posted by spicynuts at 2:05 PM on February 8, 2013 [1 favorite]

I am sad that I am wondering if this is sponsored content. It's pretty obvious when the hardcopy Economist comes with a 16 page center section on what a wonderful place to do business Oman or Singapore is. This could be exactly the same thing but just with a splash more subtlety.
posted by bukvich at 2:19 PM on February 8, 2013 [4 favorites]

Please expand your comment with what your point is. (honest)

The Fox people are going nuts about our 35% marginal tax rate. The only reason this works in nordic countries is the still high tax rates. Maybe not as high they were, but still quite high compared to ours. its not just good governance, it's higher tax rates. Let's visit this story again when the tax rates equal the US.
posted by Xurando at 2:22 PM on February 8, 2013 [3 favorites]

Milt imagined Scandinavian hands that were so soft and delicate like socialist work incentives and their eyes widened like a naive Keynesian when confronted with his runaway inflation. He steadily increased aggregate demand until he heard "protection?". Stagflation! Thinking quickly he turned things around by imagining more money.
posted by srboisvert at 2:38 PM on February 8, 2013 [8 favorites]

H'm, i can't help thinking that they went right because, having gone as far left as they could, politicians had to find something else to do to fill their time with. I mean, if they said 'if it ain't broke don't fix it, let's just elect a treasurer and a caretaker to fix the boiler when it breaks and go home', they'd be out of job wouldn't they?

Also, i've read the most varying reports of their experiments in private education - le monde diplomatique naturally claims it's a disaster - but note that all these developments will tend one way: to increased inequality. Open-mindedness and willingness to try new things, the success of a high % of the population (i mean, most of the talented people coming through, not being undernourished or dropping out of college), trust which fuels willingness to engage in society and have and fund communal things like libraries (low-trust societies stay at home and refuse to fund community gyms), all this comes directly and demonstrably from great social equality. When societies are unequal, they turn inwards, refuse to reach out, become fortress minds, refuse to fund social welfare, blame the poor, focus on crime and immigration as issues... just saying.
posted by maiamaia at 3:11 PM on February 8, 2013 [4 favorites]

That was a whole lotta words on policy without mentioning even in passing that this admirable economic model is built on some of the world's strongest, most forward-thinking and most ambitious climate and energy policies.

Sweden has set a goal of zero emissions by 2050 (and fossil-free transport by 2030). Norway's aiming for net zero as well. Denmark's aiming for a 100-percent renewable energy grid. Malmo and Copenhagen are global leaders in urban sustainability. Helsingborg already fuels its entire municipal bus fleet with biogas made from municipal waste.

All of this is being accomplished in the midst of economic growth and policy reform that even the Economist can dig. As Canadian Parliament rings with the absurd talk of "job-killing carbon taxes" and climate change remains a dirty word in Congress, it seems worth mentioning that this new Scandinavian model is built on some seriously robust climate and energy measures, doncha think?
posted by gompa at 3:12 PM on February 8, 2013 [16 favorites]

Also, it's the economist which, after a tribe fought to not be kicked off their land by the state - remember tribes are untouchable in india, at the bottom of the caste system, and with in this case few legal rights to their ancestral lands, so only a few people were receiving a pittance in compensation and they were supposed to be happy to head for the nearest city's slum - i'd read the day before how tata steal had hired a local squad of thugs to harrass, intimidate and break up protests, which they had done, including the gang rape, torture and murder of one teenage girl and other crimes - the day after this the Economist had an article about how it was a terrible shame that indians didn't have a clue that the modernisation of their country required this, they'd never be prosperous without it, they were stuck in the past, the economist hoped Tata Steel soon succeeded in getting the land, it was a pity the local government had been intimidated by the protests.. since then i can't take anything i read in the economist seriously. And i read a lot of hard-right stuff, as i know i need to counterbalance the soppy-hippy-leftist nonsense.
posted by maiamaia at 3:16 PM on February 8, 2013 [3 favorites]

We seriously need more economist slash fic [blurbs] posted in economics thread, probably threads about politicians need slash fic too.
posted by jeffburdges at 3:18 PM on February 8, 2013

George Spiggott: It could be that we are heading towards the demographic threshold you speak of, but that hasn't been the reason for Sweden to move in the direction it has done. For us it started by a crisis in the early 90:s, which we had to save our way out of. In recent years, the political landscape has shifted a bit, but it's still more pragmatic issues that restrains government spending on welfare.

Global competition is an issue, and a country cannot be perceived as too unfriendly to its big companies, lest they move their headquarters abroad. Sweden has relied heavily on a few big companies (Ericsson, Volvo, Saab, ABB, Astra and a few more), and they are facing much harsher times now than ten years ago. Back then it was easier to compete on technological advantage, with less regard to the price.

There are some tendencies along the lines you speak of though. It's possible that the actual influx of immigrants steers the general political attitude in new directions, but that would be a long-term thing. The biggest change right now seems to happen in the common attitude to immigration/integration. It's "fuck you, I won't share", but not with respect to the whole society. The "fuck you" is directed specifically to immigrants. The rest of Europe went in this direction some time ago, and we unfortunately don't seem able to stave it off any longer.
posted by springload at 3:22 PM on February 8, 2013 [3 favorites]

NB dear ManofTwists&Turns: i mock the article, but i'm glad you posted it as it's interesting to know this! (worried have been exceptionally rude)
posted by maiamaia at 3:24 PM on February 8, 2013

The thing is, if any of these changes don't work, we can trust Scandinavian governments to switch back. It's not that experimenting a little bit with the market is wrong, it's market dogmatism that's wrong. The market can do wonderful things, but it can also do awful things. It's the role of government to free one and muzzle the other, not let both run away freehanded.
posted by Jehan at 3:24 PM on February 8, 2013 [1 favorite]

“When liberty is mentioned, we must always be careful to observe whether it is not really the assertion of private interests which is thereby designated.”
― Georg Wilhelm Friedrich Hegel
posted by hank at 3:30 PM on February 8, 2013 [5 favorites]

I can't help wonder if underneath it all is nothing but pure demographics (e.g aging, immigration, birth-rate differentials and dilution of the remaining monoculture countries below some unspoken threshold of perceived commonality) and the reasons given are just the story we tell ourselves.

I was thinking if increasing racial diversity in these states had anything to do with an increasing taste for smaller government and more free market tools within traditionally government driven sectors. People may longer be able to relate to the beneficiaries of state programs if they don't look or sound the same as they do.

Nordic are traditionally very participative societies - where the individual is expected to really contribute and be part of local institutions. I wonder if this shift in "capitialism" reflects an estrangment by the older generation from a new and more diverse younger generation coming up through society.
posted by helmutdog at 3:33 PM on February 8, 2013

To clarify in what sense the cutdowns are pragmatic: You cannot win any votes in Sweden by pointing to high taxes and saying it's unfair that people don't get to keep the money they make. The rethoric is all about what's good for the country and what would lower the level of unemployment.

The present right-flange coalition government largely retains support because it does similar things as the Social Democrats would, but right now they are perceived as doing it better. That in itself is the major change that has happened in Swedish politics: The Social Democrats ruled for most of the 20:th century. They where The Government Party, and anyone else who got the chance to try was swiftly kicked out. Now they have been torn from within almost to the point of implosion, and plummeted spectacularly in the polls. They remain the biggest party but only barely so, and the right flange looks to many like the more responsible one. That's a huge change over the last few years.
posted by springload at 3:36 PM on February 8, 2013 [1 favorite]

I'm glad the Swedes are being held up as a positive example. One of my best friends is Swedish and he's been telling me for years and years how great it is. He's a left wing lunatic (like me) though, so I'm not sure he'd be happy about this particular view of things.

However, that article is really shockingly disingenuous, in a way that I expect Fox News to be but I do not expect the Economist to be. One of the things I appreciate about the Economist is that they usually wear their biases pretty openly on their sleeves.

The article talks about how Swedish public spending is falling, but all of their comparisons are to 1993, immediately after the Swedish banking crisis of 1991-2.

The graph toward the bottom, of Sweden's government spending as a percentage of GDP, is perhaps supposed to give the impression that the Swedish government was on a drunken binge of growing spending before they sobered up in ~1993 and got on the narrow path to fiscal responsibility.

Not so. The government stepped in and nationalized the banks, costing a huge amount of money initially. Eventually, the banks were re-privatized at a profit to the state, but that took years---in 1993, the Swedish government had just spent all the money on the banking crisis and hadn't seen any of it back yet. If you take out the effect of the banking crisis, you see a fall in public spending, sure, but it's a gentle decline, not the dramatic drop depicted in the article.

Choosing that date for the comparisons... it's like picking fall 2008 in the US and pretending that that was a totally normal, typical time in the US economy.
posted by ngc4486 at 3:48 PM on February 8, 2013 [16 favorites]

remember tribes are untouchable in india, at the bottom of the caste system

Nope, more like the scheduled tribes aren't part of the traditional jati reckoning in the first place. They're outside the societal mainstream; in many cases, civilization had made contact with them only in the last 100 or so years. Its a bit more complex than 'merely' being untouchable.
posted by the cydonian at 4:52 PM on February 8, 2013 [1 favorite]

However, that article is really shockingly disingenuous, in a way that I expect Fox News to be but I do not expect the Economist to be.

I'm afraid the Economist has always had quite a strong and explicit agenda. Usually they are a bit more intelligent about serving it than this, but the magazine has always been committed to supporting what it calls a nineteenth century idea of free markets. This is an ideological lens that the Economist uses to approach every problem and every situation; it determines the whole standpoint and agenda of everything it publishes.

If it ever has the opportunity to praise a state or country for what it sees as "free market" reforms, it will do so. The result is that it spends a lot of time talking about how this or that area is going to be the next big thing, on the grounds that it is shrinking government, getting rid of unions, removing regulations etc. etc.

This seldom works as well as the Economist would like, probably because some of their predictions are based on statistical shenanigans like the ones you describe, and partly, I suspect, because a one-size-fits-all answer usually fits nobody. But by that time, the Economist has already moved on to praising somewhere else.
posted by lucien_reeve at 1:07 AM on February 9, 2013 [1 favorite]

I'm afraid the Economist has always had quite a strong and explicit agenda. Usually they are a bit more intelligent about serving it than this, but the magazine has always been committed to supporting what it calls a nineteenth century idea of free markets. This is an ideological lens that the Economist uses to approach every problem and every situation; it determines the whole standpoint and agenda of everything it publishes.

Quite so---I didn't praise them for being unbiased, just for being completely transparent about their biases. Their slant is very strong, but that's easy to figure out because they tell you over and over again. There's no facade of "fair and balanced" neutrality.
posted by ngc4486 at 2:00 AM on February 9, 2013

How did they get us to stop fighting for it? I'm thinking demographics and talk radio...

Comfort and laziness.
posted by bongo_x at 10:29 AM on February 9, 2013

helmutdog, I am still not sure how I feel about your comment. I lived in Finland for a couple of years recently, as an obvious foreign looking person.
posted by infini at 2:43 PM on February 9, 2013

As far as I can recall, it seemed as though it was language and culture that made you in or out, not ethnicity per se. You could be blue or purple with pink polka dots in Finland if you spoke the language and were part of the cohorts growing up together in schools and the national service if a male. It was more challenging for the groups of refugees who were settled there with little or no orientation into local culture as interpreted in the context of their own religion and culture.

News articles show the Finnish authorities are working on smoothening this friction.
posted by infini at 2:44 AM on February 10, 2013