In the United States, over the past decades, we have experienced growing income inequality and the undermining of our once stable middle class. Because our winner-take-all form of capitalism has been so destructive, and so corrupting of our politicians and our government, it may be time to explore other options. The more humane and economically successful capitalist models found in the Nordic countries—Finland, Norway, Iceland, Denmark and Sweden—could be a viable alternative to what we have now.
In the World Economic Forum’s global competitiveness index, the Nordic countries are almost always found at or near the top. The Organization for Economic Co-operation and Development’s (OECD) Better Life Index, which takes into account broader indicators such as income, environment, health, jobs, work/life balance, community, and life satisfaction, ranks the Nordic countries among the top ten “happiest” countries. So what are they doing right?
Are the Nordic countries socialist?
I’ve often thought of the Nordic countries as some kind of hybrid of socialism and capitalism, but, it turns out, they are not particularly leftist or interested in socializing their economies. Their reality is more complicated. According to a World Economic Forum publication, a combination of extreme individualism, a strong welfare state, adherence to the rule of law, low levels of corruption, gender equality, and broad social trust have shaped the successful market economies of Northern Europe.
Another publication “The Nordic Model” lists additional attributes:
▪ An elaborate social safety net in addition to free education and universal healthcare.
▪ Strong property rights, contract enforcement, and overall ease of doing business.
▪ Public pension schemes.
▪ Low barriers to free trade.
▪ Little product market regulation.
▪ High degrees of labour union membership.
▪ Overall tax burden among the world’s highest.
Unlike Americans who have been indoctrinated by the right to see government as “the problem,” the Nordic cultures embrace a strong government. For them, its main purpose is to ensure equality for every individual. The Nordics have a strong sense of social solidarity and yet, paradoxically, they have what Americans might view as a radical concept of individual freedom. Although they have strong welfare states, they are not collectivists. The state exists to serve and support the individual, not the other way around.
In an article titled “Social trust and radical individualism,” authors Henrik Berggren and lars Trägårdh write about the intense and unique individualism in Nordic cultures:
This emphasis on social solidarity hides the strong, not to say extreme, individualism that defines social relations and political institutions in the Nordic countries. Indeed, it is precisely the fundamental harmony between the Nordic social contract and the basic principles of the market–that the basic unit of society is the individual and a central purpose of policy should be to maximize individual autonomy and social mobility–that we see as the key to the vitality of Nordic capitalism.
The authors attribute their culture’s economic and social success to emancipation from the heavy-handed control of the patriarchal family and traditional religion.
Though the path hasn’t always been straight, one can discern over the course of the twentieth century an overarching ambition in the Nordic countries not to socialize the economy but to liberate the individual citizen from all forms of subordination and dependency within the family and in civil society: the poor from charity, the workers from their employers, wives from their husbands, children from parents— and vice versa when the parents become elderly. In practice, the primacy of individual autonomy has been institutionalized through a plethora of laws and policies affecting Nordics in matters minute and mundane as well as large and dramatic. Interdependency within the family has been minimized through individual taxation of spouses, family law reforms have revoked obligations to support elderly parents, more or less universal day care makes it possible for women to work, student loans without means test in relation to the incomes of parents or spouse give young adults a large degree of autonomy in relation to their families, children are given a more independent status through the abolition of corporal punishment and a strong emphasis on children’s rights.
All in all this legislation has made the Nordic countries into the least family-dependent and most individualized societies on the face of the earth. To be sure, the family remains a central social institution in the Nordic countries, but it too is infused with the same moral logic stressing autonomy and equality. The ideal family is made up of adults who work and are not financially dependent on the other, and children who are encouraged to be as independent as early as possible. Rather than undermining “family values” this could be interpreted as a modernization of the family as a social institution.
Three attributes of the Nordic model
- Nordic capitalism shows that individualism need not lead to social fragmentation, distrust and short-term maximization of material interests. Promoting individual autonomy through policy can, on the contrary, lead to greater social cohesion if it is done in an egalitarian way. Less dependence and weaker patriarchal structures means that more people feel empowered and satisfied with their lives. This is especially relevant for women, who want to participate in the labor market without relinquishing the possibility of becoming mothers.
- Nordic capitalism also demonstrates the systemic advantage of having a positive view of the state, not just as an ally of the weak but as the promoter of ideals of equality and individual autonomy. . . . In the Nordic countries social trust, confidence in state institutions and relative equality coincide.
- A strong state and individual autonomy are not a threat to civil society, but are instead its prerequisites. Citizens who join together not mainly to protect themselves from arbitrary abuse by vested state or business interests but rather to increase their potential for self-realization and personal independence are more likely to make positive contributions to society as a whole.
As I read the above, my first thought is that the Nordic countries sound more grown up than the Unites States. The Swiss psychologist Carl Jung saw individuation as the primary task of psychological development. In other words, eventually, to be healthy, one has to become fully one’s own person, free of subordination to family, religion or society. Collectively, the Nordic cultures seem to have taken Jung to heart. Yet they acknowledge, and rightly so, that even fully individuated human beings need social support, and better yet, a social safety net, to be both happy and free.
There is no perfect culture, but the Nordic countries seem to have found a way to live that consistently places them at the top of everyone’s list. Whether the topic is economic success, sustainability, individual freedom or happiness, they give us much to think about as we contemplate the future of the United States.