Nordic model

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{{about|the social and economic model in northern Europe|the socioeconomic model in continental Europe, and Germany in particular|Rhenish model|the political ideology often associated with the Nordic model|Social democracy}}{{EngvarB|date=March 2019}}{{Economic systems sidebar|by model}}The Nordic model comprises the economic and social policies, as well as typical cultural practices, common to the Nordic countries (Denmark, Iceland, Finland, Norway, and Sweden).JOURNAL, Simon, Carsta, 2017-12-20, Why Norwegians Don't Have Their Pigs in the Forest: Enlightening the Nordic Art of 'Co-operation', Behavior and Social Issues, 26, 172, 10.5210/bsi.v26i0.7317, 1064-9506, This includes a comprehensive welfare state and multi-level collective bargaining,Anders Kjellberg (2019) "Sweden: collective bargaining under the industry norm", in Torsten Müller & Kurt Vandaele & Jeremy Waddington (eds.) Collective bargaining in Europe: towards an endgame, European Trade Union Institute (ETUI) Brussels 2019. Vol. III (pp. 583–604) with a high percentage of the workforce unionised, while being based on the economic foundations of free market capitalism.JOURNAL, Anders, Bruhn, Anders, Kjellberg, Åke, Sandberg, 2013,weblink A New World of Work Challenging Swedish Unions, Åke, Sandberg, Stockholm, 126–86, WEB,weblink The surprising ingredients of Swedish success – free markets and social cohesion, June 25, 2013, Institute of Economic Affairs, January 15, 2014, WEB,weblink The Nordic Model: Pros and Cons, June 25, 2013, James E. McWhinney, Investopedia, September 16, 2015, The Nordic model is a term coined to capture the unique combination of free market capitalism and social benefits that have given rise to a society that enjoys a host of top-quality services, including free education and free healthcare, as well as generous, guaranteed pension payments for retirees. These benefits are funded by taxpayers and administered by the government for the benefit of all citizens., The Nordic model began to gain attention after World War II.WEB,weblink Constructing Nordic welfare?, BOOK, Revisiting the Nordic Model: Evidence on Recent Macroeconomic Performance, Sachs, Jeffrey, 2006, Center for Capitalism & Society, Venice Summer Institute, First, like the Anglo-Saxon economies, the Nordic economies are overwhelmingly private-sector owned, open to trade, and oriented to international markets. Financial, labor, and product market forces operate powerfully throughout non-state sector. In short, these are capitalist economies...Second, there is no single Nordic model, and still less, an unchanging Nordic model. What has been consistently true for decades is a high level of public social outlays as a share of national income, and a sustained commitment to social insurance and redistributive social support for the poor, disabled, and otherwise vulnerable parts of the population., 10.7551/mitpress/9780262015318.003.0012, Perspectives on the Performance of the Continental Economies, 387–412, 9780262015318,, The Scandinavian countries were all monarchies, with Finland and Iceland becoming republics in the 20th century. Currently, the Nordic countries have been described as being highly democratic. Although there are significant differences among the Nordic countries, they all have some common traits. These include support for a universalist welfare state aimed specifically at enhancing individual autonomy and promoting social mobility; a corporatist system involving a tripartite arrangement where representatives of labour and employers negotiate wages and labour market policy mediated by the government;BOOK, Hicks, Alexander, Social democracy and Welfare Capitalism: A century of Income Security Politics, Cornell University Press, January 20, 2000, 978-0801485565, 130, By the late 1950s, labor had been incorporated alongside Swedish business in fully elaborated corporatist institutions of collective bargaining and policy making, public as well as private, supply-side (as for labour training) as well as demand side (e.g., Keynesian). During the 1950s and 1960s, similar neocorpratist institutions developed in Denmark and Norway, in Austria and the Netherlands, and somewhat later, in Belgium and Finland., and a commitment to private ownership (with some caveats), a mixed economyNEWS,weblink What the Nordic mixed economy can teach today's new left., August 28, 2018, Martin Sandbu, Financial Times, and free trade.WEB,weblink The Nordic Model: Pros and Cons, June 25, 2013, James E. McWhinney, Investopedia, September 16, 2015, The model is underpinned by a capitalist economy that encourages creative destruction. While the laws make it is easy for companies to shed workers and implement transformative business models, employees are supported by generous social welfare programs., Each of the Nordic countries has its own economic and social models, sometimes with large differences from its neighbours.BOOK, Social Democratic America, Kenworthy, Lane, Lane Kenworthy, 3 December 2013, 9780199322527, Oxford University Press,weblink 138, US, As of 2018, all of the Nordic countries rank highly on the Inequality-adjusted HDI and the Global Peace Index. In 2019, all five of the Nordic countries ranked in the top 10 on the World Happiness Report.NEWS, Conley, Julia, March 20, 2019
url= Dreams >location=, March 31, 2019,


File:Nordiske-flag.jpg|thumb|225px|Flags of the Nordic countries from left to right: Finland, Iceland, Norway, Sweden and DenmarkDenmark"Embracing globalization and sharing risks" characterises the Nordic model as follows:BOOK, The Nordic Model: Embracing globalization and sharing risks,weblink PDF, Torben M., Andersen, Bengt, Holmström, Seppo, Honkapohja, Sixten, Korkman, Hans Tson, Söderström, Juhana, Vartiainen, Taloustieto Oy, 978-951-628-468-5, Yliopistopaino, Helsinki, 2007, 26 July 2016,
  • An elaborate social safety net, in addition to public services such as free education and universal healthcare in a largely tax-funded system.WEB,weblink Healthcare in Sweden, 2015-06-12,
  • Strong property rights, contract enforcement and overall ease of doing business.WEB,weblink Economy Rankings, The World Bank Group, Doing Business, 2016, 26 July 2016,
  • Public pension plans.
  • Free trade combined with collective risk sharing (social programmes, labour market institutions) which has provided a form of protection against the risks associated with economic openness.
  • Little product market regulation. Nordic countries rank very high in product market freedom according to OECD rankings.
  • Low levels of corruption. In Transparency International's 2015 Corruption Perceptions Index, Denmark, Finland, Sweden and Norway were ranked among the top 10 least corrupt of the 167 countries evaluated.WEB,weblink Corruption Perceptions Index 2015, Full Table and Rankings, Transparency International, 1 January 2017,
  • High percentage of workers belonging to a labour union.JOURNAL, Anders, Bruhn, Anders, Kjellberg, Ã…ke, Sandberg, 2013,weblink A New World of Work Challenging Swedish Unions, Ã…ke, Sandberg, Stockholm, 126–86, In 2013, labour union density was 88% in Iceland, 69% in Denmark, 67% in Sweden, 66% in Finland and 51% in Norway. In comparison, labour union density was 18% in Germany, 11% in the United States and 8% in France.WEB,weblink Trade Union Density, OECD StatExtracts, Organisation for Economic Co-operation and Development, OECD, 2013, 26 July 2016, The lower union density in Norway is mainly explained by the absence of a Ghent system since 1938. In contrast, Denmark, Finland and Sweden all have union-run unemployment funds.JOURNAL, (Transfer (journal), Transfer: European Review of Labour and Research),weblink pdf, Lund University, 4 April 2006, Anders, Kjellberg, The Swedish unemployment insurance – will the Ghent system survive?, 12, 87–98, 1024-2589, 10.1177/102425890601200109, 26 July 2016,
  • A partnership between employers, trade unions and the government, whereby these social partners negotiate the terms to regulating the workplace among themselves, rather than the terms being imposed by law.WEB,weblink The Nordic Model, Nordic Labour Journal, In focus 2001, 26 July 2016, Anders Kjellberg (2017) weblink" title="">”Self-regulation versus State Regulation in Swedish Industrial Relations” In Mia Rönnmar and Jenny Julén Votinius (eds.) Festskrift till Ann Numhauser-Henning. Lund: Juristförlaget i Lund 2017, pp. 357–383 Sweden has decentralised wage co-ordination while Finland is ranked the least flexible. The changing economic conditions have given rise to fear among workers as well as resistance by trade unions in regards to reforms. At the same time, reforms and favourable economic development seem to have reduced unemployment, which has traditionally been higher. Denmark's Social Democrats managed to push through reforms in 1994 and 1996 (see flexicurity).
  • The United Nations World Happiness Reports show that the happiest nations are concentrated in Northern Europe. The Nordics ranked highest on the metrics of real GDP per capita, healthy life expectancy, having someone to count on, perceived freedom to make life choices, generosity and freedom from corruption.NEWS,weblink The Happiest Countries In The World, Carolyn, Gregoire, 1 August 2015, 10 September 2013, The Huffington Post, 27 July 2016, The Nordic countries place in the top 10 of the World Happiness Report 2018, with Finland and Norway taking the top spots.NEWS,weblink Happiness is on the wane in the US, UN global report finds, Rankin, Jennifer, 20 March 2017, The Guardian, 6 August 2017,
  • The Nordic countries received the highest ranking for protecting workers rights on the International Trade Union Confederation's 2014 Global Rights Index, with Denmark being the only nation to receive a perfect score.NEWS,weblink Where's the worst place to be a worker? Most of the world, David, Wearing, 22 May 2014, The Guardian, 27 July 2016,
  • Sweden at 56.6% of GDP, Denmark at 51.7% and Finland at 48.6% reflect very high public spending.WEB,weblink Index of Economic Freedom, The Heritage Foundation, 2008, dead,weblink" title="">weblink 25 December 2008, 26 July 2016, One key reason for public spending is the large number of public employees. These employees work in various fields including education, healthcare and for the government itself. They often have greater job security and make up around a third of the workforce (more than 38% in Denmark). Public spending in social transfers such as unemployment benefits and early-retirement programmes is high. In 2001, the wage-based unemployment benefits were around 90% of wage in Denmark and 80% in Sweden, compared to 75% in the Netherlands and 60% in Germany. The unemployed were also able to receive benefits several years before reductions, compared to quick benefit reduction in other countries.
  • Public expenditure for health and education is significantly higher in Denmark, Sweden, and Norway in comparison to the OECD average.BOOK,weblink Growing Unequal? Income Distribution and Poverty in OECD Countries, Organisation for Economic Co-operation and Development, OECD, 2008, 233, 10.1787/9789264044197, Keepeek 360, 978-92-64-04418-0, 2019-08-18,
  • Overall tax burdens (as a percentage of GDP) are high: Sweden (44.1%), Denmark (45.9%) and Finland (44.1%).OECD Revenue Statistics:weblink The Nordic countries have relatively flat tax rates, meaning that even those with medium and low incomes are taxed at relatively high levels.WEB,weblink The Nordic model is about more than high taxes – CapX, 15 January 2015, WEB,weblink How Scandinavian Countries Pay for Their Government Spending – Tax Foundation, 10 June 2015,


Labour market policy

{{see also|Social corporatism}}The Nordic countries share active labour market policies as part of a corporatist economic model intended to reduce conflict between labour and the interests of capital. The corporatist system is most extensive in Sweden and Norway, where employer federations and labour representatives bargain at the national level mediated by the government. Labour market interventions are aimed at providing job retraining and relocation.BOOK, Rosser, Mariana V. and J Barkley Jr., Comparative Economics in a Transforming World Economy, MIT Press, July 23, 2003, 978-0262182348, 226, Liberal corporatism is largely self-organized between labor and management, with only a supporting role for government. Leading examples of such systems are found in small, ethnically homogeneous countries with strong traditions of social democratic or labor party rule, such as Sweden's Nordic neighbors. Using a scale of 0.0 to 2.0 and subjectively assigning values based on six previous studies, Frederic Pryor in 1988 found Norway and Sweden the most corporatist at 2.0 each, followed by Austria at 1.8, the Netherlands at 1.5, Finland, Denmark, and Belgium at 1.3 each, and Switzerland and West Germany at 1.0 each…with the exception of Iceland all the Nordic countries have higher taxes, larger welfare states, and greater corporatist tendencies than most social market economies., The Nordic labour market is flexible, with laws making it easy for employers to hire and shed workers or introduce labour-saving technology. To mitigate the negative effect on workers, the government labour market policies are designed to provide generous social welfare, job retraining and relocation to limit any conflicts between capital and labour that might arise from this process.

Economic system

The Nordic model is underpinned by a free market capitalist economic system that features high degrees of private ownership with the exception of Norway, which includes a large number of state-owned enterprises and state ownership in publicly listed firms.JOURNAL,weblink Norway: The rich cousin, The Economist, 2 February 2013, 27 October 2014, The Nordic model is described as a system of competitive capitalism combined with a large percentage of the population employed by the public sector (roughly 30% of the work force).NEWS,weblink The Nordic countries: The next supermodel, 2 February 2013, The Economist, 27 July 2016, In 2013, The Economist described its countries as "stout free-traders who resist the temptation to intervene even to protect iconic companies" while also looking for ways to temper capitalism's harsher effects, and declared that the Nordic countries "are probably the best-governed in the world".NEWS,weblink The secret of their success, The Economist, 31 January 2013, Some economists have referred to the Nordic economic model as a form of "cuddly" capitalism, with low levels of inequality, generous welfare states and reduced concentration of top incomes and contrast it with the more "cut-throat" capitalism of the United States, which has high levels of inequality and a larger concentration of top incomes.WEB,weblink Lower levels of inequality are linked with greater innovation in economies, Jonathan, Hopkin, Jonathan Hopkin, Victor, Lapuente, Lovisa, Moller, 29 January 2014, London School of Economics, 27 June 2016, BOOK, Social Democratic America, Kenworthy, Lane, Lane Kenworthy, 3 December 2013, 9780199322527, Oxford University Press,weblink 88–93, United States, USA, Beginning in the 1990s, the Swedish economy pursued neoliberal reformsWEB,weblink IS SWEDEN A MODEL TO FOLLOW?, Per-Åke, Westerlund, 22 March 2014, Socialist Alternative (United States), Socialist Alternative, 27 July 2016, WEB,weblink Beyond the Swedish Model, Michal, Rozworski, 27 February 2015, Jacobin (magazine), Jacobin, 27 July 2016, that reduced the role of the public sector, leading to the fastest growth in inequality of any OECD economy.NEWS,weblink Swedish riots rage for fourth night, The Guardian, 23 May 2013, 27 July 2016, However, Sweden's income inequality still remains lower than most other countries.NEWS, Higgins, Andrew, 26 May 2013,weblink In Sweden, Riots Put an Identity in Question, The New York Times, 29 June 2013,

Norway's particularities

The state of Norway has ownership stakes in many of the country's largest publicly listed companies, owning 37% of the Oslo stockmarketNEWS,weblink Norway: The rich cousin – Oil makes Norway different from the rest of the region, but only up to a point, 2 February 2013, The Economist, 1 January 2016, and operating the country's largest non-listed companies including Equinor and Statkraft. The Economist reports that "after the second world war the government nationalised all German business interests in Norway and ended up owning 44% of Norsk Hydro's shares. The formula of controlling business through shares rather than regulation seemed to work well, so the government used it wherever possible. 'We invented the Chinese way of doing things before the Chinese', says Torger Reve of the Norwegian Business School".The government also operates a sovereign wealth fund, the Government Pension Fund of Norway—whose partial objective is to prepare Norway for a post-oil future, but "unusually among oil-producing nations, it is also a big advocate of human rights—and a powerful one, thanks to its control of the Nobel peace prize".Norway is the only major economy in the West where younger generations are getting richer, with a 13% increase in disposable income for 2018, bucking the trend seen in other Western nations of Millennials becoming poorer than the generations which came before.NEWS, Savage, Maddy, July 10, 2018, Unlike most millennials, Norway's are rich,weblink BBC, July 11, 2018,

Nordic welfare model

The Nordic welfare model refers to the welfare policies of the Nordic countries, which also tie into their labour market policies. The Nordic model of welfare is distinguished from other types of welfare states by its emphasis on maximising labour force participation, promoting gender equality, egalitarian and extensive benefit levels, the large magnitude of income redistribution and liberal use of expansionary fiscal policy.BOOK, Esping-Andersen, G., 1991, The three worlds of welfare capitalism, Princeton, NJ, Princeton University Press, While there are differences among the Nordic countries, they all share a broad commitment to social cohesion, a universal nature of welfare provision in order to safeguard individualism by providing protection for vulnerable individuals and groups in society and maximising public participation in social decision-making. It is characterised by flexibility and openness to innovation in the provision of welfare. The Nordic welfare systems are mainly funded through taxation.WEB,weblink About the Nordic welfare model, The Nordic Council, Norden, 2 April 2014, Despite the common values, the Nordic countries take different approaches to the practical administration of the welfare state. Denmark features a high degree of private sector provision of public services and welfare, alongside an assimilation immigration policy. Iceland's welfare model is based on a "welfare-to-work" (see workfare) model while part of Finland's welfare state includes the voluntary sector playing a significant role in providing care for the elderly. Norway relies most extensively on public provision of welfare.

Poverty reduction

The Nordic model has been successful at significantly reducing poverty.MAGAZINE, Kevin, Drum, 26 September 2013,weblink We Can Reduce Poverty If We Want To. We Just Have To Want To., Mother Jones (magazine), Mother Jones, 5 October 2013, In 2011, poverty rates before taking into account the effects of taxes and transfers stood at 24.7% in Denmark, 31.9% in Finland, 21.6% in Iceland, 25.6% in Norway and 26.5% in Sweden. After accounting for taxes and transfers, the poverty rates for the same year became 6%, 7.5%, 5.7%, 7.7% and 9.7% respectively, for an average reduction of 18.7 p.p.WEB,weblink Compare your country – Income distribution and poverty, OECD, Compared to the United States, which has a poverty level pre-tax of 28.3% and post-tax of 17.4% for a reduction of 10.9 p.p., the effects of tax and transfers on poverty in all the Nordic countries are substantially bigger. However, in comparison to France (27 p.p. reduction) and Germany (24.2 p.p. reduction) the taxes and transfers in the Nordic countries are smaller on average.

Gender equality

When it comes to gender equality, it can be said that the Nordic countries hold the one of the smallest gaps in gender employment inequality of all OECD countriesJOURNAL, May 2018, Is the Last Mile the Longest?,weblink Nordic Council of Ministers, OECD, –less than 8 points in all Nordic countries according to International Labour Organization (ILO) standards.WEB,weblink Which countries have the highest gender gap in the workplace?, International Labor Organization, They have been at the front of the implementation of policies that promote gender equality –for example, the Scandinavian governments were some of the first to make it unlawful for companies to dismiss women on grounds of marriage or motherhood. Mothers in Nordic countries are more likely to be working mothers than in any other region and families enjoy pioneering legislation on parental leave policies that compensate parents for moving from work to home to care for their child, including fathers.WEB,weblink Nordic family policies – between quotas and freedom of choice, Moustgaard, Ulrikke, 2017-10-19, Nordic Information on Gender, April 2019, Although the specifics of gender equality policies in regards to the work place vary from country to country, there is a widespread focus in Nordic countries to highlight “continuous full-time employment”  for both men and women, as well as single parents as they fully recognize that some of the most salient gender gaps arise from parenthood. Aside from receiving incentives to take shareable parental leave, Nordic families benefit from subsidized early childhood education and care and activities for out-of-school hours for those children that have enrolled in full-time education.The Nordic countries have been at the forefront of championing gender equality and this has been historically shown by substantial increases in women’s employment –between 1965 and 1990, Sweden’s employment rate for women in working-age (15–64) went from 52.8% to 81.0%. In 2016, nearly three out of every four women in working-age in the Nordic countries were taking part in paid work. Nevertheless, some challenges still face the Nordic model as women are still the main users of the shareable parental leave (fathers use less than 30% of their paid parental-leave-days), foreign women are being subjected to under-representation, and a nation like Finland still holds an important gender pay-gap (on average, women only receive 83 cents for every euro a male counterpart getsWEB,weblink Thursday's papers: Finland's gender pay gap, our duty to help, and cheaper microbreweries, 3.8.2018, YLE, April 2019, ).

Religion as a factor

Scandinavian countries have Lutheranism as their main religion. Schroder argues that Lutheranism promotes the idea of a nationwide community of believers and it promotes state involvement in economic and social life. This allows nationwide welfare solidarity and economic co-ordination.BOOK, Martin, Schröder, Integrating Varieties of Capitalism and Welfare State Research, Palgrave Macmillan, 2013, 157, Currently, a large number of Scandinavians have been described as being irreligious.NEWS, Steinfels, Peter, February 27, 2009,weblink Scandinavian Nonbelievers, Which Is Not to Say Atheists, The New York Times, March 21, 2017,


The Nordic model has been positively received by some American politicians and political commentators. Jerry Mander has likened the Nordic model to a kind of "hybrid" system which features a blend of capitalist economics with socialist values, representing an alternative to American-style capitalism.MAGAZINE, Jerry Mander, Jerry, Mander, 24 July 2013,weblink There Are Good Alternatives to US Capitalism, But No Way to Get There, Alternet, 27 July 2013, Senator Bernie Sanders (I-VT) has pointed to Scandinavia and the Nordic model as something the United States can learn from, in particular with respect to the benefits and social protections the Nordic model affords workers and its provision of universal healthcare.NEWS, Sanders, Bernie, May 26, 2013,weblink What Can We Learn From Denmark?, The Huffington Post, 11 March 2014, NEWS, Sasha, Issenberg, January 9, 2010,weblink Sanders a growing force on the far, far left, Boston Globe, You go to Scandinavia, and you will find that people have a much higher standard of living, in terms of education, health care, and decent paying jobs., WEB, Zeeshan, Aleem, May 4, 2015,weblink Bernie Sanders Says the U.S. Could Learn a Lot From Scandinavia. Here's Why He's Right, Mic (media company), Mic, May 5, 2015, According to Naomi Klein, former Soviet leader Mikhail Gorbachev sought to move the Soviet Union in a similar direction to the Nordic system, combining free markets with a social safety net, but still retaining public ownership of key sectors of the economy—ingredients that he believed would transform the Soviet Union into "a socialist beacon for all mankind".BOOK, Naomi Klein, Klein, Naomi, 2008, The Shock Doctrine: The Rise of Disaster Capitalism, Picador (imprint), Picador, 978-0312427993,weblink 276, BOOK, Philip, Whyman, Mark, Baimbridge, Andrew, Mullen, 2012, The Political Economy of the European Social Model (Routledge Studies in the European Economy, Routledge, 978-0415476294,weblink 108, In short, Gorbachev aimed to lead the Soviet Union towards the Scandinavian social democratic model., The Nordic model has also been positively received by various social scientists and economists. American professor of sociology and political science Lane Kenworthy advocates for the United States to make a gradual transition toward a social democracy similar to those of the Nordic countries, defining social democracy as such: "The idea behind social democracy was to make capitalism better. There is disagreement about how exactly to do that, and others might think the proposals in my book aren't true social democracy. But I think of it as a commitment to use government to make life better for people in a capitalist economy. To a large extent, that consists of using public insurance programs—government transfers and services".NEWS, Matthews, Dylan, 9 January 2014,weblink This sociologist has a plan to make America more like Sweden, The Washington Post, 11 March 2014,
Nobel Prize-winning economist Joseph Stiglitz has noted that there is higher social mobility in the Scandinavian countries than in the United States and argues that Scandinavia is now the land of opportunity that the United States once was.WEB,weblink 'Scandinavian Dream' is true fix for America's income inequality, CNN Money, June 3, 2014, American author Ann Jones, who lived in Norway for four years, contends that "the Nordic countries give their populations freedom from the market by using capitalism as a tool to benefit everyone" whereas in the United States "neoliberal politics puts the foxes in charge of the henhouse, and capitalists have used the wealth generated by their enterprises (as well as financial and political manipulations) to capture the state and pluck the chickens".JOURNAL,weblink After I Lived in Norway, America Felt Backward. Here's Why, The Nation, January 28, 2016, Economist Jeffrey Sachs is a proponent of the Nordic model, having pointed out that the Nordic model is "the proof that modern capitalism can be combined with decency, fairness, trust, honesty, and environmental sustainability".WEB,weblink Prof Jeffrey Sachs' plea to the Nordic countries, Global Health Minders, November 18, 2015, The Nordic combination of extensive public provision of welfare and a culture of individualism has been described by Lars Trägårdh of Ersta Sköndal University College as "statist individualism".NEWS,weblink The secret of their success, The Economist, 2 February 2013, A 2016 survey by the think tank Israel Democracy Institute found that nearly 60 percent of Israeli Jews preferred a "Scandinavian model" economy, with high taxes and a robust welfare state.NEWS, Sales, Ben, Survey: Israeli Jews Want Broader Welfare State, Israeli Arabs Prefer 'American Model',weblink Haaretz, 23 May 2016,


George Lakey, author of Viking Economics, asserts that Americans generally misunderstand the nature of the Nordic "welfare state":Americans imagine that "welfare state" means the U.S. welfare system on steroids. Actually, the Nordics scrapped their American-style welfare system at least 60 years ago, and substituted universal services, which means everyone—rich and poor—gets free higher education, free medical services, free eldercare, etc.MAGAZINE,weblink The "Continuing Revelation" of Scandinavian Economies,, July 22, 2016, In his role as economic adviser to Poland and Yugoslavia in their post-socialist transitional period, Jeffrey Sachs noted that the specific forms of Western-style capitalism such as Swedish-style social democracy and Thatcherite liberalism are virtually identical: The eastern countries must reject any lingering ideas about a “third way”, such as a chimerical “market socialism” based on public ownership or worker self-management, and go straight for a western-style market economy...The main debate in economic reform should therefore be about the means of transition, not the ends. Eastern Europe will still argue over the ends: for example, whether to aim for Swedish-style social democracy or Thatcherite liberalism. But that can wait. Sweden and Britain alike have nearly complete private ownership, private financial markets and active labour markets. Eastern Europe today [in 1990] has none of these institutions; for it, the alternative models of Western Europe are almost identical.NEWS,weblink The Economist, January 13, 1990, What is to be done?, In a speech at Harvard's Kennedy School of Government, Danish Prime Minister Lars Løkke Rasmussen addressed the American misconception that the Nordic model is a form of socialism, stating: "I know that some people in the US associate the Nordic model with some sort of socialism. Therefore, I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy".MAGAZINE,weblink Denmark's prime minister says Bernie Sanders is wrong to call his country socialist, Vox, 31 October 2015,


Socialist economists John Roemer and Pranab Bardhan criticise Nordic-style social democracy for its questionable effectiveness in promoting relative egalitarianism as well as its sustainability. They point out that Nordic social democracy requires a strong labour movement to sustain the heavy redistribution required, arguing that it is idealistic to think similar levels of redistribution can be accomplished in countries with weaker labour movements. They note that even in the Scandinavian countries social democracy has been in decline since the weakening of the labour movement in the early 1990s, arguing that the sustainability of social democracy is limited. Roemer and Bardham argue that establishing a market socialist economy by changing enterprise ownership would be more effective than social democratic redistribution at promoting egalitarian outcomes, particularly in countries with weak labour movements.JOURNAL, Market socialism, a case for rejuvenation, Pranab, Bardhan, Johen E., Roemer, 1992, Journal of Economic Perspectives, 6, 3, 104, ...we believe that social democracy requires rather special political circumstances that are absent in many countries for which our market socialism proposal may be feasible. Since it (social democracy) permits a powerful capitalist class to exist (90 percent of productive assets are privately owned in Sweden), only a strong and unified labor movement can win the redistribution through taxes that is characteristic of social democracy. It is idealistic to believe that tax concessions of this magnitude can be effected simply through electoral democracy without an organized labor movement, when capitalists organize and finance influential political parties. Even in the Scandinavian countries, strong apex labor organizations have been difficult to sustain and social democracy is somewhat on the decline now., 10.1257/jep.6.3.101, Historian Guðmundur Jónsson argues that it would be inaccurate to include Iceland in one aspect of the Nordic model, that of consensus democracy. He writes that "Icelandic democracy is better described as more adversarial than consensual in style and practice. The labour market was rife with conflict and strikes more frequent than in Europe, resulting in strained government–trade union relationship. Secondly, Iceland did not share the Nordic tradition of power-sharing or corporatism as regards labour market policies or macro-economic policy management, primarily because of the weakness of Social Democrats and the Left in general. Thirdly, the legislative process did not show a strong tendency towards consensus-building between government and opposition with regard to government seeking consultation or support for key legislation. Fourthly, the political style in legislative procedures and public debate in general tended to be adversarial rather than consensual in nature".JOURNAL, Iceland and the Nordic Model of Consensus Democracy, Scandinavian Journal of History, 2014-08-08, 0346-8755, 510–28, 39, 4, 10.1080/03468755.2014.935473, Guðmundur, Jónsson, In their paper "The Scandinavian Fantasy: The Sources of Intergeneration Mobility in Denmark and the U.S.", Rasmus Landersøn and James J. Heckman compared American and Danish social mobility and found that social mobility is not as high as figures might suggest in the Nordic countries{{em dash}}although they did find that Denmark ranks higher in income mobility. When looking exclusively at wages (before taxes and transfers), Danish and American social mobility are very similar. It is only after taxes and transfers are taken into account that Danish social mobility improves, indicating that Danish economic redistribution policies simply give the impression of greater mobility. Additionally, Denmark's greater investment in public education did not improve educational mobility significantly, meaning children of non-college educated parents are still unlikely to receive college education, though this public investment did result in improved cognitive skills amongst poor Danish children compared to their American peers. The researchers also found evidence that generous welfare policies could discourage the pursuit of higher-level education due to decreasing the economic benefits that college education level jobs offer and increasing welfare for workers of a lower education level.JOURNAL, Rasmus, Landersøn, James J., Heckman, The Scandinavian Fantasy: The Sources of Intergenerational Mobility in Denmark and the US, Scandinavian Journal of Economics, 119, 1, 2017, 178–230, 10.1111/sjoe.12219,weblink Nima Sanandaji, a libertarian, has also criticised the Nordic model, questioning the link between the model and socio-economic outcomes in works of his such as Scandinavian UnexceptionalismBOOK, Scandinavian Unexceptionalism, Sanandaji, Nima, Institute of Economic Affairs, 2015, 978-0-255-36705-9, and Debunking Utopia: Exposing the Myth of Nordic Socialism.

Political ideologies in the Nordic countries

According to sociologist Lane Kenworthy, in the context of the Nordic model of "social democracy", the ideology of the Nordic labour parties refers to a set of policies for promoting economic security and opportunity within the framework of capitalism rather than a replacement for capitalism.JOURNAL,weblink America's Social Democratic Future, Foreign Affairs, January/February 2014, Lane Kenworthy, January 2014, 2 April 2014,

See also

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Further reading

  • BOOK, Booth, Michael, Michael Booth, The almost nearly perfect people: behind the myth of the Scandinavian utopia, Vintage Books, London, 2015, 9780099546078, The Almost Nearly Perfect People,
  • BOOK, Brandal, Nikolai, Bratberg, Øivind, Thorsen, Dag Einar, The Nordic Model of Social Democracy, Palgrave Macmillan, Basingstoke, 2013, 9781137013262,
  • BOOK, Bucken-Knapp, Gregg, Defending the Swedish model: Social Democrats, trade unions, and labor migration policy reform, Lexington Books, Lanham, 2009, 9780739138182,
  • BOOK, Christiansen, Niels Finn, etal, The Nordic model of welfare: a historical reappraisal, Museum Tusculanum Press, Copenhagen, 2006, 9788763503419,
  • BOOK, Hilson, Mary, Mary Hilson, The Nordic model: Scandinavia since 1945, Reaktion, London, 2008, 9781861893666,
  • BOOK, Kenworthy, Lane, Lane Kenworthy, Social Democratic America, Oxford University Press, Oxford New York, 2014, 9780199322510,
  • BOOK, Kvist, Jon, Jon Kvist, Changing social equality: the Nordic welfare model in the 21st century, Policy Press, Bristol, 2012, 9781847426604,
  • BOOK, Lakey, George, Viking economics: how the Scandinavians got it right - and how we can, too, Melville House Publishing, Melville House, Brooklyn, 2016, 9781612195360,
  • BOOK, Partanen, Anu, Anu Partanen, The Nordic theory of everything: in search of a better life, HarperCollins, New York, 2017, 9780062316554,
  • BOOK, Sandberg, Ã…ke, Nordic lights: work, management and welfare in Scandinavia, SNS Förlag, Stockholm, 2013, 9789186949372,
  • {{Citation | last = Tyler | first = Meagan | contribution = Ten myths about prostitution, trafficking and the Nordic Model | editor-last1 = Tankard Reist | editor-first1 = Melinda | editor-last2 = Norma | editor-first2 = Caroline | editor-link1 = Melinda Tankard Reist | title = Prostitution narrative: stories of survival in the sex trade | pages = 213–226 | publisher = Spinifex Press | location = North Melbourne, Victoria | year = 2016 | isbn = 9781742199863 | ref = harv | postscript = .}}

See also: WEB, Tyler, Meagan, 10 myths about prostitution, trafficking, and the Nordic model,,weblink Feminist Current, 8 December 2013,

External links

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