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How Norway Dispels the Private vs Public Sector Myth

A strong state capable of building infrastructure is not enough. It must also be an inclusive state.

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By David Sloan Wilson and Sigrun Aasland

It’s no secret that the Scandinavian nations are doing something right. They consistently lead the world in measures of happiness and quality of life. Political guru Francis Fukuyama called the search for the good society “getting to Denmark”. Even The Economist magazine featured a goofy looking Viking on its cover with the headline “The Next Supermodel”.

How the Nordic countries achieve their success–and whether they can be copied by other nations–is another matter. Bernie looks upon them as a model. Hillary disagrees. Hell will freeze over before Ted and Donald cast their eyes in such a “socialist” direction.

Perhaps some of the new economic thinking featured on Evonomics can help. One key insight is to dispel the myth, pervasive in America and dangerously infective elsewhere, that the private sector does everything well and the public sector does everything poorly. Modern society requires an extensive infrastructure, which does not emerge bottom-up from unregulated markets. This has always been the case, in America as elsewhere, as my recent interview with Daron Acemoglu attests. One reason that the Nordic nations work well might be because they have not—yet—succumbed to the siren’s song of free market fundamentalism.

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A strong state capable of building infrastructure is not enough. It must also be an inclusive state that works for the benefit of everyone, as opposed to an extractive state that works only for the benefit of an elite few, as my interview with Acemoglu also makes clear. Inclusiveness requires a balance of power among the various sectors of the society. Perhaps the Nordic nations work well for this reason also—strong states working collaboratively with a strong private sector, strong labor unions, and a strong, well-informed, and trusting electorate.

Even this is only necessary and not sufficient. A national economy that works well is a complex adaptive system, like an automobile with many interdependent parts. Even a strong and inclusive state won’t work well if it doesn’t put the parts of its economy together in the right way, which is not an easy matter for any complex system. Centralized planning won’t work and neither will unregulated markets. Something in between is required, which David Colander calls “activist laissez faire” in this excerpt of his book with Roland Kupers titled Complexity and the Art of Public Policy.

For the last three years, the Evolution Institute has been making a special study of Norway as an example of cultural evolution leading to a high quality of life. We now have an extensive network of associates to help us combine their detailed knowledge of Norwegian society and economics with our distinctive theoretical perspective—including Sigrun Aasland, Director of Analysis at Agenda, a think tank focused on Norwegian domestic politics and international affairs. My interview with Aasland provides a glimpse of the complex adaptive system that operates under the hood of the Norwegian economy.

DSW: Greetings, Sigrun, and welcome to Evonomics.com.

SA: Thank you, David. I am really excited to be part of this discussion

DSW: To begin, tell us about your own background. I know from our previous conversations that part of your economic training took place in the USA, so you have personally experienced the very different economic philosophies of the two nations.

SA: Sure. I was lucky enough to get my Master’s degree at the Johns Hopkins School of Advanced International Studies in Washington, DC. I also worked at the World Bank for five years after graduating. SAIS is a great programme – what’s more perfect for policy geeks to study policy in the heart of global policymaking? It also has a truly international student body – so you learn economics and policy alongside people from China, Japan, Sweden, Poland, Ecuador, Canada, Morocco, and the US.

You know they say it is a good thing to challenge our own worldviews from time to time. I grew up in Norway and the welfare state has always been self-evident. At SAIS not so much. I remember someone had scribbled in the basement bathroom: “How many Scandinavians does a right wing policy school really need?” Quite a few Scandinavians it turned out, partly since we had part of the tuition covered by our own welfare states and could attend expensive grad school simply because we had the grades for it.

DSW: Well, there is one benefit of a welfare state!

SA: In SAIS labor economics class we argued not over the level and design of social policies, but just as often over the welfare state as a concept. The contrast was significant to the US tradition, but also the Eastern European students were quite libertarian – having grown up just after the fall of Communism. You learn a lot from having to look at your own system from the outside. At least I did.

DSW: Now tell us a bit about Agenda and your role as Director of Analysis. Where is Agenda located on the Norwegian political spectrum, and where is the entire spectrum located on the American political spectrum?

SA: Agenda is a think tank and the centre-left of Norwegian politics. The concept of think tanks is quite new in Norway. We’ve had political parties and research institutions, and gradually I think it has become increasingly clear that there was a gap between the two. Politics tend to get conflict-oriented and there is this scramble for attention and shortage of time and space. At the other end of the spectrum, researchers hesitate to engage in political debate in fear of being oversimplified or misunderstood. Our job is to create a space for open-minded policy-debate. And we are explicitly not value-free. We are not affiliated with any party. Yet our philosophy is that liberty is only possible when opportunities are truly equal. Today we are seeing that they are not. Capital and resources accumulate, inequality is on the rise, and your possibilities depend largely on your parent’s economic situation. Robert Putnam’s research, among others, show this very clearly. We invite researchers – including Putnam, to contribute and we try to create both a space for longer thoughts and a bridge between research and politics. We also produce our own analyses on policy issues including work and economic policy, the future of the welfare state, climate and energy policy, migration, and development. I’ve been in this job for just short of a year, coming from a background in consulting and before that the World Bank.

DSW: Thanks for this background—very helpful. Now let’s dive in. I first met you at a talk I gave at BI, Norway’s largest business school. My talk was titled “The Competitive Advantage of Cooperation” and you were present as a commentator. I was struck by how you described the Norwegian economy as a complex adaptive system with interlocking parts. Could you please repeat that succinct description?

SA: I would love to. My main point – well illustrated recently by the Economist and others, is that the Nordic model makes sense economically. It is not just about justice and equality. It is also – and more importantly – about using all the talent, using all the technology possible and changing all the time. That means high productivity.

The so-called Nordic model can be illustrated as a triangle consisting of three interlocking factors: First: a strong tax-funded welfare state providing education, healthcare and social safety nets. Second, an open market economy with active monetary and fiscal policies to ensure stability, distribution, and full employment. And third, strong collaboration in an organized labor market with coordinated wage formation and company-level collaboration.

Now this model has demonstrated the ability to combine relatively high taxes with high productivity. Productivity growth has fallen less in Norway than in many other countries. There are a number of reasons for this.

A collectively bargained and compressed salary structure means that low-skilled labor is relatively expensive while high-skilled labor is relatively cheap. Since high-skilled labor complements technology while low-skilled labor substitutes technology, three things happen. First, employers invest in technology to replace the expensive low-skilled workers. They also choose high skilled over low-skilled workers since the cost differential is small. Second, unless highly productive, the same employers cannot afford to keep workers and have to let them go. This ensures adaptability within companies but also among companies. Adapt or die.

DSW: Cultural evolution in progress…

SA: The latter is important and brings me to the next point. Just to illustrate – in the course of the last two years nearly 30,000 people have lost their jobs in oil and gas as a consequence of falling oil prices and a delay in investing in productivity growth in the sector. In the first wave, these were mainly guest workers but eventually also Norwegian staff. While dramatic on a personal level for those losing their job, this happened without any social crises or unrest. This is manageable because Norwegian workers have social safety, not job safety. Laid-off workers are ensured a certain safety net from the state.

The third thing that happens is good collaboration in the workplace. Norwegian worklife is characterized by limited hierarchy and short distance to the top. This means ideas can be brought forward and decisions made in the production line by trusted and qualified employees. In fact, research also indicates that firms with high levels of organized labor are more likely to restructure or reorganize.

DSW: This will surprise many American readers.

SA: Well they are not alone. It is a well-established myth I would say that organized labor hampers innovation and restructuring. But in a microcosm, most people would agree that good dialogue promotes better solutions for everyone. You know it is not in workers’ interest either to see companies go under. On a macro-level, the strong three-way collaborative of unions, employers and state also have common interests in ensuring responsible wage formation. And together they can also tackle broad and difficult reforms where long-term perspectives are necessary. Two examples: In the annual wage negotiations, the exporting industry always negotiates first and sets the stage for the others, thereby ensuring that wage growth will not exceed what exporters can handle. On a policy level, in 2008 the three partners negotiated the start of a massive pension reform that will give many people less but that will be necessary to ensure labor supply and public budgets with an aging population.

All this, of course, is not to say there are no challenges ahead. One is that as the labor market changes. With more service and knowledge workers and perhaps (not yet) more freelancing, we are seeing a decline in organized labor (membership in unions). It is now at 50 percent of the labor force and at some point may not be representative to uphold collective bargaining and a strong policy role. Second, with immigration comes a higher share of low-skilled workers than the typical Norwegian population. We are already having trouble including the Norwegian less-productive in a highly productive labor market. Allowing lower wages would undermine the above principles, and may even make social benefits more desirable than wages for some. So is not a good solution. Building competence and integrating more immigrants into the labor markets on its own terms seems more sensible, but is of course easier said than done, at least for the first generation immigrants (second generation immigrants in fact do quite well).

DSW: Even a highly adaptive complex system can be destroyed by external forces. Let’s talk more about innovation. Norway is sometimes portrayed as lacking in innovation but your analysis seems to suggest otherwise.

SA: There is an interesting discussion around what models actually foster innovation. To my understanding, Daron Acemoglu and others argue that while equal societies with a strong state and considerable safety nets are nice places to live, they are dependent on others (such as the US) to drive innovation because the main driver for innovation is the possibility to get ahead in an otherwise unequal society. Other researchers have questioned this analysis, questioning inter alia how innovation is measured. These researchers show that if you look at both patents and researchers per capita – Nordic countries perform far better than the US. Joseph Stiglitz also offers alternative theories arguing that high levels of trust and strong safety nets in fact promote innovation because the risk of failing is perceived as much smaller. And as another Nobel laureate, Daniel Khaneman, has illustrated – people tend to pick no risk over possible gain.

The road to innovation and success is paved with failed attempts. So it boils down to two core questions: First – what kind of relationships foster new thinking? And second, do people take risk and think innovatively if they have a lot to gain personally – or if failure in trying comes with low risk?

DSW: Your analysis of what’s “under the hood” of the Norwegian economy nicely illustrates the three factors that I listed in my introduction to this interview: 1) A strong state: 2) An inclusive state; and 3) A state that is adaptable as a complex system. I’d like to hear more about the third factor. How does Norway avoid the dangers of centralized planning on one hand and unregulated markets on the other hand? How does it cope with the fact that any policy intervention will have effects that cascade through a complex social and economic system?

SA: Well that’s a huge question. And I am not here to claim that the Norwegian economy has got it all figured out. But the building blocks are in place. And I want to stress something important that you also alluded to in your introduction: This is not a plan-economy. In fact my main point is not that the state alone makes the Nordic model. It is a complex and stable arrangement involving employers and employees – precisely to ensure private sector growth and exports. The economy is not centrally planned. The public sector share of GDP is high because welfare services and collective goods are either publicly run or publicly financed. But the economy in general has proved highly adaptable.

DSW: Thanks so much for your insider’s view of the Norwegian economy, which I think will be revealing to many American readers. Even better, I and my associates at the Evolution Institute look forward to working with you and your associates at Agenda to become—as I put it—wise managers of evolutionary processes.

SA: Thank you!

2016 April 26


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  • SheldonFromBBNOT

    What is the income tax rate in the Nordic countries?

    • Jan de Jonge

      There are many taxations. And next to taxes citizens also have to pay for social security. Google it when you want to know the details. The total tax revenue is about 42% of GDP.

      • SheldonFromBBNOT

        Thanks Jan! I am wondering is it sensible to have hard earned money in my hand or trust government by taxing me more and hoping that everything will be alright. I will go with the former!

        • carolannie

          Sure, solitary action is always better than collective action.

          Ha ha ha ha

        • Jan de Jonge

          Collective bargaining is often cheaper and the quality is better controlled.
          See the data in my answer to Swami. I agree with the comment of carolannie. But, of course, the choice is yours.

        • Adam_Irae

          In general, you will find you ability to use the money in your hand to purchase a sewage system, roads, police, fire services, hospitals, schools, airports, etc, etc very limited. You may find that groups of people pooling their resources can purchase these things though.

          We call this a “nation”

          • SheldonFromBBNOT

            Yes, those are called basic services which every citizen deserves and accordingly they pay their taxes from the income earned. But that doesn’t mean sharing close to half of my income as tax to the government.

          • Adam_Irae

            That’s mostly a myth, at least here. I work in Norway, make around 100k in $ (depending on the exchange rate) and take home 73 cents for every dollar on it. I did a comparison once with the total taxes in a high-income US state such as New York, and we are not that much above.

            The reason why we can take in more money without a very high tax rate is mostly lots of maternity leave, and a big middle class, but also a different share of taxation between individuals and businesses.

    • Adam_Irae

      Different for each country, like everywhere else.

  • Swami

    I am a big fan of lifestyle and institutional success of the Scandinavian countries. If the climate was more to my liking (warm beaches with great surf) I would put them near the top of my preferred living places.

    But we need to be careful of cherry picking things which agree with our preconceived notions.

    These small countries are more comparable to large metro areas than diverse complex countries. Comparisons of Sweden or Norway are more similar to Chicago or Houston in population and economy than to our larger states and in no way comparable to the US in total. Furthermore, the extensive racial and demographic diversity of these metro areas is not what we are likely to find in Scandinavian countries.

    The Scandinavian countries tend to have higher free market scores than the US. They are arguably more laissez-faire, not less. Their greater interference in labor regulation and higher taxes are more than offset with less regulatory interference in other areas.

    Living standards, are on average, notably lower in Scandinavian countries than in the US. They compare more to some of our poorer states.

    We need to remember that the average person of Scandinavian descent does substantially better in the US, than do those Scandinavians still living in Scandinavian countries.

    http://www.tino.us/2010/01/dynamic-america-poor-europe/

    Tax rates are substantially more regressive in Scandinavian countries.

    The wealthy pay a higher portion of taxes in the US, and the middle and lower classes have substantially lighter tax loads in the US.

    Corporate taxes are higher in the US.

    So, is the lesson stronger unions and stronger safety nets in the US, or is it lower taxes on the rich, higher taxes on the poor and middle class, more laissez-faire economic policy, and/or more restrictions on immigration?

    I am being more facetious than serious (I am not arguing here for any of these at this time). Just saying that we should be careful what we take away from using Scandinavia for a model.

    • carolannie

      Corporate tax rates are higher, effective taxes are much lower, close to nil
      Living standards are not comparable to our poorer states (seriously? where did you cherrypick this info from? Republican data? free health care, free childcare, subsidized housing, good free education, etc, how does this compare to our poorer states?)
      Effective tax rates for rich people are much lowe. r, effective tax rates for the middle class and poor are higher, comparable tax rates are inverted in the US vs the progressivity in the Nordic countries

      You are really joking

      • Arturr Magri

        I think they are not talking about using Scandinavia as a model for every Western economy. Rather they are making the point that neither pure “bottom-up, free market” nor “upside-down, centralized planning” strategies have the weapons to enhance development in a 21st century, complex economy. That’s where the emphasis is put when they say “strong states working collaboratively with a strong private sector”: we now need innovative institutional arrengements between both sectors, new solutions that could go beyond old dichotomies. Probably to think and do more in the meso and the supra-national level.

        • carolannie

          Beyond nationalism, which is the weak point in all economic thinking. The wealthy are global thinkers and wheeler dealers going from nation to nation and cutting great deals for themselves, while the rest of us are stuck in the national paradigm which hogties innovative planning. How do we get around that?

          • Arturr Magri

            Agreed. How do? To be sincere I have no answers to that.

          • Jan de Jonge

            What about the distinction Sandel made between “having a market and being a market”, the distinction between a society with a market economy (Norway, for instance) and a market society (the so-called free market).

          • Make it easier for everyone else to move from nation to nation.

      • Swami

        Try googling the facts if you disagree.

        • carolannie

          I do.

    • Jan de Jonge

      Some data.
      1. ranking on GDP per capita (ppp), 2015, source IMF: Norway 6 USA 10
      2. healthcare spending per capita (ppp) 2012, source OECD: Norway $ 6177 USA $ 8713
      3. public spending on education % of GDP, 2012, source World Bank, Norway 6,9 %
      USA 5,6%
      4. private spending on education % of GDP, 2012, source OECD, Norway 0,0 %
      USA 1,4 % (of which 1,2 % to tertiary education). This is an indication of the opportunity
      of access to higher education
      5. Gross public social spending % GDP, 2011, source Washington Post, Norway 21,8%
      USA 19%. Because these figures are disputed, I have taken a source from the USA.

      • Swami

        I am not sure if you are making a point or just throwing some numbers in the mix? Please do elaborate.

        • Jan de Jonge

          I do not know whether I should take this serious. Sure you must have seen data before and the therms GDP or per capita are familiar to you? You also know what ppp means? Adjusted for purchasing power parity? Or do I overestimate you? Thus I don’t know what you are asking for.
          But I will help you. I’m reacting to your statement in your first comment that says: Living standards, are on average, notably lower in Scandinavian countries than in the US. They compare more to some of our poorer states. I contest this statements and present the following data.
          1. According too the IMF living standard in Norway is on the average higher than in the USA
          2. Costs for medical care are on average lower in Norway than in the USA
          3. Public spending on education is higher in Norway than in the USA
          4. When we add private spending total spending on education in Norway and the USA is more or less the same. But most private spending is for tertiary education, which probably means for higher income classes. Norway students don’t need loans to pay for their study.
          5. Social spending in Norway is higher than in the USA, meaning the safety net is larger/more generous.
          I expect that you will blame me for cherry picking or you start complex stories about the size of Norway compared to the USA or complex arguments about different states and people of different origins. These arguments all don’t count. Probably you have heard sometimes that for an argument to count it must be simple (Occam’s razor), my answer to your remark is factual and simple enough to be understood.
          I also am in a state of astonishment that it is so hard for you to accept that the USA is not the best nation in the world.

          • Swami

            How many times do I need to repeat that I would be happy living in Scandinavian countries?

            When did I state the US is best? I would be quite happy living in any of the Scandinavian countries and I find many things about them admirable (note the plural “them”)

            Since when is Norway (an oil nation comparable in many ways to North Dakota or Alaska in economy) the same as “Scandinavian countries”? Is one now the equivalent of numbers less than five too?

            It must be nice to know when you argue with other people that their “arguments don’t count”.

            I suggest you aim your rhetorical skills at people whose arguments do count.

          • Jan de Jonge

            I have written that the kind of complex arguments (of which I gave an indication) you use don’t count. Cite me correctly please.
            You suggest that the data that I provided (and that you have not refuted) are like “throwing some numbers in a mix”. Suggesting that these data are incoherent and meaningless. Is this not also a way of telling your opponent that arguments don’t count? Be aware that I used data from the IMF, OECD etc. Not data I have invented.
            Your comment on Stringerbelt is partly a mess of words, phrases and claims about healthcare and ppp, where no clear conclusion can be drawn.
            This all combined brought me to the statement that I want to hear arguments that count.
            I don’t compare all Scandinavian states with the USA. If that was my aim I would have provided data about Denmark, Sweden and Finland also. I have given the example of Norway to refute your view that “living standards, on average, are notably lower in Scandinavian states than in the USA.” You even argue that they compare to your poorer states.
            I think that the data I have provided contradict this claim without doubt.
            That you cannot admit this brought me to the idea your feelings of patriotism prevented this.

          • Swami

            Thanks for sharing your thoughts.

          • Adam_Irae

            If you take a walk in the lower performing US states, and the Scandinavian countries, it is fairly obvious that they are not even. The question becomes, why do the stats not reflect this ?

            To me, it seems that Europe in general, and Scandinavia in particular is better at channelling economic growth to the middle classes.

      • Jan de Jonge

        the

    • Strlngerbell

      ‘But we need to be careful of cherry picking things which agree with our preconceived notions.’ Follow along…

      To take one example, in terms of per capita GDP, Demark would rank as one of the 10 poorest states in the United States. Instead of your useless “numerical index” let’s have some real numbers. Use Oklahoma one of the ten poorest American states vs Denmark, heres the GDP numbers:

      For OKLA: $160.935 B (nom.) /$138.3 B (PPP); $42,237 (per cap., nom.) / $36,253 (PPP)

      For Denmark: $313.64 B (nom.) / $210.15 B (PPP); $56, 202 (per cap., nom.) / $37,657 (PPP)

      (the sources are quite varied: IMF, CIA Factbook, Knoema, and the State of Oklahoma—and even the occasional Wikipedia check as leads back to one of these.)

      Denmark’s total GDP output is quite impressive for approx. 5.6 million people vs. Oklahoma’s 3.8 million. True, by the time you get down to per capita PPP amounts, they look very close. But other factors than just sheer numbers here are important, including comparing Denmark to US states with a higher income.

      First, Denmark has MUCH less disparity in wealth so its average figure will in fact be much more true to the average income compared to the much greater distortion of this with the wealth gap in the US. It is true that consumer goods are generally pricier in Denmark and other Nordic countries (esp. with higher income tax and as there is no VAT tax in the US), but goods that should be considered more justifiable social are vastly cheaper.

      This therefore completely belies your argument, that overall Americans have a greater amount of disposable income compared to Nordic countries or Scandinavians moving to America. Or the implication that the income of the typical Dane is the same as the typical Oklahoman. No Nordic individual has to worry about medical indebtedness, the major cause of bankruptcies in the US; they don’t have to worry about the heavy burden of student loan payments, an indebtedness that the Federal Reserve itself confirms as being a drag on the economy; nor does any Nordic retiree or soon to be retiree have to worry that their 401(k) has just been obliterated by Wall Street malfeasance, as they don’t need 401(k)s.

      The typical Nordic city environment has excellent public transportation so you are much less burdened in needing to maintain the expense of a car (gas, maintenance, insurance, possible repairs—esp. with degraded US roads and bridges, etc.), if you are married with brand new children just having arrived, in Nordic countries paid parental leave with subsidized childcare, with some variability on the options on offer, whether daycare vs. home care, along with guaranteed job return.

      In all of this what you ignore, esp. over the last 30 years of US economic history, the private individual is expected to shoulder more and more of this her- or himself, and under a neoliberal paradigm that stagnant their incomes. All under the guise of freedom.

      The only persons in the US that can be like the Scandanavians, with no medical debt, no education debt, a generous and generally high, proportioned to income, retirement and have a flourishing life with high social mobility +are the very rich.+ In Nordic countries—essentially EVERYONE has this.

      This also then rejects the silly claim that if Nordic countries were the equivalent of US states they’d be the poorer ones.

      • Swami

        No, you are again cherry picking. Remember, I started my argument by saying that the various Scandinavian countries would all be fine places to live, as would Kansas or the Carolinas. I meant it.

        But you are double counting the per capita GDP that goes into health care and transfers. The average Scandinavian has a lower standard of living INCLUDING their health care and such. It is already captured in their numbers, which as you noted are lower than most states. One pays for health care in thirty to forty percent tax rates and substantially higher priced goods (the Scandinavian), and one pays for it out of their higher income, Incomparably higher average after-tax income (Kansan). If this doesn’t make sense to you, please ask for clarification.

        In addition, you must adjust incomes to PPP. On a country basis, the numbers are adjusted. But they are not usually adjusted on a state basis. When you adjust to Kansas PPP, the actual living standards of a Kansan is substantially higher. Because cost of living is lower than the US on average.

        As to my comment that the average Scandinavian makes substantially more in the US than the average Scandinavian in Scandinavia, I am referencing that different nationalities have consistently different average incomes over time. The US has a substantially more diverse population, including many nationalities who make substantially less than Scandinavians. This Wikipedia sight shows average income in the US by nationality of origin. In general, Scandinavian Americans make fifty to sixty percent higher incomes in the US than they to in their home country, reflecting the substantially higher productivity of the US.

        https://en.m.wikipedia.org/wiki/List_of_ethnic_groups_in_the_United_States_by_household_income

        The numbers are startling. Virtually all people of ebpvery national origin make more in the US than their kin who stayed behind in the home country.

        The US is not comparable in size and complexity and diversity to the tiny little, homogenous Scandinavian nations, made up primarily of Scandinavian people.

        There are some good arguments for the Scandinavian model. There are some good arguments against. The US is a more dynamic market, with more diversity, more immigration, more innovation. But Scandinavia has its benefits too. Don’t assume what works for a tiny nation of homogenous Scandinavians will work in a nation like the US.

        • Strlngerbell

          If you truly think that the standard of living of someone in Kansas is higher than Denmark I have a bridge to sell you….

          • Swami

            If the PPP standard of living is approximately the same and the Kansas PPP is based upon the average US cost of living, then yes, I think it would be logical to assume standards of living are higher on average in KS than Denmark.

            But again, my initial comment is that Scandinavian countries are similar in living standard to US states, that they have some factors that are arguably better, their institutions have pros and cons and that it is a matter of preference. I am also arguing that what can work in a tiny little homogenous country of Danes isn’t necessarily going to work at all for the large, vibrant, complex, multiracial and multi cultural US.

          • Strlngerbell

            ‘I am also arguing that what can work in a tiny little homogenous country of Danes isn’t necessarily going to work at all for the large, vibrant, complex, multiracial and multi cultural US.’

            Sure that is an opinion to have but apart from outward appearances in a nation like America differences are often moot. Whatever cultural differences they have, barring some unique communities are more and more becoming vestiges of the past. Does not the US often pride itself on the fact that it is a diverse nation, melting pot is the term no?

            If your argument was say about places like India, Indonesia, Nigeria were they are real cultural, ethnic, linguistic differences that are preexisting and centuries old, I would be more inclined to agree with such as assertion.

          • Swami

            I was just figuring we could agree to disagree on the living standards of Kansas v Denmark. But then I accidentally stumbled on this web site which specifically links to a study which actually does what I suggested and adjusts PPP at a state level. As expected, there is now a significant advantage for Kansas.

            Follow the links in the article to see the details by state.

            https://www.washingtonpost.com/news/monkey-cage/wp/2016/04/15/if-sweden-and-germany-became-u-s-states-would-they-be-among-the-poorest-states/?postshare=5101460755601521&tid=ss_tw-bottom

          • Strlngerbell

            Hack article. And I dont like repeating myself but I prefer a standard of living where you are never deprived of healthcare. Where one can further themselves academically without incurring a massive loads of debt. Solid infrastructure, paid vacation, maternity leave etc That to me is a standard of living to espouse.

            So the average poor soul in Kansas has a similar income to the average Dane? The Kansan is uneducated unless they incur massive amounts of debt to change that. They are overpaying for their healthcare, have no healthcare or sub par healthcare. Maternity leave? Pftt. Mandatory paid vacation? Whats a sidewalk? By all means stumble somewhere else and continue to pontificate about places you know nothing about nor have ever visited.

          • Adam_Irae

            Are you sure you are not confusing “standard of living” with “ability to purchase stuff” and “average” with “median” ?

        • Adam_Irae

          As I’ve pointed out, Scandinavian-Americas is a group who have enjoyed the advantage of being in the upper ethnic group for a century, and from which you’ve removed the more turbulent individuals over the period.

          Also, having lived in Scandinavia and the US, the notion that Scandinavian living conditions are equivalent to the poorer US states sounds similar to listening to Marxists in the 80s insisting that of course Albania has a better economy than the west, their economic theory proves it. In other words, it seems to be untouched by actual real-world observation.

          I suspect such a comparison does not capture how much of the economic resources of the country is enjoyed by the median citizen.

    • Adam_Irae

      Respectfully, I think there are a few misconceptions in your analysis. First off, I don’t see how these countries are comparable to metropolitan areas. They do not enjoy any of the advantages of population density that a metropolitan area does, but tent to have a large variation in geography and population density. Barring Denmark, they are also average or above average for a country in size and population.

      Median living standards tend to be far better in the Scandinavian nations. “Basket of goods” comparisons do not generally work well when one side of the comparison have large financial burdens that need to come out of their disposable income.

      Americans of Scandinavian descent do much worse than Scandinavians in Scandinavia -when you compare equivalent groups. Americans of Scandinavian descent can trace their ancestry back 100 + years to the big emigration waves. And in addition to having a century of family stability behind them, it is a group that selects out the “low” socioeconomic groups in US history. Asian-Americans, African-Americans, Native Americans, Hispanics -not a lot of Scandinavian-Americans in those groups.

      If you compare Scandinavian-Americans to a similarly selected group of Scandinavians, the Americans do worse by a degree of magnitude.

      Finally, Americans divide ethnic groups based on skin colour, a very visible marker. So they look at Europeans, see no differences in colour, and assume ethnic homogeneity. This is not the case from a Europeans viewpoint. From an American viewpoint the 1980s Jugoslavia had the advantage of being a homogenous population.

  • SLDI

    An interesting comparison…

    SA states: “The so-called Nordic model can be illustrated as a triangle consisting of three interlocking factors: First: a strong tax-funded welfare state providing education, healthcare and social safety nets. Second, an open market economy with active monetary and fiscal policies to ensure stability, distribution, and full employment. And third, strong collaboration in an organized labor market with coordinated wage formation and company-level collaboration.”

    SLDI states: “As a comprehensive sustainable development decision model, The SLDI Code™ functions as a completely integrated, fractal matrix which leads decision-makers from the foundation of triple-bottom-line sustainability to sustainable results. This unique model (depicted graphically by the logo below) is a result of the input and vetting of numerous sustainable project leaders.” – http://www.triplepundit.com/2011/02/universal-principles-sustainable-development/

  • Virtual Remover

    Yep, Nordic economic models are the way to go. Nothing else to see here, like culture and ethnicity-related factors, no sir.

  • There are lessons here for my country, Ireland, but he missing piece with Ireland in mind is the question of developing native research industries. If the state does not set objectives, all local business initiatives will be determined by existing experience – more and more coffee shops! From 2012: https://colummccaffery.wordpress.com/2012/09/04/apollo-national-projects-and-sane-management/

  • Encore1fois

    A working example is the best proof of concept.

  • MilkywayAndromeda

    Accurate article.
    Regarding this “One reason that the Nordic nations work well might be because they have
    not—yet—succumbed to the siren’s song of free market fundamentalism.” unfortunately for at least one not country the “yet” is past…