Here's a primer for enjoying our inaugural conference on taxing the wealthiest 0.1 percent.
For those concerned about reducing inequality, the “Nordic model” is often celebrated as an alternative to U.S. escalating inequality. The Nordic countries –Norway, Sweden, Denmark, and Finland – typically have considerably less income and wealthy inequality, thanks to both robust social safety nets and progressive taxation. They also top indexes of industrialized countries measuring quality of life indicators such as longevity, health, work-life balance, and vacations.
But this has not always so. A century ago, most of these Nordic countries had gilded age levels of inequality and poverty. What brought about these changes?
A new book by George Lakey, Viking Economics, chronicles the history of social movements that forged the modern day Nordic model. Lakey, a veteran organizer based in Philadelphia, spent much of his life connected to Norway and other Nordic nations through extended family and work. He brings an organizer’s sensibility to extracting relevant lessons for U.S. campaigners.
In Viking Economics, Lakey also responds directly to common misconceptions about and objections to the possibility of adopting provisions of the Nordic model to a U.S. context. He begins the story with Norway’s growing opposition to the levels of poverty and inequality.
“Norwegians a century ago didn’t like the results of a wealth gap: the hunger and poverty, the crime, elderly friends warehoused or left in isolation, young people without hope of a good job,” he writes. “Norwegians also didn’t like the attitudes that went with inequality: an inclination toward arrogance among higher-income people and the feeling among lower-income people that they were losers defeated by the system.”
The decades-long transition was brought about in several of the Nordic countries through strong popular movements of workers and social reformers that campaigned and won political power. When out of power, they pressured governments through mass protests, including nonviolent direct action when the system was unresponsive.
Lakey dismisses the common right-wing canard that the Nordic countries are “welfare states,” full of dependence. In Lakey’s words, the Nordic model is a “universal services state,” that focuses on poverty alleviation, a robust social safety net and full employment, with a commitment to work as central part of their anti-poverty strategy for those who are able.
The quality of life for workers is much higher, and the work-life balance is considerably healthier than in the United States. Lakey cites OECD data that average number of hours worked in the U.S. is 1,790, compared to 1,418 in Norway and 1,430 in Denmark. Social mobility is increasing in the Nordic countries and declining in the U.S.
From an economic point of view, the Nordic model focuses on economic security, efficiency and productivity and believes they are connected. Lakey contrasts this to the U.S. economy model based on insecurity, high unemployment, and fear of poverty and hunger.
Lakey contests the misconception that high taxes and regulation in the Nordic countries stifle business and entrepreneurship. Productivity rates are considerably higher, even with a shorter workweek. And the rate of start-up companies in Norway and Denmark is considerably higher than the U.S. Researchers from the U.S. found that Nordic entrepreneurs are greater risk-takers because they don’t worry about education debt, retirement and medical care, thanks to Nordic “universal services.”
Nordic businesses compete in the global economy, including importing, exporting and outsourcing. But they are discouraged, through laws and social contracts, from cutting wages as part of their competitiveness strategy.
Their understanding of who are “the job creators” is not limited to the entrepreneurial class and investors.
“Although Nordics value the vision, risk and innovation contributed by entrepreneurs,” as Lakey writes, “they have a more complicated view of who lays the golden eggs. For one thing, they think the workers do a very large share of the egg-laying, which is why they invest so heavily in human capital and get higher productivity from their workers than in many countries. For another thing, their track record with cooperatives, state-owned and municipal-owned enterprises gives them a positive perception of other sources of egg-laying.”
Residents in Nordic countries don’t complain about their higher taxes because they clearly benefit from the expenditures. “For their high taxes the Norwegians have gotten overall affluence, stability, opportunity, a high level of services that make life easier and more secure,” writes Lakey.
Viking Economics is not just a primer to Nordic economic policy, but also serves as an introduction to a variety of useful practices and social policies. From renewable energy policy and valuing racial differences to restorative criminal justice and responding to radical Islam, Nordic countries have valuable lessons for U.S. communities.
For example, in most Nordic countries the transition from youth to adulthood follows a different path than the U.S. K-12 model and our focus on college and high-paying jobs. First, there is a deep culture of “life long” learning, folk schools, debt-free vocational training, and support for work transitions and parents. What in the U.S. would be considered working class jobs are valued and well-compensated in the Nordic countries. In contrast, Lakey observes that a “cruelty visited upon young people in high inequality countries is to induce star-struck dreams but refuse to fund pathways to achieving satisfying life choices, including high-wage working-class jobs.”
Lakey understands the hard work ahead to change U.S. culture and politics. “Movements need organizers, communicators, advocates, funders, nurturers, researchers, trainers, musicians and artists, nonviolent warriors, and ‘foot soldiers’ as well as visionary designers,” he writes. “All those were present in the Nordic movements that challenged a thousand years of poverty and oppression, took the offensive, and built democracy.”
The Nordic model can serve as both inspiring model –and reminder of the many ingredients required for social transformation.