Economy Government International Affairs

Is the Scandinavian Socio-Economic Strategy Transferable?

As populations grow, wealth distribution continues to play a more critical role in daily affairs. As such, economic distribution has begun to seep into the realms of political and social awareness of individuals as well as organizations. Now, democratic governments have to adjust to the will of their people – to accommodate and address their needs and requests, much of which centers around individual needs for financial assistance and social welfare programs.

A balance between capitalist opportunities and social welfare assistance has been epitomized through the Nordic model, which has been implemented in Norway, Sweden, Finland, Denmark, and Iceland. Internationally renowned, the social strategy implemented by these Scandinavian countries is largely dependent on a viable relationship of trust between the government and the people, as such progressive taxation and centralized planning cannot exist in bad faith.

To recognize the real system going on here, we have to understand the distinct ways in which the Scandinavian nations operate on a social and economic front. Many people put forth these countries as prime socialist examples, but in reality, they are structured heavily on capitalist business practice and low-level regulation. The only relatively socialist tactic employed by these governments is the participation in high taxation, available public services, and equitable wealth redistribution. These practices are simply reasonable and progressive democratic programs that are funded by capitalism, and supported by the people, in the interest of the people.

Real socialism is where the people cede corporate power and control to a centrally planned government which they trust to have decisive control over resources and wealth management and distribution, as well as the economic system as a whole. This is not what Scandinavian countries have in place. Instead, these countries are emphatic promoters of capitalism within their own states and they seek to expand private ownership, slash regulations, and enhance the market autonomy of corporations. The caveat is that with such an encouraging capitalist platform, taxes must stay relatively high to balance a high performance economy with a vastly accommodating social safety net for the people to look to for support.

The truth is that the clear successes of the Scandinavian system are a direct product of immense trust between the people and their respective governments – something that is very unlikely to occur in any society, let alone established democracies like the United States or Canada. With so many ulterior motives and political partisanship, it is highly unlikely that a majority of democratic voters would vote in favour of increasing taxes and additionally, that the elected government would then use tax revenues in real and beneficial ways for the people.

What the Nordic model really boils down to is the loyalty to collectivism and faith in the state for cooperation. Essentially, the people have agreed to bridge all political and social barriers to establish a standardized way of life for all citizens such that each citizen contributes to their own basic needs which are managed by the state. For example, education is highly subsidized and very well suited to a high degree. In Sweden, daycare is essentially free, as is public education all the way through post secondary programs. These basic considerations do not take away the individual capacities of those who wish to lead more distinct paths of life, but they allow for each individual to have access to quality services should they need them. In turn, this means that no person’s talents and capabilities go to waste because quite simply, each and every person has opportunities at their fingertips with very low cost if any at all.

The main issue with transferring or trying to replicate the Scandinavian system elsewhere is that many other countries are simply too politically polarized to come to bipartisan agreements on such volatile decisions such as high taxes and rigid welfare support. Simply, many people do not see the eventual benefit that will come from an initial sacrifice through higher taxes. Higher taxes, if managed correctly by the government, could yield plentiful opportunities for individuals and businesses alike. However, the short-term loss is far too intimidating for businesses to gamble their futures on it.

Furthermore, many other social environments around the world just don’t have the demographic or cultural infrastructure to allow for such a progressive tax and welfare system. For example, the United States has literally been founded upon a contrary economic perspective as opposed to any national or cultural unity. It was founded on pure opportunistic and individualistic capitalism. With such a pure capitalistic point of view, businesses and individuals who have trusted the American system and believed in the ‘American Dream’ just don’t have any reason to fall back on it now after such successes and opportunities they’ve been allowed under alternate circumstances than a Nordic-like social strategy.

In another instance, the demographic cycle of a nation also plays a role in whether or not that nation would be willing to adopt such a progressive social strategy. Ageing populations provide one such example where depending on extremities, there really wouldn’t be a dire need for accommodations in the systems of education and child-care, while apt medicare solutions are clearly conceivable on their own without needing to incorporate a fully centralized state welfare system.

All in all, the Nordic countries offer something that very few other democracies do: the willingness of individuals, businesses, and government to all cooperate across party lines. Because of this unique capability, Scandinavian nations have been able to prop themselves up on a fairly unprecedented system of standardized social welfare which has the support of all parties. The reality remains though, that this strategy is not transferable to other democratic nations given the parity that exists on each of the social, political, and economic fronts among interested parties.

1 comment on “Is the Scandinavian Socio-Economic Strategy Transferable?

  1. Andrew

    Canada has an opportunity to go with the Scandinavian model, but the economic pull from the U.S. will prevent such a move to happen. American companies have a strong presence in Canada as well, such as Walmart, Home Depot, Apple, etc.

    The pressure of lowering corporate taxes in Canada is never ending and hence the country will line themselves more with the U.S. for the foreseeable future.

    Like

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