Nordic model
[1] This includes a comprehensive welfare state and multi-level collective bargaining[2] based on the economic foundations of social corporatism,[3][4] and a commitment to private ownership within a market-based mixed economy[5] – with Norway being a partial exception due to a large number of state-owned enterprises and state ownership in publicly listed firms.
They all support a universalist welfare state aimed specifically at enhancing individual autonomy and promoting social mobility, with a sizable percentage of the population employed by the public sector (roughly 30% of the work force in areas such as healthcare, education, and government),[8] and a corporatist system with a high percentage of the workforce unionized and involving a tripartite arrangement, where representatives of labour and employers negotiate wages and labour market policy is mediated by the government.
[12] The Nordic model began to gain attention after World War II[13] and has transformed in some ways over the last few decades, including increased deregulation and expanding privatization of public services.
[6] The Nordic model is described as a system of competitive capitalism combined with a large percentage of the population employed by the public sector, which amounts to roughly 30% of the work force, in areas such as healthcare and higher education.
In January 2013, The Economist reported 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.
[57] According to sociologist Lane Kenworthy, the meaning of social democracy in this context refers to a variant of capitalism based on the predominance of private property and market allocation mechanisms alongside a set of policies for promoting economic security and opportunity within the framework of a capitalist economy as opposed to a political ideology that aims to replace capitalism.
This corporatist system is most extensive in Norway and Sweden, where employer federations and labour representatives bargain at the national level mediated by the government.
[66] The Nordic labour market is flexible, with laws making it easy for employers to hire and shed workers or introduce labour-saving technology.
Denmark features a high degree of private sector provision of public services and welfare, alongside an assimilation immigration policy.
[71] They have been at the front of the implementation of policies that promote gender equality; the Scandinavian governments were some of the first to make it unlawful for companies to dismiss women on grounds of marriage or motherhood.
[74] 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.
[75] The term 'peasant republic' is sometimes applied to certain communities in Scandinavia during the Viking Age and High Middle Ages, especially in Sweden, where royal power seems to have been initially somewhat weak,[76] and in areas of modern day Sweden that were not under the rule of the Swedish king yet, as well as in Iceland where the Icelandic Commonwealth serves as an example of an unusually large and sophisticated peasant republic building on the same democratic traditions.
Following a long period of economic crisis and class struggle, the "grand compromise" served as the foundation for the post-World War II Nordic model of welfare and labour market organization.
The influence of each of these factors on each Nordic country varied as social democratic parties played a larger role in the formation of the Nordic model in Sweden and Norway, whereas in Iceland and Finland, right-wing political parties played a much more significant role in shaping their countries' social models.
[11] The early 1990s recession affected the Nordic countries and caused a deep crisis in Finland, and came amid the context of the dissolution of the Soviet Union and collapse of trade from the Eastern Bloc.
For a period between the 1980s and the 1990s, Norway underwent more neoliberal reforms and marketization than Sweden during the same time frame, while still holding to the traditional foundations of the "social democratic compromise" that was specific to Western capitalism from 1945 to 1973.
[11] As of 2007, the Norwegian state maintained large ownership positions in key industrial sectors, among them petroleum, natural gas, minerals, lumber, seafood and fresh water.
In all the industrial democracies and beyond, this recent era has seen the retrenchment of the welfare state by reduced social spending in real terms, tax cuts, deregulation and privatization, and a weakening of the influence of organized labor.
The Meidner Plan aimed to collectivize capital formation in two generations by having the wage earner funds own predominant stakes in Swedish corporations on behalf of workers.
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.
[92][93][94] Scandinavian political scientist Daniel Schatz argued that Sanders is wrong, saying that "the success of Nordic countries like Sweden – as measured by relatively high living standards accompanied by low poverty, with government-funded education through university, universal health coverage, generous parental-leave policies and long life spans – precedes the contemporary welfare state.
[100] American author Ann Jones, who lived in Norway for four years, posits 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.
"[53] 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.
[103] Socialist economists Pranab Bardhan and John Roemer criticize Nordic-style social democracy for its questionable effectiveness in promoting relative egalitarianism as well as its sustainability.
Roemer and Bardham posit that establishing a market-based 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.
[107] By contrast, they suggest that if one takes a broader perspective on well-being incorporating, such as social issues associated with bodily integrity or bodily citizenship,[108] then some major forms of men's domination still stubbornly persist in the Nordic countries, e.g. business, violence to women, sexual violence to children, the military, academia, and religion.
[109][110][111] While praising the Nordic model as a "clear and compelling contrast to the neoliberal ideology that has strafed the rest of the world with inequality, ill-health and needless poverty," economic anthropologist Jason Hickel sharply criticizes the "ecological disaster" that accompanies it, noting that data shows the Nordic countries "have some of the highest levels of resource use and CO2 emissions in the world, in consumption based terms, drastically overshooting safe planetary boundaries," and rank towards the bottom of the Sustainable Development Index.
He argues that the model needs to be updated for the Anthropocene, and reduce overconsumption while retaining the positive elements of progressive social democracy including universal healthcare and education, paid vacations and reasonable working hours, which have resulted in much better health outcomes and poverty reduction compared to overtly neoliberal countries like the United States, in order to "stand as a beacon for the rest of the world in the 21st century.
"[112][113] Swedish economist John Gustavsson, writing for American conservative magazine The Dispatch, criticized the Nordic model for its high taxation rates, including on the middle class and poor people.
"[116] In a speech at Harvard's Kennedy School of Government, Lars Løkke Rasmussen, the centre-right Danish prime minister from the conservative-liberal Venstre party, addressed the American misconception that the Nordic model is a form of socialism, which is conflated with any form of planned economy, stating: "I know that some people in the US associate the Nordic model with some sort of socialism.
