The Nordic social model: empowered by paradox
Can a capitalist system champion generous public welfare? Can a wealthy society embrace the principle of equality? Can collectivism thrive where individualism rules? Why, certainly. The Nordic countries, for example, appear to have found a way. According to recent research, this ability to reconcile potentially conflicting concepts is central to their economic success. The study, funded by the Research Council of Norway (RCN) and presented on 24 February, enabled 10 Nordic researchers from diverse scientific backgrounds to assess the Nordic model as an alternative form of capitalism, prosperity and welfare. The emphasis on varied viewpoints was no coincidence. 'It is crucial that researchers with an eye for an interdisciplinary approach bring their perspectives to the debate,' says Anne Kjersti Fahlvik, Executive Director of the RCN's Division for Innovation. The project was led by Professor Atle Midttun at BI (Bedriftsøkonomisk Institut) Norwegian School of Management and Research Professor Nina Witoszek of the University of Oslo. So what shapes the Nordic social model? 'In a country like Norway,' says Carlos Joly, visiting professor at ESC (École Supérieure de Commerce) Toulouse (France) and former director of a large Norwegian financial company, 'there is a general view that society should be based on equitable distribution. This was how Norway and the other Nordic countries responded to the major conflict that arose between capital and labour at the beginning of the previous century. Today this equity is built on foundations such as the collective agreements for workers and the state arbitration institutions.' Per Ingvar Olsen, associate professor at BI Norwegian School of Management in Oslo, confirms the role of collective bargaining, and more specifically mentions the accompanying low levels of unemployment. 'More people working,' he notes, 'means more tax revenue for the government. The middle classes are subject to high rates of taxation and in this way acquire a stake in the state. This creates the basis for high levels of welfare.' In addition to a firm commitment to fairness, the researchers highlight a strong sense of solidarity - invigorated, rather than eroded, by a marked tendency towards individualism. 'In the Nordic countries', says Lars Trägårdh, a professor at the Ersta Sköndal University College in Stockholm (Sweden), 'most people are able to free themselves from both the family and the local community around them. We have become individualists. This has had huge significance, not least for the emancipation of women. Weak patriarchal structures and less dependence on others means that many people in the Nordic countries feel that they have control over their own lives.' According to Professor Witoszek, 'The Nordic model cannot be explained purely in terms of economic policy, specific institutions and good fortune. The model also has deep-lying cultural roots.' She emphasises the role of education and culture in the distribution of a society's wealth, their long tradition throughout the region, and the unique nature of the Nordic modernity that emerged at the end of the 1800s - a specificity which, she speculates, may limit the model's transferability to other regions. Iceland recently chose a different path, which notably involved cutting taxation and selling off a range of public assets, remarks Throstur Olaf Sigurjónsson, assistant professor at Reykjavik University School of Business. 'A few years ago in Iceland we viewed the welfare state as an outdated phenomenon.' A view that was challenged by the collapse of the economy in 2008 and which, he says, has rekindled Iceland's interest in the approach of its Nordic neighbours. Is there a downside? Sustainability appears to be a cause for concern - even in this part of the world, with its strong record of environmental protection, which the region's distinctive social model helped to shape. But issues such as climate change, says Professor Lennart Olsson of Lund University in Sweden, are a very different type of challenge. 'It is now no longer a question of removing sulphur from petrol, which could easily be done,' he notes. 'Now it is about the total ecological footprint we are leaving behind us. Today the Nordic countries are lagging behind the EU average in this respect. The inhabitants of the Nordic countries are major consumers of the world's scarce resources.' 'If you share a billion crowns equitably between a thousand people,' comments Professor Midttun, 'the likelihood is that it will lead to greater environmental damage than if you allow one individual to have all the money.' Should the Nordic countries curb their economic growth for the sake of sustainability? According to various members of the team, that would amount to throwing the baby out with the bathwater. Instead, they recommend that the region redefine its concept of growth, and find smarter ways to consume. Interesting advice indeed, which is likely to resonate well beyond the region's borders. For more information, click:Research Council of Norway:http://www.forskningsradet.noTo download the report, click:http://www.forskningsradet.no/en/Newsarticle/The_Nordic_social_model_Sustainable_prosperity_and_welfare/1253964904388: (here)
Countries
Denmark, Finland, Iceland, Norway, Sweden