I sent a letter to the editor with a reasoned critique of this ideological misconception. It says a lot about the editorial policy of the Economist, that despite welcoming their readers´comments they somehow failed to publish any serious critique. Here is the text, which they did not publish:
SIR –
Mr. Wooldridge´s attempt to explain the Nordic model´s roaring success in the era of globalization as a sort of neo-con comeback (Special report: The Nordic countries, Feb. 2, 2013), is far from the truth and by implication almost pathetic.
The Nordic model was never about destroying capitalism, but about taming it. It was never about disrupting markets, but about keeping them competitive and under social control. It is exactly the failure to follow this example which is causing all the troubles in America and parts of Europe these day. As Tage Erlander – Sweden´s social-democratic PM for a quarter century and arguably the greatest reformer of his time – famously said: „The market is a useful servant, but a brutal master“.
Unlike British Labour or continental socialists, Swedish social-democrats never nationalized anything. Instead they used their popular mandate as a ruling party for 70 years to build one of the most egalitarian societies on earth. They did it, i.e. Through progressive taxation, free universal education and health care and obligatory contributions by employers and employees to a comprehensive pension system.
By those means they expanded the scope of freedom for the many (as Olof Palme never tired to remind us) and prevented plutocrats from usurping political power by buying it. This is what is really unique about the Nordic model: The representatives of Labour – not the owners of Capital – created an egalitarian society, by democratic means, instead of merely accepting the unequal outcome of market forces. This is the only socio-economic model designed in the last century which has withstood the test of time with flying colours.
Mr. Wooldridge admits as much when he says: „The Nordics also have a strong record of drawing on the talents of their entire population… They have the world´s highest rates of social mobility; in a comparison of social mobility in 8 advanced countries… They occupied the first four places. America and Britain came last.“
And Mr. Wooldridge goes on: „They (the Nordics) have also largely escaped the social ills that plague America. On any measure of the health of a society – from economic indicators like productivity and innovation to social ones, like inequality and crime – the Nordic countries are gathered near the top.“ – In other words: The Nordic Welfare State has replaced America as the „land of opportunity“.
In wanting to give credit for those remarkable achievements to neo-con missionaries, who have been given the chance for the past few years to tinker with the system at the margin, Mr. Wooldridge is badly mistaken. As a matter of fact, he couldn´t be further from the truth.
Some of the cited „reforms“, such as contraction of the pupblic sector or the lowering of marginal tax-rates, are ajustments imposed by competitive pressures, and introduced mostly by the social-democrats themselves. Others, of a more ideological nature, such as ill-adviced experiments in privatization of care for the elderly, have turned out to be failures.
The Nordic model – the historic anti-thesis of both the totalitarian state and the neo-con market-fundamentalism – remains the proud achievement of the social-democratic labour movement of the Nordic countries, and is still intact. But Mr. Wooldridge is absolutely right on one score: Those societies are by most accounts the most successful ones so far, in combining general prosperity, social justice and environmental protection. Or if you like – equality and efficiency.
Jón Baldvin Hannibalsson
Former Minister of Finance and Foreign Affairs of Iceland
Álfhóli, 270 Mos – Iceland
Email address: jon.baldvin@simnet.is
Gsm.: + 354 895 6362