(April 2, 2020) — For many Americans, it’s time for a system change along the lines of the Nordic model.
This has the political establishment deeply worried.
Emergencies have a way of shaking up old, limiting beliefs. The coronavirus pandemic is pushing people back to the drawing board.
In the United States, many are noticing the institutional failures forced on us in recent decades, during what billionaire Warren Buffett calls the “class warfare” waged by the economic elite. The health crisis opens the door to bolder thinking. Even establishment politicians today consider moves that cost trillions, but their motivation is to save the existing system, not to transition to a better one.
For many Americans, however, it’s time for a system change. Fortunately, we don’t have to start from scratch. The American left in recent years has been shaking off its vision-aversion that began in the Reagan presidency.
In 2016 the Movement for Black Lives took the initiative with its vision: measures needed to make racial and economic justice a reality. Ever since, activists have been waking up to the need. Grassroots people in Vermont even created a statewide Vision Summit.
This trend is crucial for all activists, whether or not their favorite thing is to think about systemic change. History suggests that the social movements that make the most difference are those that project a vision, especially when it can be expressed in common sense terms.
Vision Now Threatens The US Political Center
Establishment political leaders, both Democrats and Republicans, are in trouble. The past four years have not been kind to them, and not only because of the uncontrollable Trump. In 2016 Bernie Sanders emerged from the margins to gain political traction with bold alternatives. He proudly identified as a democratic socialist. He couldn’t be dismissed as an irrelevant left ideologue because he used the Nordic model as a vision-turned-practical, a brilliant success in the real world.
His argument is reinforced at this moment when, during the epidemic, we look across the Atlantic and find dramatic Nordic initiatives that are made possible by the advantages of their model.
In March, the Danes — looking ahead because that’s what democratic socialists do — realized that after the epidemic the economy will re-start more quickly and smoothly if people simply return to their previous work. And the way to guarantee that is to pay their regular wages in the meantime.
Denmark therefore decided to “freeze” its economy for 13 weeks, maintaining payrolls while safety requires temporary lay-offs of most workers. Workers will receive their full wages while at home. The employers pay 25 percent of the cost while the government pays 75 percent. The plan means spending the equivalent in the United States of a $2.5 trillion stimulus!
Even in ordinary times, the Nordic region is where you’ll find the best countries for women, for elders, for raising children, for equality, for environmental performance and even for individual freedom. Black Americans settling down in Oslo even find relief from most of the racism they encounter in the United States.
In all these ways and others, the Nordic countries far out-rank the United States — which is why this country is now rated as a “flawed democracy.”
The researchers issuing the World Happiness Report were struck by finding the Nordics consistently at the top. In the current report they devote a chapter trying to come up with reasons. They conclude that the Nordics’ superior performance has nothing to do with their size, or even historic homogeneity. (In recent years Nordic governments have welcomed migrants, diversified and still managed to hold their place in the top tier.)
What many Americans forget is that a century ago the Nordic countries were a mess. Poverty, inequality, lack of freedom drove millions to emigrate to Canada and the United States. Now the situation is reversed. Even by measures of social mobility, the American Dream has fled the United States and gone to live in Scandinavia. In my book “Viking Economics” I tell the dramatic story of how Sweden and Norway made their big turn-arounds.
All these facts cause worry among American political centrists, who may want some limited reforms here but nothing like the dramatic changes made by the Nordics — especially not the power shift within those countries that made possible their new model.
Ignoring The Nordics Is Proving Impossible
For decades the American establishment counted on a simple strategy: ignore them! Academia used to conform. While criss-crossing the United States on book tours I’ve asked economics majors, both undergrads and graduate students, what they were being taught about the Nordic model. The answer was almost always “nothing.”
“Not even in comparative economics?” I asked.
“No, why should we learn about what they do in Scandinavia?”
I offered a hint. “Because it’s the most successful economic model yet invented.”
Happily, the academic abdication is changing. I’m getting invitations from colleges and universities — even a business school — to describe the Nordic model. Bucknell University gathered all its Econ 101 students in an auditorium for the purpose, where I met wide-awake students full of questions.
Pundits Come To The Rescue Of The Establishment
Alert to how dangerously attractive the Nordics are becoming to Americans, establishment writers like David Brooks, Fareed Zakaria and Thomas Friedman are coming to the rescue. Some use the rhetorical device reminiscent of George Orwell’s “1984,” in which a banner proclaims: “War is peace.” Or, as Anu Partanen and Trevor Corson put it in the New York Times: “Finland Is a Capitalist Paradise.”
Rather than using the strategy of an earlier generation, warning us of the dangers of “collectivism,” current establishment writers acknowledge the Nordic success, then re-brand it as capitalism. The problem for these writers, however, is explaining how those pesky Nordics became so much more successful than our country, which is supposed to be capitalism’s shining star.
From my audiences the answer I hear most often is oil and gas. “The Nordics can provide all these goodies that we would like to have because they are afloat in oil.” (They overlook the oil and gas in our own backyard, sometimes literally.)
The trouble with the oil explanation is that only Norway has a treasure trove of oil and gas. Denmark has little, and Finland, Iceland and Sweden have none. Yet those other countries join Norway in the top of the heap on multiple international ratings.
What they do have in common, with some individual differences, is their economic model.
Actually, oil doesn’t account for even Norway’s main achievements. The North Sea oil didn’t come on line until the 1970s, and Norway pretty much got rid of poverty before that time — as did their Nordic cousins.
The Norwegian oil story does tip us off, however, to how mistaken it is to call these countries “capitalist.” When the oil was discovered the people had a national debate: who will own it, and how will it be handled?
Capitalists believe the answer to those questions is obvious: private ownership, the same as with other resources like coal.
In the Nordic model, on the contrary, it’s the people who decide the direction of the economy. There’s a reason it’s called democratic socialism, or social democracy.
After debating, Norwegians made several decisions. First, oil and gas would be owned by the people as a whole. Second, the government would set up a nationalized company to extract, refine and sell it. Third, the company would avoid a boom-and-bust cycle, protect the integrity of cities near the oil fields, employ a highly-paid, unionized workforce, and maintain the highest environmental standards. Further, the proceeds would benefit the people as a whole, and aside from a small fraction of profits going to fund national projects, the money would go into a nationally-owned “pension fund” for future generations.
Does this approach in any way resemble the capitalist history of United States and its global exploitation of resources, workers and communities?
Maybe It’s The Culture
In his New York Times column “This is How the Scandinavians Got Great,” David Brooks attributes Nordic achievement to the evolution of their education system. As he says, in mid-19th century Denmark the folk high school movement began to make a powerful and lasting impact.
Between harvest and spring planting, farmers could take time to attend the residential schools and learn in an atmosphere that nurtured inner awareness, cooperation, innovation and big picture critical thinking. Members of Danish working class families could come, too. Norwegians adopted the growing movement, and then the other Nordics.
David Brooks leaves out the role of folk high schools in building leadership for the growing cooperative movement, an alternative to capitalism that enabled both producers and consumers to “eliminate the middleman” and become more prosperous.
A bigger problem for Brooks is trying to link the new education to the building of “social trust.” True, today the Nordic peoples exhibit enormous trust in their governments and other institutions. That trust pays off in addressing emergencies like the coronavirus. Also true is that the education movement helped ordinary people build trust in each other, hence the coop movement.
Brooks clearly wants education to be able to play that role, given his alarm about Americans’ present lack of trust in the US establishment. He seems to hope that, if the battered and starved US educational system could somehow flourish once again, maybe we Americans, too, could trust each other and our institutions — and obtain the rewards of the Danish system!
The trouble is that the big-picture — critical thinking featured in Nordic education doesn’t necessarily yield trust. Instead, it gives tools for citizens to evaluate their social reality. They learn to discern what is — and is not — worthy of trust.
Danes educated in this way could both experience the positives of their community and see that their society in the 1800s was stuck between sentimental loyalty to a feudal past and dreams of riches in a future of competitive capitalism.
Most Danes wanted neither their feudal past nor a dog-eat-dog capitalist future. They were far more inspired by the socialist vision brought to them by the Social Democrats, which became Denmark’s largest party. Having gained literacy and confidence, they could read socialist materials and discuss them. Factory workers could form study groups.
Far from blessing capitalism, the masses of Danes after World War I launched a nonviolent struggle for economic justice, and then in 1924 became the first of the Nordic peoples to elect a social democratic prime minister. Networking with their socialist comrades in other Scandinavian countries, they laid early groundwork for what economists now call “the Nordic model.”
I found while teaching in a Norwegian high school that, even in modern times, Nordic education supports students to notice that there is such a thing as a class structure. The name of one of Norway’s government-subsidized daily newspapers is Klassekampen, or “Class Struggle.”
The pay-off of Nordic education continues, but not in the way David Brooks imagines. When in the mid-1980s Ronald Reagan and Margaret Thatcher were urging the view that economies thrive through deregulation, the Danish government tried to follow the neoliberal example.
In response, Danish workers declared a general strike and 100,000 surrounded the parliament building to stop neoliberal legislation from getting through. The government was forced to back off.
Denmark thereby avoided a deep recession of the kind that later, in 2008, marked the United States, United Kingdom and many other countries. The reason we know Denmark dodged the bullet in the 1980s is that the workers of Norway and Sweden were not so alert. Their governments went for the Reagan/Thatcher line and deregulated their banks.
The bankers went wild, created a bubble, and in the early 1990s most banks tottered, sending both countries toward the financial cliff.
The crisis returned Sweden and Norway to their senses. Because their basic social democratic model was still intact, their governments could seize the largest banks, fire the senior management, make sure the shareholders didn’t get a krona and restore the previous regime of heavy regulation.
Norway learned its lesson so well that it chose public ownership of Norges Bank, the country’s biggest. By 2015 Norway’s public institutions (co-ops, municipalities, the state) owned roughly 60 percent of the country’s wealth — again not exactly what we expect of capitalism!
The lesson for David Brooks from the Nordics is the opposite of his hoped-for trust: a good education prepares workers and other thoughtful people to expect that, even within the Nordic model, class struggle will continue.
Why We Must Counter Attacks On The Nordic Model
In the next part of this series I’ll respond to more writers in the mainstream media who mis-characterize the Nordic model. There’s a reason to counter their effort to co-opt the most attractive vision we have.
The reason lies in how we win. Successful movements lift up a vision of change that we can describe in common-sense terms. A vision supports us to move from protest to change, from reacting to going on the offensive.
A vision enables us to reach the scale we need to win. It inspires people to sacrifice and transform their anger into a positive spirit that moves others to join.
The US establishment is afraid to describe accurately the Nordic achievement because its success shows pragmatic Americans that a really different model, even though technically a hybrid of capitalism and socialism, is practical.
Of course US radicals may want to go farther than today’s Nordics’ achievement — Nordic radicals do, too. But our call in the United States to “go farther” will be credible only when we show we can sustain a mass “movement of movements” to force major change.
If our movements cannot generate the power to get what the Nordics have, why would people join us when we proclaim even loftier goals?
These are some of the questions alive in this moment of motion and change.
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