Wednesday, June 24, 2015

The End of Nordic Illusions

by Nima Sanandaji

Wall Street Journal

June 24, 2015

Helle Thorning-Schmidt lost her seat as Denmark’s first female prime minister in the general election last week. The result seems to fit the current trend in the Nordic region of traditional social-democratic parties in decline giving way to populist anti-immigration parties on the rise. However, parties on both the right and left have much to learn from debate that the Danish Social Democrats have sparked about the future of the welfare state.

The Nordic model has long been admired abroad. It has been seen as a way of combining economic growth with admirable social outcomes. But the simple idealization is misleading.

Denmark, Finland, Norway and Sweden aren’t set apart only by social-democratic policies but also by a unique culture built upon trust, a Lutheran work ethic and a strong emphasis on personal responsibility. These cultural features, combined with healthy lifestyles, allowed Nordic nations to develop high living standards, income equality and long lifespans during the first half of the 20th century. The success also arose during a period when policies were based upon low taxes and free markets.