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Nordic FAQ - 2 of 7 - NORDEN
Section - 2.8 Nordic Socialism and welfare

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   The Nordic societies can be characterized as countries with rather
   subtile class differences. To define which class people belong to has
   become harder in the last 50 years, when the democracy has led to
   compulsory education and social insurances for everyone. Equality has
   been the slogan best remembered from the French revolution, and strong
   labor unions have achieved many of their goals, with for instance
   manual workers often earning well as much as lower officials and
  2.8.1 Wouldn't the Nordic economies gain from abolishing Socialism?
   Let's make a few things straight!
   The words "Socialism" - "Liberalism" - "Conservatism" are used in a
   very different way in the USA compared to the usage in the continental
   Europe and in Norden. In soc.culture.nordic we use these words as they
   are understood in Europe:
   Liberalism and Socialism are in Europe basically defined as ideas with
   a great deal of heritage from early Liberal and Socialistic writers.
   Liberalism could be said to revolve around freedom from the power of
   the mighty, and Socialism around freedom from the power of the rich.
   Democratic freedom is per definition a Liberal virtue.
   Some Social democrats might be classified as much of a Liberal, but
   most are definitely not. The program of the Social Democratic parties
   are not understood as Liberal, but when it comes to practical
   pragmatic politics and policies the outcome might be a mixture between
   the own program and other ideas.
   Conservatism is likewise defined as ideas succeeding the writings of
   Burke, Disraeli and other classical political writers. There are two
   major branches among the Conservatives: the Social-Conservatives and
   the Value-Conservatives. The Value-Conservatives? Oh, that's people
   who speak a lot of the importance of the church, the army, the family
   and maybe the crown (king/ government) and are very happy to spend all
   the tax money on those institutions instead of extravagances on
   children, disabled and unemployed.
   Socialism is the people's control over the means of production.
   High spending government is something different.
   This phenomenon comes in different wrappings: Feudal, Authoritarian
   Conservative, Fascist, Social Liberal, Social Democrat, Christian
   Democrat and so on.
   As an ideology, Socialism deals more with the political basis than
   with the implementation. Nobody can justify taxation as a goal, that
   politicians and civil servants are always right, that it is a goal to
   confiscate any kind of private property. There are some Socialist
   ideologies that want society to build upon omnipotence. All but tiny
   extremist groups have survived. Most were slaughtered in Eastern
   The Socialist ideology was more a visionary romantic one than a
   practical political theory. There is a little bit of the rhetoric left
   (for internal use) in the Social Democratic parties, so maybe one
   could call them Socialist. Then there are the proper Socialists on the
   left of the Social Democrats. Some of the Nordic still worship Karl
  2.8.2 Don't the Nordic states have huge welfare expenditures?
   "Welfare" in this context has nothing to do with welfare as the word
   is understood in the USA. It stands for a word ("välfärd" as spelled
   in Swedish) approximately translated by the intention to control
   un-employment and poverty by governmental regulation and actions. This
   is not a particular phenomenon for Scandinavia, or for recent times,
   but have to greater or lesser extent been on the program for nearly
   all parties ruling in the industrialized Europe (i.e. for over a
   hundred years).
   Subsidies to industries have been popular among nearly all parties,
   for instance. The health care system, the tax financed school system
   (including student loans) and the mandatory participation in schemes
   for loss of income at retirement, disability, sickness or unemployment
   has got a solid support by something like 90% of the politicians and
   95% of the Nordic voters. The differences regard adjustments, not the
   idea as such.
  2.8.3 But you do pay terrible taxes, don't you?
   Also people who are Conservative, by Nordic standards, support the
   basic concept of sharing a public responsibility for education and
   health care. We can discuss the efficiency of the government in
   running these programs, but you're not going to convince many
   Nordeners that the solution to inefficiencies is to move the
   responsibility to the individual.
   Since the education of the youths is paid for through taxes instead of
   parent's earnings, the most intelligent kids get educated regardless
   of wealth. This is an advantage for the country as a whole. You can
   also say: The educated pay back for their education through taxes.
   The same applies to the health care, which additionally seems to be
   remarkably cost efficient in the Nordic countries (compared to the US
   at least).
   We all will need support around our birth, during the time when we
   grow up, when we get ill and when we get old. We all need education.
   Those needs are as common as our general need for streets and law and
   order and protection by an army. All will probably become seniors. In
   any case, all have reason to prepare for that. If the preparation is
   made by individual savings or by mandatory contribution to a general
   system is the difference. The cost for living and health care during
   your last years won't change if you live in a libertarian state or in
   the nanny-states of Europe. The only difference is the method of
   paying. Here you pay in advance via the tax system.
   The same goes for primary and secondary education. All who earn money
   have once upon a time used the pre-schools and schools, and in our
   society you pay for it through the tax some years later. In other
   systems you "borrow" it from your parents when you use the service,
   and then "pay back" to your kids when they grow up.
   Neoclassical economists use to argue that the high taxations in the
   Nordic countries must lead to high unemployment, low productivity, low
   rates of investments and too little incentives to work and innovate.
   Now and then these arguments are presented in s.c.n., and regularly
   the following will be presented:
   The Nordic experience shows that 50% taxation is not too high to keep
   most people from working. In the 80s there was full employment despite
   high taxes and an extensive social security system. People still
   prefer work to unemployment. Sweden could maintain full employment
   until 1990s, but now the open unemployment is higher than in the US,
   although the criteria of the statistics differ.
   The Nordic model worked well till the 90'ies economic depression, but
   it may have gotten into trouble in some of the countries now. On the
   other hand, one could argue that thanks to this model the recession in
   the beginning of the 90'ies became moderated in a very favorable way,
   compared for instance to the development in the United Kingdom.
   It's often noted that the level of investments in Finland only some
   5-10 years ago was very high, maybe too high, and that Sweden has a
   trade surplus (i.e. producing to a higher value than they consume)
   whereas USA has a trade deficit.
   Productivity is relatively high in Norden. Social security does not
   lower productivity. In fact U.S. style low pay employment does not
   have as great incentives to high productivity as the Nordic union
   negotiated pay model.
   Among the positive sides of this high-taxation system, one can note:
     * almost no poverty or starvation, as is the case in American
     * virtually no homelessness problem
     * very little crime
     * equal opportunity to education & health care, regardless of the
   Another example is that if a US worker is forced to have an expensive
   car and drive for two hours each way to get to work, spending money
   burning gasoline, that shows up as a bigger contribution to GDP than
   that of the Finnish worker who lives in a comfortable cogeneratively
   heated house out in Käpylä, doesn't need a car, and rides an
   inexpensive tram in to work.
  2.8.4 Now, when the Soviet Union has fallen, you are free to liberate your
   What often seems to be forgotten is that the Nordic countries have the
   same balance in political life as Canada and the US - namely
   (apparent) democracy. Nordics have a right to choose whether they want
   to spend public money on welfare, health care and education or not.
   They do so by participating in elections, in numbers varying between
   70% and 90% of those eligible to vote (unlike the U.S. where 50% of
   registered voters is considered a great turnout). Our representatives
   come from many parties in approximate proportion to the vote (whereas
   the U.S. is often "winner-takes-all"). They enjoy (relative) freedom
   of speech, freedom of religion, and (most) benefits of market
   economies. That's why you'll get a cold shoulder if you try to label
   them Socialists, plainly state that their welfare system is broken and
   needs fixing, that their culture needs to be preserved from outside
   influence, and so on. It's a choice, and the Nordics are doing their
   best in exercising this choice in a manner consistent with their
   values and their culture.
   But it is a fact that the countries in the western (democratic) part
   of Europe never became "free capitalistic" states as the USA, and
   Americans see clear similarities between the western European
   societies and the communist ideals.
   Some writers use to argue that it's because the US didn't introduce
   any of what is now known as libertarian thought, that hardly any
   countries in this part of Europe bothered to try them. Or that the
   Nazi influence scared most countries off in trying a political
   ideology other than communism.
   It's a misconception to believe that all of Europe was forced or
   tended to adopt a "Socialistic" policy after the 2nd World War. After
   the war, the only thing which with force could have been an agent for
   Socialist or collectivist policies where the politic, economic and
   historic realities in the respective countries. What happened in East
   could not enforce Leninism (or related ideologies) in the democracies
   west of the iron curtain. Quite the contrary.
   An alternative view is that Marxism is a product of collectivist
   Old-world thinking, and that it's the Old-world customs which
   Americans recognize in Socialism.
   One outgrow of this Old-world collectivism and stress on homogeneity
   is most probably the way people feel responsible for each other, and
   each other's kids, in Scandinavia. Maybe it's wrong to connect this
   with press reports on scientifically determined sign of how unpaid
   voluntary work is more prevalent in Scandinavia than in any other part
   of Europe. But it's tempting when Yanks stress this aspect of their
   society as something where they are world leading.
   One could say that after ww2 not much changed. The societies were as
   centralistic and non-individualistic as they had been since
   god-knows-when. Democracy was re-established in the parts of Europe
   which weren't governed by Soviet troops. That was the main influence
   of UK/USA - except for the economical and cultural.
   Liberalism was not at all unknown to Europeans. Nor Conservatism. All
   the time from the 1848-revolutions is marked by the reaction on the
   danger of the urban concentrations of proletarians. Marxism, late
   19:th century Social Conservatism and Liberalism are the most obvious
   signs. What happened after the first world war, 1918, was the success
   of Liberalism with full democracy in all countries, and then a
   backlash when non-democrats came to power either through democratic
   elections, or as a response to the unstable governmental situation
   which the democracy had led to: In short the political map of the
   pre-ww2-societies in Europe could be described as consisting of three
   blocks. Socialists, Liberals and Conservatives. All three in
   opposition to the other two. (The fascistic movements are then
   associated with the Conservatives, which is true if one regards
   alliances, but not quite true if one looks more directly on propaganda
   and programs.)
   The Socialistic block was split between reformists and revolutionists.
   And in some countries it was the reformists and the Liberals who
   together were strong enough to compete with the anti-democratic
   After the second world war the Fascist parties had lost all
   For the people in the destroyed Europe (well, west of the iron
   curtain) non-individualistic solutions were judged as most fit, as
   typical in the German sick insurance system or centralized accords for
   agreement on wages. I think one could say that most people
   (sympathizing with all three blocks, the Conservative, Liberal and
   Socialist) favored collectivist solutions, seeing democracy as
   collectivist. The most individualistic tendencies were to be
   discovered among Liberals.
   The difference between Germany and Norden was not the intentions, but
   the different positions the societies had to start from.
   Germany was destroyed. The Nordic societies were not.
   The eastern part of Europe (if Russia included, far more than the
   half) learned to know the Russian masters and their ideology. It was
   however only a tiny minority in West who aimed at a development as in
   the Soviet satellite states.
  2.8.5 What are the differences of the economies of the respective Nordic
Norway  - the oil incomes, the fish industry.
Denmark - virtually none. (Lower beer taxation.)
Sweden  - lower income taxes; other taxes and national debt higher.
Finland - the highest unemployment rate.
Iceland - the dependency on fishing.

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