Social welfare not corporate welfare

Drawing on a US political analogy, Sixten Korkman, Managing Director of ETLA, explained that that in the Nordic countries social welfare had not come at the expense of their ability to compete in the global marketplace. In other words, these countries showed that what’s good for society can be good for companies.

Taking the current US debate over health care reform, Korkman said, “You can have collective solutions that are also good for business -- argument for publicly funded health care (as opposed to employer financed as in the US).”

I thought this was a good example. One explanation for the bankruptcy of GM is that the company had been weighed down by having to foot the bill for employee healthcare -- money that could have been invested in making the cars of the future.

What's the miracle of the Nordic countries' economies? Sixten Korkman, Managing Director of ETLA (The Research Institute of the Finnish Economy) and EVA (Finnish Business and Policy Forum) listed three points that seem to characterize Nordic Democracy.

1. Spending more on education
2. Social security
3. Keeping people working

He added, “You can typically find a Nordic ‘cluster’ (in statistical analysis). This suggests it’s real. You can talk about these countries as a distinct group.”

The main point? “The Nordic countries,” Korkman said, “represent a more liberal economic systems than everyone in Europe except Anglo-Saxon countries.”

“But is the model successful?” Korkman asked. “Yes, generally speaking, it is. Take one key variable: Social mobility. Inter-generational mobility higher than in France, UK, and the USA.”
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Read former Minister of Finance for Sweden Pär Nuder's outline of the six points that explain the Nordic countries' economic success here. What's the main thing Nuder says they do right? See here. Or read the entire panel discussion here.