Here's a perfect storm for Den: Nordics, NYT wokeness/bias, economics.
It's been a pet peeve of mine for a decade to lecture (=correct) Americans who think they know something about the Nordics
I wrote in May (on a similar mainstream media post glorifying and romanticizing a Nordic country) about my favorite self-own re: Americans with a hard-on for superficial Nordicness:
Back when Bernie Sanders was out shouting in the media -- and said things like "We should be more like SWEDEN!" -- our Cato-affiliated friend, Johan Norberg, #607347, #969787, wrote op-eds and went on television saying... YEES, America should be more like Sweden: you know, more free trade, less onerous bureaucracy, better protection of property, integrity of government etc, and all the other ways in which Sweden outperforms 'Murica in economic freedom (= every metric but size of government. Duh.)
(Scandinavian Unexceptionalism is a good, easy-to-read introduction if you wanna have a grasp on these themes... and be a complete buzz-kill at your local, liberal meet-up or Thanksgiving dinner)
Here comes Mr. Kristof who may have been "reporting from Norway," but wasn't quite doing his due diligence as a journalist in reporting accurately how Scandinavia differs from America.
His overall take is: look, there are American firms in Norway, and they pay higher/offer better deals to workers than the same American firms in America. So. Maybe we could be more scandi?
Construction workers, hotel maids, gas station attendants and store cashiers will typically earn more than $20 an hour plus evening or weekend bonuses, about five weeks’ paid vacation each year, a pension, maternity and paternity leave that add up to a year and paid leave when a child is sick. You may even get paid time off if you move homes.
Those are broadly the terms for Norwegian and foreign companies alike, including the likes of 7-Eleven shops, Burger King restaurants and ExxonMobil-affiliated gas stations. Which raises the question: If American and other international firms can offer such munificent terms for retail jobs in Norway, could they do so in our country?
- First off, not the same. Very different institutional setting (it's not like 7-Eleven in Oslo is the same thing economically speaking as a 7-Eleven in Houston, paaaarticulaly the prices of the goods): Baumol, single-industry dominance, selective metrics.
- Second, if you want to make a bid for why "Scandinavia" (or "the Nordics") are better, you shouldn't generalize from the petroleum-infused and Baumol cost disease-dominated odd one out. In terms of GDP/capita, the difference between the outlier success stories (Norway, Iceland) and general Scandinavia (Finland, Sweden) is the same as the difference between the Union's richest state (New York) and, let's say, Indiana.
(I could be nice and accomodative and include the more recently outperforming and Novo Nordisk-boosted Denmark to "general Scandinavia" if you want; doesn't change the directional outcome -- replace "Indiana" with "Nebraska")
- Third, you should learn to love (relative) poverty.
This point isn't to shit on Nebraska or Indiana (or the usual culprit Mississippi) but to reveal to Americans -- certainly the coastal elite ones in such deep love with (Northern) Europe -- that economically speaking America might be doing something right.
"You want security, health care and the American dream? Look to Scandinavia"
...also: poverty, anemic growth, gang violence, and a gradual eradication of the culture and norms that made these lands great. (But as Americans, you know a thing or two about that last one.)
Immigration adds to the challenges, particularly in Sweden, where a quarter of the population is now made up of immigrants or their children. Violent crime, often linked by commentators to immigration, is a serious problem in Sweden
Mr. Kristof does an odd switch: when comparing strictly economic metrics, he invokes Norway -- the United States equivalent of going "USA is doing great, look at these economic figures from Manhattan!" -- but when turning to other social "values" and achievements, he's happy to use the other scandis to prove a point. Plus, of course, happiness studies scams. #1307491, #1480167.
How much any of that translates into an America with COMPLETELY different values, populations, homogeneity, and expectations is far from clear.
The author does a decent job outlining some key themes:
Yet the Nordic countries are themselves facing significant challenges, including fiscal pressures, immigration, widening inequality and perhaps some breakdown in the social consensus. Some doubt whether the model can survive here, let alone be exported to countries that are larger, less homogeneous and more suspicious of taxation.
Misunderstandings Americans have about the Nordics:
- They are socialist. ("While they are often run by social democrats, they have market economies")
They're not. As pointed to above, in many respects they're more capitalist/free market than America itself. (That's not really a bragging point -- because the Scandis are very socialistic and welfare-state-y -- but a deep criticism of America itself, which has incorporated a lot of these components in a worse form, yet still pays lip service to freedom and believes its own Kool-Aid bullshit about Born Free, Capitalism raw-raw.)
- Because of generous welfare systems, all Scandis just lie around, twiddle their thumbs -- and collect benefits.
uh-uhhh. High LFP (waaaay higher than America, mind you) and lots of social trust and transparency, plus widespread cultural norms about doing what is right, working hard etc.
- Norway's success is "mostly a reflection of its oil wealth."
Yes, that's true-ish. You can't exactly run the well-controlled counterfactual experiment of a Norway without oil (unless you invoke the UK -- bad control -- or Sweden -- very different economic trajectory... don't believe your parallel trends assumption I guess the econometricians would say)
Norway's oil story is fascinating in its own right, and is astonishing precisely because well-managed natural resources that didn't completely fuck up one's country (Dutch disease, short-term squandering of windfalls) is so rare. #1515430
"Women are an underappreciated component of the Nordic economic engine"
LFP among women in Scandi lands are 62-70%, while America does 56%. Plus, heavily subsidised and largely well-run/available kindergartens -- and those Finnish schools!
It's debatable whether this is
a) a good thing for society,
b) good for babies to be separated from their parents for long hours every week,
c) good for the minds of young people to be indoctrinated/brainwashed by state-school curriculum.
Then again: all these things happen in America, too.
Large-scale, centrally governed wage withholding
Another overlooked key is the game-theoretical solution that Britain and its unions completely failed at -- and which Kristof hints at but drowns out in "redistribution" and looking out for those not doing so well.
The British story of aggressive unions is of local union bosses striking/causing mayhem -- the general thuggish-ness of unions. Bid up wages for insiders, at the expense of outsiders; combative and antagonistic relationship to industry, thus harming value creation.
The Scandi story is of centralized union negotiations, where the less-thuggish bosses are (morally and economically) responsible for the outsiders, too -- often directly, via unemployment-benefit schemes run by unions. Plus, a grand bargain that promised wage restraints in exchange for (long-term and productivity-enhancing) investments.
America doesn't have that. And American unions certainly don't have that sort of mindset or institutional pull.
"Is the Nordic model replicable?"
Could convenience stores and gas stations in America pay their cashiers and attendants $20 or more an hour plus a pension and five weeks' vacation?
Sure. And drastically reduce labor demand, shorten opening hours, and dramatically increase prices of goods. What often fascinates me about being in America is how goddamn cheap and accessible everything is.
One challenge, economists told me, is that relative to many American workers, Norwegian laborers often have higher literacy rates, appear more able to pass a drug test, can handle technology better and can be relied upon to stay in their jobs longer, meaning that employers benefit from a more experienced, more productive work force. In effect, Nordic employers can pay more in part because workers generate more income.
In that sense, learning from the Nordics is not as simple as raising minimum wages and seeing happiness soar. Rather, it’s the challenge of investing in human capital from early childhood through university-level education, pushing relentlessly to broaden opportunity at every level.
TL;DR = stop idolizing the Nordics. You won't get out of that intellectual fistfight unscathed.
Your article reminded me of that
Am I crazy?
Laaaaand of the free
I beg your pardon. We certainly know a thing or two about gang violence as well.
Ok fine
We did invent gangster rap
I forgot to expand on #3, the poverty point:
GDP/capita metrics obscures how much of your "income" disappears in taxation (obvious and hidden). Meaning the take-home wage, what you're used to having in your bank account and as walking around/spending money is waaaaay less for most people in the Nordics than most Americans.
Embrace Poverty
That's especially true if you believe the Austrian methodological point about not including government spending in GDP calculations (or even subtracting it, as some have argued for).
Are you familiar with any of the work comparing outcomes for ethnically Scandinavian Americans in America with outcomes in Scandinavia?
I remember something about how Scandinavian descendants in America look a lot like their cousins across the pond but are actually doing even better, suggesting that the political institutions aren't much better over there and that it's the cultural norms that are the source of Scandi prosperity (or perhaps the genetics but everyone's scared of talking about that).
Yes, Sanandaji uses evidence like that quite a lot in the book I mentioned.
(I haven't looked at that recently; not sure what the literature suggests these days)