Epicurus and the Nordic Model

Yet another of my Modern Philosophy posts, this one inspired by my recent travels to Sweden. I’m going to continue with this series for the time being. Hope you enjoy!

In 2016, Bernie Sanders ran a passionate and determined campaign for the Democratic nomination. He did so with very few endorsements from Democratic figures and no major financial backers. Although he was ultimately unsuccessful, he forced Clinton to address the issues he was raising, and in doing so, moved the Democrats to the left.

During his campaign, Sanders often referenced Sweden and Denmark as countries the United States could learn from. This was unsurprising given those countries’ low levels of corruption, high quality of life and low income inequality- the latter was of particular concern to Sanders. The Nordic countries (Norway, Sweden, Denmark, Finland, Iceland) were proof that reducing inequality didn’t necessarily lead to poverty or low levels of economic growth, contrary to Republican orthodoxy. Unlike the writings of Marx or Engels, these countries offered practical examples of how to create a fairer society given the reality of global capitalism.

Unfortunately, Sanders and his supporters failed to understand what the Nordic Model actually is, or why it can’t be implemented in the United States. Partly because Sanders’ proposals for tax and government spending aren’t quite the same. But also because the Nordic Model isn’t just an economic model, it’s a political culture that depends on having a certain sort of country and society.

Economics first. Sanders’ proposals certainly would’ve taken the United States in a more Nordic direction. He would raise taxes substantially on the rich and moderately on the middle class, in order to pay for the sorts of benefits the Nordic people take for granted: universal healthcare, payments to support having children, maternity and paternity leave, paid holidays, free university education, etc. But Sanders’ tax increases wouldn’t be sufficient to pay for a Nordic-style welfare state. The fact is, while taxing the rich helps to reduce inequality considerably, it doesn’t do an awful lot to raise revenue. In order to acquire the sort of funding needed for the Nordic Model, vast sums of money need to be raised from the middle class and the poor. This isn’t just in the form of a higher income tax, but higher payroll taxes and a VAT- a sophisticated federal sales tax that is implemented every time value is added to a product or service. Moreover, the Nordic countries have lower corporation taxes than the United States in order to be business friendly, so their tax system is actually quite regressive. Ultimately, were Sanders to propose that Americans pay the same tax rates as the Nordic people, he would be hopelessly unpopular, largely because that level of taxation results in a vastly increased cost of living.

But the Nordic Model’s irrelevance to America goes beyond its unfeasibly high tax rates. The Nordic countries are extremely different from the United States in almost every way. For a start, they’re much smaller; Sweden, the largest country, only has 10 million people. Implementing the Nordic Model in Vermont or New Hampshire would be far easier than in America as a whole. More importantly, the Nordic countries have very high levels of trust and the world’s lowest corruption levels. People believe that the government cares for them and represents them. America, with its history of government scandals, abuses of human rights abroad, and strong libertarian and individualistic culture, would be distinctly unsuited to a system that depends on the government to deliver services effectively. The US government is simply too inefficient and distrusted to be popular. The Nordic countries also have a culture of egalitarianism. CEO’s take far lower salaries, and pay their lowliest employees more despite the absence of a minimum wage. Unions are celebrated for advancing workers’ rights. Any ostentatious display of wealth is frowned upon. There are no Donald Trumps in the Nordics, and hardly anyone who admires him.

If the Nordic Model is not a good model for America to follow, then what is? I would suggest Germany would be a better example. Before taxes and benefits, German inequality is actually higher than the United States. The country achieves its relatively low inequality levels through a system of social insurance that follows a contributory principle- the more you pay in, the more you get out. So German payroll taxes are very high; there are all sorts of programmes from healthcare to unemployment insurance you have to pay into. But unlike in the Nordic countries, it is your money that you will receive eventually. Following the German model would allow Americans who like their private health insurer to stick with them, while moving towards a system of universal healthcare. It would address Republican concerns that the money will be taken by the government, only to be wasted away on an irrelevant project. It would be in keeping with the American culture of individualism, by making people feel as if they are contributing towards something that personally benefits them, rather than any arbitrary notion of the greater good. But the higher level of savings would also allow America to invest in infrastructure and R&D. The economy would move away from an unsustainable dependence on consumption. Furthermore, a German-style economy would likely reduce America’s trade deficit, and grow the manufacturing sector by making it easier to borrow.

Overall, Bernie Sanders is right. American levels of poverty and income inequality are far too high. The country is badly educated and poorly skilled. The infrastructure is outdated. The absence of universal healthcare and affordable higher education is a scandal. But there’s no point in chasing an unachievable goal. The Nordic countries run a lot of things very well. But they do so partly because they are small countries with a history and culture of prioritising equality above all else. And also because they are willing to put up with extremely high taxes, a high cost of living and a lower disposable income. The federal government should foster a more comprehensive and sophisticated social insurance system. But it needs to demonstrate to Americans that these programmes represent value for money for the individual, even if that individual happens to be wealthy. The Nordic focus on spending to redistribute money will go down poorly in a country historically opposed to socialism and enthralled with giving people the opportunity to become rich.

One Comment

  1. You raise very interesting points, well described. And you are quite right – the Nordic system could never be accepted in the U.S – unfortunately, because as a result of their systems they are both successful and stable, and manage to keep their environments clean and their infrastructures up to date. Nor do they have massive militaries that suck the juice out of the economy, to little purpose. I do , however, think that you could re- jig the US medical system to be less expensive and have it serve everyone, not just the rich.

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