Jasper Smith

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Archive for the ‘Nordic’ Category

Helsinki as Hell

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McMegan ponders the sustainability of the Scandinavian welfare state:

It occurs to me that Scandinavia, with its homogeneous population, may have been spending down the accumulated social capital of its pre-welfare state society. Before the widespread welfare state, people who attempted to free ride by collecting benefit when they could be working faced both internal guilt and considerable external social pressure; the neighbors essentially functioned as the fraud police. But as the generations who grew up before the kribbe-to-grav safety net die off, and are replaced by a newer generation perfectly comfortable with broad public charity, this is clearly breaking down. Sweden’s rates of long term disability, sick leave, and so forth, are very high. The Scandinavians I know generally report that the once-famous work ethic is not really all that impressive any more, and there’s little stigma attached to malingering on long-term sick leave.

Yes, but is the Nordic system really “breaking down” just because people take advantage of its opportunities for leisure?

I was under the impression that these countries were really beginning to suffer from dismal growth and its attendant problems (worsening public sector finances, declining living standards, joblessness, etc.) in the 80s and early 90s. But I also thought that, over the last ten years or so, they had pretty much gotten their acts together, tweaked the incentives their systems create, and undertaken some non-trivial structural reforms — and that as a result they were all once again growing at a pretty decent clip. Am I wrong?

Relatedly, what I’ve often wondered is, wouldn’t the average Scandinavian who was gainfully employed enjoy a substantially higher standard of living than what who stayed home to live life on the dole? In other words, I would imagine you could structure a generous and expensive array of social programs and still have a society where nonetheless rational actors possess a strong incentive to achieve successful careers.

I think libertarian efforts to portray the Nordic countries as grim dystopian hells (not saying that’s what Megan’s doing here, by the bye) are comically handhanded. It’s plain to see these countries simply rock.

Written by Jasper

June 2, 2008 at 5:48 pm

Posted in Economics, Nordic, Sweden