Nørse Code: What the Scandinavians Got Right

The Scandinavian model of government is often held up as an example to the rest of Europe. Matt Gillow travelled to Denmark and Sweden to ask: why is it so successful?

Norse Code: the lessons Britain can learn. (Photo: Wikipedia)

Norse Code: the lessons Britain can learn. (Photo: Wikipedia)

The recent refugee crisis has thrown Scandinavian governments into disarray as they try to fathom how best to deal with the sudden influx of migrants. Sweden has been forced to eject thousands after initially opening its borders without complaint. Denmark too, has descended into controversy, apprehended by the United Nations for their dangerous new policy of confiscating refugees’ valuables in order to pay for their upkeep.

Certainly, Scandinavia is not without its shortcomings, but from an economic and infrastructural point of view, it’s arguable that the small cluster of countries are nothing short of little miracles – and the main lesson Britain can draw from them is higher taxes.

Sure, Scandinavian people pay amongst the highest tax rates in the modern world. Sweden, for example, demands a staggering 60 per cent income tax from thousands. In 2008, Scandinavian taxes equalled 48.2 per cent of their entire GDP. But most are perfectly happy to pay over half of their income in tax, and when you examine the benefits they receive, you can see why. The Organisation for Economic Cooperation & Development (OECD) says that Finland has the west’s “finest education system”. In Sweden, parents are entitled to a combined paternity leave of up to 480 days, for 390 of which they are paid 80 per cent of their usual income. In the UK, however, fathers are only entitled to two weeks. In Scandinavia, parents receive a £1,080 allowance per year, per child. A basic state pension is equal to 70 per cent of your average income throughout your career. Those unemployed and actively searching for work are paid a living wage by the government. All of that, before the real kicker to the collective gut of the UK – free higher education at the point of use.

Sweden’s humanitarian approach at the initial refugee crisis in November (Photo: Matt Gillow)

Sweden’s humanitarian approach at the initial refugee crisis in November (Photo: Matt Gillow)

It’s an ironic way to look at things, but perhaps the political point-scoring over lowering taxes over the years has been misguided in the UK. Maybe it’s a tough pill to swallow, but when you look at Denmark, consistently the happiest country in the world according to the UN World Happiness Report, and their extortionate tax rates, you wonder if our complaints about tuition fees, pensions and the NHS are unfair, given Britain’s comparatively measly tax rates – a top bracket of 45 per cent and a basic rate of 20 per cent.

But there are certainly other lessons that the UK can learn from Scandinavia, notably a commitment to a greener society. The bulk of Icelandic power is geothermal, and much of Denmark is powered by wind – as you fly into Copenhagen you see a cluster of wind turbines jutting out of the waves.

Denmark’s most popular tourist attraction: Tivoli Gardens (Photo: Katie Holdoway)

Denmark’s most popular tourist attraction: Tivoli Gardens (Photo: Katie Holdoway)

Arguably, Scandinavian public transport is among the most efficient in the world; according to the Benchmarking European Service of Public Transport, Helsinki had the best system for four years running, with Stockholm close behind in third. In 2008 and 2010, Copenhagen’s metro system was named the best in the world – and those who have visited can certainly vouch for this. In my time in Copenhagen, not a single metro train was late compared to the abysmal Great Western Railway services, which receive thousands of complaints per year. Indeed, one of the first things a Briton in Scandinavia will notice is the complete lack of a language barrier, due in part to their closeness to the UK, but also thanks to the fantastic and free education systems in place – travelling in Scandinavia as a unilingual Briton can actually be quite embarrassing, as the majority of people can speak your own language as well as you can.

Perhaps then, the UK’s complaints about the NHS and tuition fees are unfounded. Is it really fair to demand benefits from our government when we pay far lower taxes than countries like Sweden? It’s by no means a pretty argument, and the chances of any government adopting such a policy would surely prove unlikely and unpopular; but Scandinavia has the evidence – sometimes you really do get what you pay for.

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1 Response

  1. Adam Fitchett says:

    For an alternative perspective, I recommended Nima Sanandaji’s book “Scandinavian Unexceptionalism”, which is available for free free from the Institute of Economic Affairs: http://www.iea.org.uk/sites/default/files/publications/files/Sanandajinima-interactive.pdf

    In brief, Sanandaji argues that:
    (1) The Scandinavian nations do not have a significantly higher tax take or welfare state than most European nations. Higher tax rates do not necessarily bring more revenue, and it is likely that Scandinavian nations sit on the far end of the Laffer curve
    (2) The Scandinavian nations have done better during their more economically liberal periods
    (3) Economic liberty is generally high in Scandinavia anyway, and so may be offsetting any problems caused by higher taxes
    (4) Scandinavian people who move to the United States are wealthier and happier than Scandinavians who stay in their country of origin
    (5) The welfare state in Scandinavia has damaged social capital and made people feel entitled, leading to excessive spending on unemployment benefits
    (6) Rigid Scandinavian labour markets make it much harder for them to assimilate migrants which leads to social tension
    (7) Correlation should not be confused with causation. Perhaps the success came first, and then the high taxes and big welfare state came second (in fact, the data seem to suggest this)

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