The Truth about the Nordic Miracle


Think Finland and chances are you’ll think “ Nokia.” Think Sweden and it’s “IKEA.” Norway? Oil . Think Nordic? Five countries, advanced, prosperous, peaceful, tolerant, egalitarian, progressive and educated. From whom Ireland can possibly learn a lot. In this book, English travel and food writer Michael Booth takes an affectionate and perceptive look at all five.

The picture which emerges is more nuanced. Much to admire, certainly, but with darker corners and significant flaws. Yes there are lessons for Ireland. The main one is that we beat up on ourselves too much. The second that there is no simple Nordic template we can lift and apply here. Each of the Nordics comes with its own baggage and we can learn best by studying these less than nearly perfect societies.

With the exception of Norway, with its oil, the other Nordics in recent years have all experienced severe economic downturns, similar to Ireland’s. We are all familiar with the banking collapse in Iceland, where the three main banks borrowed ten times the country’s GDP before total collapse. We are less familiar with the Finnish economic collapse of the early 1990s, when a property bubble burst, GDP declined by 13% and unemployment rose from 3% to 18%. This in Finland, a country often held up as an example for Ireland to follow.

Sweden had a major banking crisis and recession in the early 90s also , after ITS building bubble burst, though it has successfully, and painfully, restructured since. Denmark’s household debt, at 310%, is the world’s highest, well above Ireland’s, following the 2008 collapse of a property boom fuelled by cheap credit and the introduction of interest only mortgages in 2003 ( sound familiar?). Indebtedness and negative equity are rampant, particularly among those aged thirty to forty, a generation the author describes as “screwed.”

Finland has recovered, and today is one of the EU’s most prosperous states, boasts very significant gender equality and has a superb free state education system, a world leader. Finland has Nokia, a native manufacturing industry and more electronics besides, though critics fear the country is over reliant on this sector (again, sound familiar?). Finland has the fewest immigrants, but also has the highest murder rate in Western Europe, consumes anti-depressants and anti-psychotic drugs in large quantities, and has a major problem with binge drinking.

Denmark has a comprehensive welfare state but also punitive tax rates. These exist in tandem with a massive black economy, which is tolerated semi – officially as part of an unvirtuous circle under which the private sector is sustained by the black economy, enabling it to fund, in taxes, the cost of the public sector and welfare benefits. Denmark tops the world cancer rates and has a significant carbon footprint, wind energy notwithstanding. Denmark’s third largest party, with 12% of votes and seats, espouses an anti –immigration platform.

Sweden, the Jewel in the Crown of the Nordics, has the largest economy and population, is front runner in gender and class equality, and is renowned for a comprehensive cradle to grave welfare state. Sweden boasts native multinational giants like IKEA, H&M, Tetra Pak, Eriksson and Volvo. It is, moreover, at the cutting edge of a huge multicultural experiment – 15% of the population was born elsewhere and with their children comprise almost one third of the population ( though, curiously, relatively few migrated from the new EU states after 2004).

Sweden was never conquered and has long pursued a policy of neutrality. It actually prospered during World War Two, supplying vital strategic materials to Germany until quite late in the war. The Swedish economy and society developed steadily during the Twentieth Century, thanks largely to a unique social partnership between big business, the Social Democrats and the unions. Yet in this Stepford Wife of a country, youth unemployment is pushing 30%, despite its neutrality Sweden is the world’s eighth largest arms exporter and it also faces rising anti-immigration sentiment.

Norway has oil in abundance, and continues to discover more. The Dubai of the North, it pumps it out at pace, belying its clean, green image. The revenues have been invested wisely, but cracks are starting to show, with Norway having proportionately the highest number of welfare claimants in Europe and a worsening trend in educational standards. Norway also has a worrying strain of right wing extremism, epitomised not only by Anders Breivik, but also by the rising support for the anti-immigrant Progress Party (16% in last year’s election). Not surprisingly the integration of non-Western immigrants has become the current major challenge facing the Nordic democracies.

Despite these and other “fissures and flaws” Booth (a Denmark resident) is an unashamed admirer of the Nordics. He points up the countries’ shared positive aspects, the trust and social cohesion, the economic and gender equality, the well balanced political and economic systems, the enduring high levels of social mobility. For him the alternative to the rampant capitalism which has ravaged the West in recent years, is not Brazil, Russia, or China. “ The Nordic countries have the answer Even when they get it wrong, they soon figure out how to get it right without any blood being spilled.” Another lesson here.

A satisfying and informative book.

March 3 2014


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