Don't Copy Our Model, say Nordic Economists
Many in the EU, and in the US, for that matter, believe that the best economic model to follow is that of the Nordic countries. The Nordics, as the whole world realizes, combines capitalism and innovation, with generous social policy, and they get the best of both worlds. Right?
Not quite. As these Nordic economists point out, socialism has almost killed the prosperity in Scandinavia. Sweden, during the period of 1890-1950, when taxes were low, was one of the fastest growing countries in the world, when their tax burden was 10-20%. Fast forward to 1980 and socialism, and the system was decaying under the heavy burden of higher taxes (50% of gdp).
To illustrate, Denmark and Sweden were 3rd and 4th ranked, worldwide, in terms of GDP/capita in 1970. But now they're 7th and 13th. But it's only been recently, that through cutting taxes and privatizations in the 90's, that these countries have regained some of their economic vitality. Ditto for Finland and Iceland.
Countries might want to think again before they adopt the socialist Nordic model as their own.
Not quite. As these Nordic economists point out, socialism has almost killed the prosperity in Scandinavia. Sweden, during the period of 1890-1950, when taxes were low, was one of the fastest growing countries in the world, when their tax burden was 10-20%. Fast forward to 1980 and socialism, and the system was decaying under the heavy burden of higher taxes (50% of gdp).
To illustrate, Denmark and Sweden were 3rd and 4th ranked, worldwide, in terms of GDP/capita in 1970. But now they're 7th and 13th. But it's only been recently, that through cutting taxes and privatizations in the 90's, that these countries have regained some of their economic vitality. Ditto for Finland and Iceland.
Countries might want to think again before they adopt the socialist Nordic model as their own.
posted by pistolpete | 3:49 AM
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