Pays nordiques: La chance d’avoir été les premiers à avoir atteint le futur (Something rotten in the state of Denmark no more: how reaching the limits of big government first can turn out to be a chance)

A Norwegian court has sentenced a woman to nine months in jail for raping a man, the first such conviction in the Scandinavian country that prides itself for its egalitarianism. The 31-year-old man fell asleep on a sofa at a party in January last year and told the court in the western city of Bergen he woke to find the 23-year-old woman was having oral sex with him. Under Norwegian law, all sexual acts with someone who is « unconscious or for other reasons unable to oppose the act » are considered rape. The court sentenced the woman on Wednesday to nine months in jail and ordered her to pay 40,000 Norwegian crowns (US$6,355) in compensation. (…) NOTE: Under Jamaican law, rape is defined under the Offences Against the Persons Act, as penile penetration without consent. The Jamaican Gleaner (2005)
The welfare state we have is excellent in most ways. We only have this little problem. We can’t afford it. Gunnar Viby Mogensen (Danish historian)
The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality. Development theorists have taken to calling successful modernisation “getting to Denmark”. (…) some of this is down to lucky timing: the Nordics cleverly managed to have their debt crisis in the 1990s. But the second reason why the Nordic model is in vogue is more interesting. To politicians around the world—especially in the debt-ridden West—they offer a blueprint of how to reform the public sector, making the state far more efficient and responsive. (…) The idea of lean Nordic government will come as a shock both to French leftists who dream of socialist Scandinavia and to American conservatives who fear that Barack Obama is bent on “Swedenisation”. They are out of date. In the 1970s and 1980s the Nordics were indeed tax-and-spend countries. Sweden’s public spending reached 67% of GDP in 1993. (…) Since then the Nordics have changed course—mainly to the right. Government’s share of GDP in Sweden, which has dropped by around 18 percentage points, is lower than France’s and could soon be lower than Britain’s. Taxes have been cut: the corporate rate is 22%, far lower than America’s. The Nordics have focused on balancing the books. While Mr Obama and Congress dither over entitlement reform, Sweden has reformed its pension system. Its budget deficit is 0.3% of GDP; America’s is 7%. On public services the Nordics have been similarly pragmatic. So long as public services work, they do not mind who provides them. Denmark and Norway allow private firms to run public hospitals. Sweden has a universal system of school vouchers, with private for-profit schools competing with public schools. Denmark also has vouchers—but ones that you can top up.
Yet it is hard to see the Nordic model of government spreading quickly, mainly because the Nordic talent for government is sui generis. Nordic government arose from a combination of difficult geography and benign history. All the Nordic countries have small populations, which means that members of the ruling elites have to get on with each other. Their monarchs lived in relatively modest places and their barons had to strike bargains with independent-minded peasants and seafarers. They embraced liberalism early. Sweden guaranteed freedom of the press in 1766, and from the 1840s onwards it abolished preference for aristocrats in handing out top government jobs and created a meritocratic and corruption-free civil service. They also embraced Protestantism—a religion that reduces the church to a helpmate and emphasises the direct relationship between the individual and his God. One of the Lutheran church’s main priorities was teaching peasants to read.  (…) There are compelling reasons for paying attention to these small countries on the edge of Europe. The first is that they have reached the future first. They are grappling with problems that other countries too will have to deal with in due course, such as what to do when you reach the limits of big government and how to organise society when almost all women work. And the Nordics are coming up with highly innovative solutions that reject the tired orthodoxies of left and right. The second reason to pay attention is that the new Nordic model is proving strikingly successful. The Nordics dominate indices of competitiveness as well as of well-being. Their high scores in both types of league table mark a big change since the 1980s when welfare took precedence over competitiveness.
(But) Mass immigration is posing serious problems for the region. For the Nordic countries to be able to afford their welfare states they need to have 80% of their adults in the workforce, but labour-force participation among non-European immigrants is much lower than that. In Sweden only 51% of non-Europeans have a job, compared with over 84% of native Swedes. The Nordic countries need to persuade their citizens that they are getting a good return on their taxes, but mass immigration is creating a class of people who are permanently dependent on the state. (…)  In Sweden 26% of all prisoners, and 50% of prisoners serving more than five years, are foreigners. Some 46% of the jobless are non-Europeans, and 40% of non-Europeans are classified as poor, compared with only 10% of native Swedes.  High immigration is threatening the principle of redistribution that is at the heart of the welfare state. Income inequalities in the Nordic countries are generally lower than elsewhere, but Matz Dahlberg, of Uppsala University, reckons that immigration is making people less willing to support redistribution. The decline is particularly marked among high-income earners. Immigration is also causing culture clashes. Nordics fervently believe in liberal values, especially sexual equality and freedom of speech, but many of the immigrants come from countries where men and women are segregated and criticising the prophet Muhammad is a serious offence. Peaceful Denmark found itself on the front-line of the culture wars when Jyllands-Posten, a newspaper, published cartoons making fun of Muhammad. Immigration has divided the Nordics. (…) The biggest battle is within the Nordic mind. Is it more progressive to open the door to refugees and risk overextending the welfare state, or to close the door and leave them to languish in danger zones? Is it more enlightened to impose secular values on devout Muslims or to dilute liberal values in the name of multiculturalism? Trying to reconcile these contradictions can lead to strange results. Alarmed by reports of female genital mutilation, Nyamko Sabuni, a Swedish cabinet minister, suggested compulsory gynaecological examinations for all young girls in Sweden. Liberals are increasingly on the defensive. The number of immigration-related attacks is rising. In 2010 Taimour Abdulwahab al-Abdaly blew himself up in the middle of a crowd of Christmas shoppers in central Stockholm; remarkably, he managed to injure only a couple of people. In Sweden median household incomes of non-European immigrants are now 36% lower than for native-born Swedes, whereas in 1991 they were only 21% lower. But Denmark’s much-vilified immigration reforms may be paying off: the employment gap between native Danes and non-Western immigrants has declined to 24 percentage points, compared with 42 in the mid-1990s. The Economist

Bienvenue aux pays où, entre Skype et Zlatan, on peut pousser l’égalité jusqu’à condamner une femme à neuf mois de prison pour une fellation non consentie !

A l’heure où, des deux côtés de l’Atlantique, nos belles âmes n’ont que les mots d’impôts et de taxes à la bouche …

Remise des pendules à l’heure avec ce dossier de The Economist sur les secrets de fabrication des sociétés probablement les plus avancées de la planète, à savoir les pays nordiques …

Dont la chance, on l’oublie souvent, est d’avoir été les premiers à atteindre il y a plus de 20 ans les limites de la passion socialiste pour le boulimisme étatique …

Et, deuxième chose qu’on oublie tout aussi souvent, d’avoir pris le taureau par les cornes pour être aujourd’hui parmi les sociétés les plus dynamiques et efficaces …

Reste plus maintenant, avec un afflux d’étrangers et de réfugiés largement inassimilables (tout le monde n’a pas hélas les talents footballistiques d’un Zlatan Ibrahimovic!), qu’à payer les notes de leur générosité passée …

The Nordic countries

The next supermodel

Politicians from both right and left could learn from the Nordic countries

The Economist

Feb 2nd 2013

SMALLISH countries are often in the vanguard when it comes to reforming government. In the 1980s Britain was out in the lead, thanks to Thatcherism and privatisation. Tiny Singapore has long been a role model for many reformers. Now the Nordic countries are likely to assume a similar role.

That is partly because the four main Nordics—Sweden, Denmark, Norway and Finland—are doing rather well. If you had to be reborn anywhere in the world as a person with average talents and income, you would want to be a Viking. The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality. Development theorists have taken to calling successful modernisation “getting to Denmark”. Meanwhile a region that was once synonymous with do-it-yourself furniture and Abba has even become a cultural haven, home to “The Killing”, Noma and “Angry Birds”.

As our special report this week explains, some of this is down to lucky timing: the Nordics cleverly managed to have their debt crisis in the 1990s. But the second reason why the Nordic model is in vogue is more interesting. To politicians around the world—especially in the debt-ridden West—they offer a blueprint of how to reform the public sector, making the state far more efficient and responsive.

From Pippi Longstocking to private schools

The idea of lean Nordic government will come as a shock both to French leftists who dream of socialist Scandinavia and to American conservatives who fear that Barack Obama is bent on “Swedenisation”. They are out of date. In the 1970s and 1980s the Nordics were indeed tax-and-spend countries. Sweden’s public spending reached 67% of GDP in 1993. Astrid Lindgren, the inventor of Pippi Longstocking, was forced to pay more than 100% of her income in taxes. But tax-and-spend did not work: Sweden fell from being the fourth-richest country in the world in 1970 to the 14th in 1993.

Since then the Nordics have changed course—mainly to the right. Government’s share of GDP in Sweden, which has dropped by around 18 percentage points, is lower than France’s and could soon be lower than Britain’s. Taxes have been cut: the corporate rate is 22%, far lower than America’s. The Nordics have focused on balancing the books. While Mr Obama and Congress dither over entitlement reform, Sweden has reformed its pension system (see Free exchange). Its budget deficit is 0.3% of GDP; America’s is 7%.

On public services the Nordics have been similarly pragmatic. So long as public services work, they do not mind who provides them. Denmark and Norway allow private firms to run public hospitals. Sweden has a universal system of school vouchers, with private for-profit schools competing with public schools. Denmark also has vouchers—but ones that you can top up. When it comes to choice, Milton Friedman would be more at home in Stockholm than in Washington, DC.

All Western politicians claim to promote transparency and technology. The Nordics can do so with more justification than most. The performance of all schools and hospitals is measured. Governments are forced to operate in the harsh light of day: Sweden gives everyone access to official records. Politicians are vilified if they get off their bicycles and into official limousines. The home of Skype and Spotify is also a leader in e-government: you can pay your taxes with an SMS message.

This may sound like enhanced Thatcherism, but the Nordics also offer something for the progressive left by proving that it is possible to combine competitive capitalism with a large state: they employ 30% of their workforce in the public sector, compared with an OECD average of 15%. They are stout free-traders who resist the temptation to intervene even to protect iconic companies: Sweden let Saab go bankrupt and Volvo is now owned by China’s Geely. But they also focus on the long term—most obviously through Norway’s $600 billion sovereign-wealth fund—and they look for ways to temper capitalism’s harsher effects. Denmark, for instance, has a system of “flexicurity” that makes it easier for employers to sack people but provides support and training for the unemployed, and Finland organises venture-capital networks.

The sour part of the smorgasbord

The new Nordic model is not perfect. Public spending as a proportion of GDP in these countries is still higher than this newspaper would like, or indeed than will be sustainable. Their levels of taxation still encourage entrepreneurs to move abroad: London is full of clever young Swedes. Too many people—especially immigrants—live off benefits. The pressures that have forced their governments to cut spending, such as growing global competition, will force more change. The Nordics are bloated compared with Singapore, and they have not focused enough on means-testing benefits.

All the same, ever more countries should look to the Nordics. Western countries will hit the limits of big government, as Sweden did. When Angela Merkel worries that the European Union has 7% of the world’s population but half of its social spending, the Nordics are part of the answer. They also show that EU countries can be genuine economic successes. And as the Asians introduce welfare states they too will look to the Nordics: Norway is a particular focus of the Chinese.

The main lesson to learn from the Nordics is not ideological but practical. The state is popular not because it is big but because it works. A Swede pays tax more willingly than a Californian because he gets decent schools and free health care. The Nordics have pushed far-reaching reforms past unions and business lobbies. The proof is there. You can inject market mechanisms into the welfare state to sharpen its performance. You can put entitlement programmes on sound foundations to avoid beggaring future generations. But you need to be willing to root out corruption and vested interests. And you must be ready to abandon tired orthodoxies of the left and right and forage for good ideas across the political spectrum. The world will be studying the Nordic model for years to come.

Voir aussi:

Special report: The Nordic countries

Northern lights

The Nordic countries are reinventing their model of capitalism, says Adrian Wooldridge

The Economist

Feb 2nd 2013

THIRTY YEARS AGO Margaret Thatcher turned Britain into the world’s leading centre of “thinking the unthinkable”. Today that distinction has passed to Sweden. The streets of Stockholm are awash with the blood of sacred cows. The think-tanks are brimful of new ideas. The erstwhile champion of the “third way” is now pursuing a far more interesting brand of politics.

Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.

Special report

Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.

Most daringly, it has introduced a universal system of school vouchers and invited private schools to compete with public ones. Private companies also vie with each other to provide state-funded health services and care for the elderly. Anders Aslund, a Swedish economist who lives in America, hopes that Sweden is pioneering “a new conservative model”; Brian Palmer, an American anthropologist who lives in Sweden, worries that it is turning into “the United States of Swedeamerica”.

There can be no doubt that Sweden’s quiet revolution has brought about a dramatic change in its economic performance. The two decades from 1970 were a period of decline: the country was demoted from being the world’s fourth-richest in 1970 to 14th-richest in 1993, when the average Swede was poorer than the average Briton or Italian. The two decades from 1990 were a period of recovery: GDP growth between 1993 and 2010 averaged 2.7% a year and productivity 2.1% a year, compared with 1.9% and 1% respectively for the main 15 EU countries.

For most of the 20th century Sweden prided itself on offering what Marquis Childs called, in his 1936 book of that title, a “Middle Way” between capitalism and socialism. Global companies such as Volvo and Ericsson generated wealth while enlightened bureaucrats built the Folkhemmet or “People’s Home”. As the decades rolled by, the middle way veered left. The government kept growing: public spending as a share of GDP nearly doubled from 1960 to 1980 and peaked at 67% in 1993. Taxes kept rising. The Social Democrats (who ruled Sweden for 44 uninterrupted years from 1932 to 1976 and for 21 out of the 24 years from 1982 to 2006) kept squeezing business. “The era of neo-capitalism is drawing to an end,” said Olof Palme, the party’s leader, in 1974. “It is some kind of socialism that is the key to the future.”

The other Nordic countries have been moving in the same direction, if more slowly. Denmark has one of the most liberal labour markets in Europe. It also allows parents to send children to private schools at public expense and make up the difference in cost with their own money. Finland is harnessing the skills of venture capitalists and angel investors to promote innovation and entrepreneurship. Oil-rich Norway is a partial exception to this pattern, but even there the government is preparing for its post-oil future.

This is not to say that the Nordics are shredding their old model. They continue to pride themselves on the generosity of their welfare states. About 30% of their labour force works in the public sector, twice the average in the Organisation for Economic Development and Co-operation, a rich-country think-tank. They continue to believe in combining open economies with public investment in human capital. But the new Nordic model begins with the individual rather than the state. It begins with fiscal responsibility rather than pump-priming: all four Nordic countries have AAA ratings and debt loads significantly below the euro-zone average. It begins with choice and competition rather than paternalism and planning. The economic-freedom index of the Fraser Institute, a Canadian think-tank, shows Sweden and Finland catching up with the United States (see chart). The leftward lurch has been reversed: rather than extending the state into the market, the Nordics are extending the market into the state.

Why are the Nordic countries doing this? The obvious answer is that they have reached the limits of big government. “The welfare state we have is excellent in most ways,” says Gunnar Viby Mogensen, a Danish historian. “We only have this little problem. We can’t afford it.” The economic storms that shook all the Nordic countries in the early 1990s provided a foretaste of what would happen if they failed to get their affairs in order.

There are two less obvious reasons. The old Nordic model depended on the ability of a cadre of big companies to generate enough money to support the state, but these companies are being slimmed by global competition. The old model also depended on people’s willingness to accept direction from above, but Nordic populations are becoming more demanding.

Small is powerful

The Nordic countries have a collective population of only 26m. Finland is the only one of them that is a member of both the European Union and the euro area. Sweden is in the EU but outside the euro and has a freely floating currency. Denmark, too, is in the EU and outside the euro area but pegs its currency to the euro. Norway has remained outside the EU.

But there are compelling reasons for paying attention to these small countries on the edge of Europe. The first is that they have reached the future first. They are grappling with problems that other countries too will have to deal with in due course, such as what to do when you reach the limits of big government and how to organise society when almost all women work. And the Nordics are coming up with highly innovative solutions that reject the tired orthodoxies of left and right.

The second reason to pay attention is that the new Nordic model is proving strikingly successful. The Nordics dominate indices of competitiveness as well as of well-being. Their high scores in both types of league table mark a big change since the 1980s when welfare took precedence over competitiveness.

Explore our interactive guide to Europe’s troubled economies

The Nordics do particularly well in two areas where competitiveness and welfare can reinforce each other most powerfully: innovation and social inclusion. BCG, as the Boston Consulting Group calls itself, gives all of them high scores on its e-intensity index, which measures the internet’s impact on business and society. Booz & Company, another consultancy, points out that big companies often test-market new products on Nordic consumers because of their willingness to try new things. The Nordic countries led the world in introducing the mobile network in the 1980s and the GSM standard in the 1990s. Today they are ahead in the transition to both e-government and the cashless economy. Locals boast that they pay their taxes by SMS. This correspondent gave up changing sterling into local currencies because everything from taxi rides to cups of coffee can be paid for by card.

The Nordics also have a strong record of drawing on the talents of their entire populations, with the possible exception of their immigrants. They have the world’s highest rates of social mobility: in a comparison of social mobility in eight advanced countries by Jo Blanden, Paul Gregg and Stephen Machin, of the London School of Economics, they occupied the first four places. America and Britain came last. The Nordics also have exceptionally high rates of female labour-force participation: in Denmark not far off as many women go out to work (72%) as men (79%).

Flies in the ointment

This special report will examine the way the Nordic governments are updating their version of capitalism to deal with a more difficult world. It will note that in doing so they have unleashed a huge amount of creativity and become world leaders in reform. Nordic entrepreneurs are feeling their oats in a way not seen since the early 20th century. Nordic writers and artists—and indeed Nordic chefs and game designers—are enjoying a creative renaissance.

The report will also add caveats. The growing diversity of Nordic societies is generating social tensions, most horrifically in Norway, where Anders Breivik killed 77 people in a racially motivated attack in 2011, but also on a more mundane level every day. Sweden is finding it particularly hard to integrate its large population of refugees.

The Nordic model is still a work in progress. The three forces that have obliged the Nordic countries to revamp it—limited resources, rampant globalisation and growing diversity—are gathering momentum. The Nordics will have to continue to upgrade their model, but they will also have to fight to retain what makes it distinctive. Lant Pritchett and Michael Woolcock, of the World Bank, have coined the term “getting to Denmark” to describe successful modernisation. This report will suggest that the trick is not just to get to Denmark; it is to stay there.

The final caveat is about learning from the Nordic example, which other countries are rightly trying to do. Britain, for example, is introducing Swedish-style “free schools”. But transferring such lessons is fraught with problems. The Nordics’ success depends on their long tradition of good government, which emphasises not only honesty and transparency but also consensus and compromise. Learning from Denmark may be as difficult as staying there.

Voir également:

Norway

The rich cousin

Oil makes Norway different from the rest of the region, but only up to a point

The Economist

Feb 2nd 2013

NORWAY IS THE odd man out in the Nordics. While its neighbours are flirting with free markets, Norway is embracing state capitalism. Its national oil champion, Statoil, is the largest company in the region. The Norwegian state owns large stakes in Telenor, the country’s biggest telephone operator, Norsk Hydro, its biggest aluminium producer, Yara, its biggest fertiliser- maker, and DnBNor, its biggest bank. It holds 37% of the Oslo stockmarket, but it also controls some non-listed giants such as Statkraft, a power-generator, which if listed would be the third-biggest company on the stockmarket.

The simple explanation for Norway’s penchant for state capitalism is oil. When it was discovered in the North Sea in late 1969 it transformed the country’s economy. Today Norway is the world’s eighth-largest oil exporter. Petroleum accounts for 30% of the government’s revenues as well as a quarter of the country’s value added.

There is also a more nuanced explanation. Norwegians have always looked to the state to help manage their abundant natural resources—minerals, fjords, forests, waterfalls—and to look after isolated and thinly spread communities. Norway has a population density of only 13 people per square kilometre. Norway also came up with the idea of the state owning shares in private companies: after the second world war the government nationalised all German business interests in Norway and ended up owning 44% of Norsk Hydro’s shares. The formula of controlling business through shares rather than regulation seemed to work well, so the government used it wherever possible. “We invented the Chinese way of doing things before the Chinese,” says Torger Reve of the Norwegian Business School.

In recent years the Norwegians have been adjusting their model to get the best combination of state control and global competition. In 2007 they merged two state companies, Statoil and Hydro, in order to create a national champion. They also reduced the state’s share to 62.5%. For some this shows that Norway is liberalising. But the strategy is remarkably similar to that being adopted in China and other state-capitalist countries.

Norway’s state capitalism has resulted in several oddities. The country has become a significant oil producer, though it is not a member of the OPEC club. But unusually among oil-producing nations, it is also a big advocate of human rights—and a powerful one, thanks to its control of the Nobel peace prize. Norway has been able to cling onto more of its old social democratic habits than its neighbours. The oil boom led to a boom in public spending: since the 1970s the number of people employed in education has doubled and that in health and social services has quadrupled. The public sector continues to account for 52% of Norway’s GDP.

Oil wealth is bringing its own problems. The oil sector is monopolising the nation’s technical talent, with more than 50,000 engineers currently being employed offshore. Property prices are rising by nearly 7% a year. McDonalds charges $7.69 for a Big Mac, against $4.37 in America.

Oiling the wheels of welfare

Fellow Nordics like to dismiss Norway as the world’s most northerly Arab country, but the most striking thing about Norway is how quintessentially Nordic it is. Oil may have filled its coffers and reconfigured its political economy, but it has not changed its culture. Oslo is singularly free from the soaring skyscrapers and bling-filled shopping malls that sprout in other oil capitals. The new opera house is magnificent, but it tries its best to look modest. The Munch Museum, celebrating the country’s most famous painter, is housed in a concrete mausoleum.

The Norwegians are well aware of oil’s terrible ability to turn riches into rags and sages into fools. Back in 1990 they established a sovereign-wealth fund (formally known as the Government Pension Fund Global) to prepare the country for a post-oil future and to prevent deindustrialisation. They also used the oil industry to promote other local industries such as shipping.

The fund is not without its problems, such as its size (it now accounts for 1% of all the world’s stocks), its leisurely approach (it was slow to exploit the opportunities offered by the 2007-08 financial crisis) and its penchant for blacklisting offending companies. But it is nevertheless one of the best-run in the world. The Norwegians have established a clear division between the finance ministry as owner and the central bank as manager. They are now trying to improve returns and diversify risks.

The oil wealth has not destroyed Norway’s egalitarian spirit. Finn Jebsen, chairman of the Kongsberg Group, which has large defence interests, points out that his country has some of the world’s best-paid manual workers and some of the worst-paid CEOs: blue-collar workers earn three times as much as their British peers, whereas the boss of Statoil earns just a couple of million dollars a year. Many of Norway’s richer citizens live in London to escape from high taxes and a somewhat claustrophobic society.

Still, Norway is changing fast: new wealth is pulling in newcomers from all over the world and shaking natives out of some of their old habits. In Oslo you now see nouveaux riches flashing their wealth, drug addicts and dropouts begging for money, an army of Swedish barmen and waitresses and men with prayer beads driving taxis. Some 11% of Norway’s residents were born elsewhere.

Like its neighbours, Norway wants to occupy upmarket niches and sell its expertise to the rest of the world. Its government created Statoil out of nothing by compelling private oil companies to hand over some of their expertise in return for their contracts and by building on the country’s established skills in shipping. It badgered the company to innovate by taxing profits heavily but providing generous tax relief on R&D spending.

Norway is now the world’s deep-sea drilling capital. Statoil is a leading global company in its own right as well as being at the centre of an elaborate network that includes Norwegian companies such as Aker Solutions and Kongsberg Maritime and the deep-sea divisions of foreign oil companies such as Schlumberger. Norwegian companies have learned how to drill horizontally as well as vertically. They have also cut the cost of exploratory drilling by developing technologies for mobile rigs that allows them to be kept steady in rough weather. The demand for this expertise is booming.

Norway applies the same strategy to traditional industries such as fishing, logging and mining. Its fjords are home to the world’s most advanced fish-farming industry. Its pulp and paper companies are moving into biorefining. Its tradition of exploiting natural resources (“we live off what we find in nature” is a common refrain) is giving rise to new occupations such as bioforaging. Norwegian aquaculturists are selling their expertise to other countries that specialise in fish farming, such as Chile.

Norway has also caught the region’s enthusiasm for entrepreneurship. The government is promoting new businesses through bodies such as Innovation Norway and university science parks. Venture-capital firms such as Northzone, too, are on the lookout for clever ideas. The Norwegian Institute for Air Research has come up with a device that can measure the levels of volcanic ash in the air. Clean Marine has invented a way of cleaning ships’ exhaust. Norway also has a flourishing culture industry: Karl Ove Knausgard, the author of “My Struggle” (in six volumes), is a huge literary talent.

The country’s principled response to the actions of Anders Breivik, who committed mass murder in the name of white supremacy, was deeply impressive

Norway is also a strong exponent of Nordic social values, supporting negotiated solutions abroad and humanitarian policies at home. Of late it has not been a wise guardian of its biggest source of soft power. Giving Barack Obama the Nobel peace prize before he had a chance to do anything, or to the European Union in the midst of a euro crisis, might have been fine individually, but doing both in rapid succession was bad management.

Still, the country’s principled response to the atrocities perpetrated by Anders Breivik was deeply impressive. Mr Breivik blew up eight government buildings in Oslo, killing eight people, and then shot dead 69 more, most of them teenagers, on the nearby island of Utoya. He committed mass murder in the name of white supremacy. Yet the country’s reaction was a model of restraint. The court gave him an impeccably fair trial and sentenced him to 21 years in prison. He now spends his time writing letters complaining about life in his “mini Abu Ghraib” and working on a book to explain his actions.

Voir encore:

Special report: The Nordic countries

Immigrants

The ins and the outs

Immigration and growing inequality are making the Nordics less homogeneous

Feb 2nd 2013

Out in the cold

IN 1965 SWEDEN’S Social Democratic Party embarked on the Million Programme, an ambitious plan to build a million new homes in a country of only 7.7m people. These homes had everything that good democratic citizens could want—all mod cons, easy access to public services and green spaces.

The government exceeded its target by 6,000, but in other respects the Million Programme went awry. Swedish workers quickly showed what they thought of the new homes—many of them high-rise blocks of flats on the edge of cities—by skedaddling at the first opportunity. In the 1980s the Million homes were filled by guest workers from the Balkans and Greece. Today, as the guest workers skedaddle in turn, they are being filled by refugees from the world’s trouble spots.

Rosengard was once one of the programme’s proudest achievements: a high-rise development that was close to the centre of Malmö, one of Sweden’s industrial powerhouses, but surrounded by open space. Today over 80% of its population of 24,000 are immigrants. The local shops have names such as Babylon and Lebanon. Women in hijabs and headscarves cart their shopping through the freezing rain. Men sit in cafés drinking strong coffee and keeping dry. A truck sells falafel sandwiches.

The Swedish state does its best to reach out to these immigrants. The city of Malmö’s crest is everywhere. The local library has a language café and a chess room. A sports complex includes a swimming pool and a boxing ring. People in red jackets marked “Rosengard hosts”—most of them immigrants themselves—help residents negotiate the complexities of the welfare state.

Yet the relationship between the state and its clients is strained. “In Sweden having a job is everything,” says Tobias Billstrom, the minister for immigration and a former MP for Malmö; but in Rosengard only 38% of the residents have one. Angry youths have taken to rioting, torching bicycle sheds and recycling centres as well as cars.

Per Brinkemo is a former journalist whose life was changed when he wrote a book about a Somali boy who was brought up in war-torn Mogadishu. He now runs an organisation that specialises in helping Somali refugees from the basement of a Rosengard block of flats. The centre’s walls are decorated with pictures of high-ranking visitors and prizes awarded to Mr Brinkemo. But he is no fan of government policies, pointing out that politicians have little sense of how difficult it is to integrate Somalis into Swedish society. They hail from nomadic societies where trust is reserved for the clan, literacy is rare and timekeeping is rudimentary. Three-quarters of Somali children drop out of school. “For Somali immigrants [coming to Sweden] is like being transported to Mars,” he says.

The sums that don’t add up

Mass immigration is posing serious problems for the region. For the Nordic countries to be able to afford their welfare states they need to have 80% of their adults in the workforce, but labour-force participation among non-European immigrants is much lower than that. In Sweden only 51% of non-Europeans have a job, compared with over 84% of native Swedes. The Nordic countries need to persuade their citizens that they are getting a good return on their taxes, but mass immigration is creating a class of people who are permanently dependent on the state.

Torben Tranaes, of Denmark’s Rockwool Foundation Research Unit, calculates that in the mid-1990s immigrants in their 40s—the age group that generally contributes most to the public budget—paid only marginally more in taxes than they received in benefits. In Sweden 26% of all prisoners, and 50% of prisoners serving more than five years, are foreigners. Some 46% of the jobless are non-Europeans, and 40% of non-Europeans are classified as poor, compared with only 10% of native Swedes. Immigrants are so closely associated with the Million Programme, and hence with public housing, that the Gringo, a Stockholm newspaper for immigrants, calls them Miljonsvenskar, or “Million Swedes”.

High immigration is threatening the principle of redistribution that is at the heart of the welfare state. Income inequalities in the Nordic countries are generally lower than elsewhere (see chart), but Matz Dahlberg, of Uppsala University, reckons that immigration is making people less willing to support redistribution. The decline is particularly marked among high-income earners. Immigration is also causing culture clashes. Nordics fervently believe in liberal values, especially sexual equality and freedom of speech, but many of the immigrants come from countries where men and women are segregated and criticising the prophet Muhammad is a serious offence. Peaceful Denmark found itself on the front-line of the culture wars when Jyllands-Posten, a newspaper, published cartoons making fun of Muhammad.

Immigration has divided the Nordics. The Swedes regard their open-armed approach to asylum-seekers as an expression of what is best in their culture. The Danes revisited their immigration policies in 1999, spurred by the rise of the anti-immigrant Danish People’s Party. They tightened the rules for family reunification, made it more difficult for newcomers to claim benefits and set up an integration ministry. Today Denmark receives more non-European immigrants than ever, but it has radically reduced the number of refugees while increasing the number of people on student and work visas.

The biggest battle is within the Nordic mind. Is it more progressive to open the door to refugees and risk overextending the welfare state, or to close the door and leave them to languish in danger zones? Is it more enlightened to impose secular values on devout Muslims or to dilute liberal values in the name of multiculturalism? Trying to reconcile these contradictions can lead to strange results. Alarmed by reports of female genital mutilation, Nyamko Sabuni, a Swedish cabinet minister, suggested compulsory gynaecological examinations for all young girls in Sweden.

Liberals are increasingly on the defensive. The number of immigration-related attacks is rising. In 2010 Taimour Abdulwahab al-Abdaly blew himself up in the middle of a crowd of Christmas shoppers in central Stockholm; remarkably, he managed to injure only a couple of people. In Sweden median household incomes of non-European immigrants are now 36% lower than for native-born Swedes, whereas in 1991 they were only 21% lower. But Denmark’s much-vilified immigration reforms may be paying off: the employment gap between native Danes and non-Western immigrants has declined to 24 percentage points, compared with 42 in the mid-1990s.

Sweden is now allowing in more skilled workers, having previously combined highly restrictive policies for this group with the world’s most generous policies for refugees. Trade unions used to have a veto over who was admitted and repeatedly used it. This may calm the immigration debate, but it may equally well increase the pressure to open the doors even wider for skilled immigrants while closing them for refugees.

A 20-minute drive from Rosengard to the western harbour takes the visitor to the Turning Torso, a high-rise, high-spec block that twists like a lithe athlete and commands spectacular views over the Oresund bridge linking Malmö to Copenhagen. Directly opposite its entrance is an establishment calling itself a “facelift centre”. Designer houses cluster around its base. Green’s supermarket sells local organic food and advertises yoga classes and tango lessons on the beach.

Thirty years ago Malmö was the capital of working-class Sweden, a no-nonsense city dominated by solid citizens who worked in the Kockums shipyard and voted for the Social Democratic Party. Then the global economy turned against it. The shipyards contracted and the local factories and textile mills closed. The once-dominant working class shrank to near-invisibility and the population split between professionals living in designer lofts and refugees living in Rosengard’s high-rises. The giant Kockums crane that had become the city’s symbol in 1974 was dismantled and sent to South Korea in 2002. In 2005 the Turning Torso became the city’s new landmark.

The decline of the working class and the increasing polarisation of professionals and immigrants is being repeated across the region. The Nordic countries are still among the world’s most equal, and in one important respect they are becoming more so. In 2010-11 around 60% of university graduates in Finland and Sweden were women. Sweden has almost as many female as male MPs. In Denmark the prime minister and a raft of other ministers are women.

But in other respects money is making the Nordics less equal. As a proportion of the economy, Sweden’s private-equity industry is second only to Britain’s in Europe, and Norway is awash with oil money. Some of the new rich are splashing out on Porsches and big houses, but most prefer to spend their money in subtler and less conspicuous ways. Even so, they live in a different world from the immigrants stuck in Rosengard.

Special report: The Nordic countries

Lessons

The secret of their success

The Nordic countries are probably the best-governed in the world

Feb 2nd 2013

CECIL RHODES ONCE remarked that “to be born an Englishman is to win first prize in the lottery of life.” Today the same thing could be said of being born Nordic. The Nordic countries have not only largely escaped the economic problems that are convulsing the Mediterranean world; they have also largely escaped the social ills that plague America. On any measure of the health of a society—from economic indicators like productivity and innovation to social ones like inequality and crime—the Nordic countries are gathered near the top (see table).

Why has this remote, thinly populated region, with its freezing winters and expanses of wilderness, proved so successful? There was a time when most of its population would have unhesitatingly praised their government, which for most of the 20th century meant the social democrats in one of their various national guises. The government had provided the people with cradle-to-grave welfare services, rescuing them from the brutal life of their 19th-century forebears, and stepped in to save the capitalist economies from their periodic crises.

But free-marketers have poked holes in the pro-government explanation and offered a powerful alternative. In the period from 1870 to 1970 the Nordic countries were among the world’s fastest-growing countries, thanks to a series of pro-business reforms such as the establishment of banks and the privatisation of forests. But in the 1970s and 1980s the undisciplined growth of government caused the reforms to run into the sands. Free-marketers put the region’s impressive recent performance down to its determination to reduce government spending and set entrepreneurs free.

Government’s role in improving equality is also being questioned. Andreas Bergh, of Sweden’s Research Institute of Industrial Economics, argues that the compression of Swedish incomes took place before the arrival of the welfare state, which was a consequence rather than a cause of the region’s prosperity—and almost killed the goose that laid the golden eggs.

This special report has supported some of the free-marketers’ arguments. The Nordic countries had got into the habit of spending more on welfare than they could afford and of relying more on a handful of giant companies than was wise. They are right to try to trim their states and make life easier for business. But it would be wrong to ignore the role of government entirely.

The Nordic countries pride themselves on the honesty and transparency of their governments. Nordic governments are subject to rigorous scrutiny: for example, in Sweden everyone has access to all official records. Politicians are vilified if they get off their bicycles and into official limousines.

The Nordics have added two other important qualities to transparency: pragmatism and tough-mindedness. On discovering that the old social democratic consensus was no longer working, they let it go with remarkably little fuss and introduced new ideas from across the political spectrum. They also proved utterly determined in pushing through reforms. It is a grave error to mistake Nordic niceness for softheadedness.

Pragmatism explains why the new consensus has quickly replaced the old one. Few Swedish Social Democratic politicians, for instance, want to dismantle the conservative reforms put in place in recent years. It also explains why Nordic countries can often seem to be amalgams of left- and right-wing policies.

Pragmatism also explains why the Nordics are continuing to upgrade their model. They still have plenty of problems. Their governments remain too big and their private sectors too small. Their taxes are still too high and some of their benefits too generous. The Danish system of flexicurity puts too much emphasis on security and not enough on flexibility. Norway’s oil boom is threatening to destroy the work ethic. It is a bad sign that over 6% of the workforce are on sick leave at any one time and around 9% of the working-age population live on disability pensions. But the Nordics are continuing to introduce structural reforms, perhaps a bit too slowly but stolidly and relentlessly. And they are doing all this without sacrificing what makes the Nordic model so valuable: the ability to invest in human capital and protect people from the disruptions that are part of the capitalist system.

Getting to Denmark

Most of the rich world now faces the same problems that the Nordics faced in the early 1990s—out-of-control public spending and overgenerous entitlement programmes. Southern Europe needs a dose of Nordic tough-mindedness if it is to get its finances under control. And America needs a dose of Nordic pragmatism if it is to have any chance of reining in entitlements and reforming the public sector.

The Nordics are hardly blushing violets when it comes to advertising the virtues of their model. Nordic think-tanks produce detailed studies in English about how they reformed their states. Nordic politicians fight their corner in international meetings and Nordic consultants sell their public-sector expertise around the world. Dag Detter played a leading role in restructuring the Swedish state’s commercial portfolio in the 1990s, representing more than a quarter of the business sector. He has since advised governments in Asia and across Europe.

Yet it is hard to see the Nordic model of government spreading quickly, mainly because the Nordic talent for government is sui generis. Nordic government arose from a combination of difficult geography and benign history. All the Nordic countries have small populations, which means that members of the ruling elites have to get on with each other. Their monarchs lived in relatively modest places and their barons had to strike bargains with independent-minded peasants and seafarers.

They embraced liberalism early. Sweden guaranteed freedom of the press in 1766, and from the 1840s onwards it abolished preference for aristocrats in handing out top government jobs and created a meritocratic and corruption-free civil service. They also embraced Protestantism—a religion that reduces the church to a helpmate and emphasises the direct relationship between the individual and his God. One of the Lutheran church’s main priorities was teaching peasants to read.

The combination of geography and history has provided Nordic governments with two powerful resources: trust in strangers and belief in individual rights. A Eurobarometer survey of broad social trust (as opposed to trust in immediate family) showed the Nordics in leading positions (see chart below). Economists say that high levels of trust result in lower transaction costs—there is no need to resort to American-style lawsuits or Italian-style quid-pro-quo deals in order to get things done. But its virtues go beyond that. Trust means that high-quality people join the civil service. Citizens pay their taxes and play by the rules. Government decisions are widely accepted.

The World Values Survey, which has been monitoring values in over 100 countries since 1981, says that the Nordics are the world’s biggest believers in individual autonomy. The Nordic combination of big government and individualism may seem odd to some, but according to Lars Tragardh, of Ersta Skondal University College, Stockholm, the Nordics have no trouble reconciling the two: they regard the state’s main job as promoting individual autonomy and social mobility. Any piece of Nordic social legislation—particularly the family laws of recent years—can be justified in terms of individual autonomy. Universal free education allows students of all backgrounds to achieve their potential. Separate taxation of spouses puts wives on an equal footing with their husbands. Universal day care for children makes it possible for both parents to work full-time. Mr Tragardh has a useful phrase to describe this mentality: “statist individualism”.

Nordic people take this attitude to government with them when they go abroad. In the 19th and early 20th centuries some 1.3m people, a quarter of the Swedish population at the time, emigrated, mostly to the United States. America created an entire genre of jokes about “dumb Swedes” and their willingness to obey rules. These dumb Swedes created the best-governed enclaves in America, such as Minnesota. Even today Americans with Nordic roots are 10% more likely than the average American to believe that “most people can be trusted”.

Size isn’t everything

Economists frequently express puzzlement about the Nordic countries’ recent economic success, given that their governments are so big. According to a professional rule of thumb, an increase in tax revenues as a share of GDP of ten percentage points is usually associated with a drop in annual growth of half to one percentage point. But such numbers need to be adjusted to allow for the benefits of honesty and efficiency. The Italian government, for instance, imposes a heavy burden on society because the politicians who run it are mainly concerned with extracting rent rather than providing public services. Goran Persson, a former Swedish prime minister, once compared Sweden’s economy with a bumblebee—“with its overly heavy body and little wings, supposedly it should not be able to fly—but it does.” Today it is fighting fit and flying better than it has done for decades.

5 Responses to Pays nordiques: La chance d’avoir été les premiers à avoir atteint le futur (Something rotten in the state of Denmark no more: how reaching the limits of big government first can turn out to be a chance)

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