Tuesday, August 4, 2015


Returning to Nima Sanandaji's Scandinavian Unexceptionalism, we hear that actually, there is something exceptional;
Why do Nordic societies have unusually strong emphasis on individual responsibility and strong social capital? Religion, climate and history all seem to have played a role in forming these unique cultures.
The Protestant work ethic, in Max Weber's famous coinage.
According to Swedish scholar Assar Lindbeck, it has historically been difficult to survive as an agriculturalist without working exceptionally hard in the hostile Scandinavian environment. The population therefore out of necessity adopted a culture with a great emphasis on individual responsibility and hard work....What is unique about Nordic nations is not only that they are cold, but also that throughout most of their recent history they have been dominated by independent farmers.
They largely--with the exception of Denmark-- escaped the feudalism that shackled other Europeans. Historically, Scandinavians owned their own land and reaped the benefits of their own hard work and diligence.

It took centuries to develop the levels of social cohesion present in the Nordic nations. Unfortunately, that managed to make it possible (around 1970) to implement high taxes and generous benefits that would not, at first, be abused because of the undesirable incentives.

But it didn't take much time for those incentives to erode the Nordic work ethic. By the 1990s the decline was obvious. By contrast, in the USA, among descendants of Scandinavians who'd emigrated there before the shift in attitudes--i.e., in the late 19th and early 20th centuries--there was no such decline in social cohesion. In the USA the socializing of the economy was much less pronounced. Taxes were lower, benefits too. Not to mention the absence of heavy handed central planning.

Central planning that was such a disaster in Sweden (Third-Way policies), they were partly reversed, circa 1995. But only partly. There remain unpleasant social realities;
...dependency on government handouts among large subsections of the population. Families have thus become trapped in poverty. The policies have, in particular, limited the ability of the societies to integrate immigrants into their labour markets.
Which reminds us of a famous dictum of the late Milton Friedman;
If you have free immigration, in the way we had it before 1914, everybody benefited. The people who were here benefited. The people who came benefited. Because nobody would come unless he, or his family, thought he would do better here than he would elsewhere. And, the new immigrants provided additional resources, provided additional possibilities for the people already here. So everybody can mutually benefit.

But on the other hand, if you come under circumstances where each person is entitled to a pro-rata share of the pot, to take an extreme example, or even to a low level of the pie, than the effect of that situation is that free immigration, would mean a reduction of everybody to the same, uniform level.
Friedman admits that last is a bit of exaggeration, it wouldn't be quite that bad. But the Nordic experience today is validating his prediction. 

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