Why we should look to Scandinavia for the future of humanity.

Whenever there are surveys of human happiness and social well-being, or we look for examples of how to deal successfully with social issues, how best to educate our children,  look after our elderly, address mental health and child poverty – almost inevitably we find ourselves being told about what the Scandinavian countries are doing. Why is that?

I have a theory – that Scandinavians have learned to live by the core principles that have underpinned our success as a species; living in a harsh climate where winter lasts for six months, they know to plan ahead and live and work cooperatively.

Let’s start with a classic example. The North Sea oil bonanza which started in 1965 (1969 for Norway) and continues today, has delivered vast sums of money to the economies of the UK and Norway.

Norway saw the opportunity to save for the future and so they created a sovereign wealth fund into which they poured profits from the state-owned oil and gas industries.

That state-owned fund is now worth US$1trillion, the largest in the world. Its purpose is to smooth out the price fluctuations in the market place, thus providing security for the future of Norway. For the 5.2 million Norwegians it represents a wealth of almost US$200,000 – each. Norway also created a separate smaller fund, the Government Pension Fund as a kind of national insurance scheme to cover the government’s obligations to pay pensions to its ageing population.

The UK by contrast spent all the oil revenues it earned. Instead of diverting at least some of the proceeds into a wealth fund, like Norway, PM Margaret Thatcher used the oil revenue to cover the costs of large-scale industrial restructuring and to fund expensive tax cuts. Of course, those tax cuts primarily benefited the middle class and the wealthy.

How much are we talking about? In the years between 1980-81 and 1989-90, the Thatcher governments received a staggering windfall of £166bn. But they chose not to save anything for the future.

According to PricewaterhouseCoopers’ chief economist John Hawksworth, had this money been invested in ultra-safe assets it would conservatively have been worth £450bn by 2008.  A professor of accounting at Queen Mary University of London, Sukhdev Johal, thinks the total might well have been £850bn by now.

Instead, the top rate of tax came down from 60p in the pound to just 40p by 1988 and the government and its citizens squandered much of the oil money on real estate, cars and a lavish lifestyle for the rich.

And guess what – today the UK is struggling to find enough money to keep the NHS functioning and to pay for the age pension.

By contrast the Norwegian government determined in 1974 the principle that oil wealth should be used to develop a “qualitatively better society”.

And guess what?

In the Better Life Index, Norway ranks top in personal security and subjective well-being and ranks above the average in environmental quality, jobs and earnings, income and wealth, education and skills, housing, work-life balance, civic engagement, social connections, and health status.

According to the OECD, in general, Norwegians are more satisfied with their lives than the OECD average. When asked to rate their general satisfaction with life on a scale from 0 to 10, Norwegians gave it a 7.6 grade on average, much higher than the OECD of 6.5.

At its simplest, it comes down to societies that think ahead and plan for the future – and those that don’t. It’s somewhat like the Stanford test in which they gave young children a treat, say a marshmallow and told them that if they could resist eating it for fifteen minutes they’d be given an extra marshmallow. Those running the test left the room but recorded the events on video. The children able to control their immediate desire to eat the treat are – it turns out – the ones most likely to succeed in life. They are the ones who are less likely to wind up in trouble, with unstable relationships and jobs and most likely to be successful by thinking ahead, anticipating consequences and planning for the future.

That appears to me to be the characteristic which defines Scandinavian societies. They are able to resist the urge to grab everything now – rather they plan for and put aside resources for the future.

That speaks to a number of qualities that are essential for the survival of human society and which are especially important right now:

  • Equality
  • Social responsibility
  • Civic duty
  • Co-operation
  • Focus on the greater benefit of all in society rather than the few

A recent article in New Scientist, cheerfully titled, “Decline and Fall: worrying signs that civilisation is starting to collapse” featured scientists who had investigated the causes of failed societies.

Their research showed that either extreme inequality or resource depletion could push a society to collapse, but collapse is irreversible only when the two coincide.

That sounds depressingly like what we see today, a world that is hooked on the use of fossil fuels and in which the divide between the wealthy and less well-off is growing significantly.

Except in Scandinavia – where they have invested heavily in alternative energy sources and are committed to reducing their dependence on fossil fuels.

Norway produces 99 percent of its electricity from hydro power, Sweden produces 50 percent of its energy needs from nuclear power plants, while Denmark generates 41 percent of its electricity from fossil fuels and 42 percent from wind power.

Sweden has committed to 100% renewable energy by 2040, while Denmark has set the date of relying 100% on renewable energy to 2050. Norway, Sweden and Denmark have committed to contribute to the 2050 greenhouse gas emission reduction targets of the European Union

Meanwhile, according to The Economist, Norway “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”.

Reviewing a recent book, Viking Economics, by George Lakey, the Institute for Policy Studies, a left-leaning US think tank says the author “dismisses the common right-wing claim that the Nordic countries are “welfare states,” full of dependence”. The author, instead argues that “the Nordic model focuses on poverty alleviation, a robust social safety net, and full employment, with a commitment to work as a central part of their anti-poverty strategy for those who are able. The quality of life for workers is much higher, and the work-life balance is considerably healthier than in the United States.”

That gels with a survey published by The Guardian’s Inequality datablog which cites the World Happiness Report, which ranks 155 countries from 1 to 10 in terms of happiness and is based on a survey of 1,000 people from each country. The measure is “based on real GDP per capita, social support, healthy life expectancy and people’s perception of their freedom to make life choices, generosity, and perceptions of corruption.”

In the latest report the Nordic countries lead the way, with Norway, Denmark Iceland and Finland at the top of the list.

The neo-liberal right will argue that this ‘nanny-state’ welfarism creates a disincentive to hard work and smothers entrepreneurial innovation. But, according to the Institute for Policy Studies, “Lakey contests the misconception that high taxes and regulation in the Nordic countries stifle business and entrepreneurship. Productivity rates are considerably higher, even with a shorter workweek. And the rate of start-up companies in Norway and Denmark is considerably higher than the U.S.  Researchers from the U.S. found that Nordic entrepreneurs are greater risk-takers because they don’t worry about education debt, retirement, and medical care, thanks to universal services.”

A recent Guardian Weekly article focused on the successes of Finland. In a feature piece, titled, “Civic duty and transparency: the keys to Finland’s success”, the author, Jon Henley wrote that last year (2017), Finland was ranked the most stable, the safest, and best-governed country in the world. It was also the wealthiest, the third least corrupt, the second most socially progressive and the third most socially just. Searching for what word best reflects Finnish character, the author quotes a Finnish novelist who says it’s Talkoo, which means “working together, collectively, for a specific good. Getting the harvest in, stocking wood, raising money. It’s about co-operating. Everyone together, equally”.

That, I believe, is what we should aim for here in New Zealand. We have many of the right attributes and qualities: a society that is caring, that believes in a better future for all New Zealanders, we do look out for each other and we have historically much of that resilience and doggedness in the face of hardship which also characterises the Finns.

However, we need to reject the beguiling narrative of neo-liberalism which argues that individuals are more important than societies, that competition is better than co-operation, that success is judged primarily in terms of wealth, that governments are not there to uphold social and community values but to manage the economy and reduce taxes. It’s a philosophy that appeals to the top end of town (lower taxes, less regulation, no social responsibility), to those who believe others less fortunate have only themselves to blame (no welfare, lower taxes), and to the worse aspects of human nature (look after myself).

Sadly, this narrative has had a good run over the past 30 plus years with devastating consequences. The deregulation of the banking and investment industries as well as food, pharmaceutical and alcohol (to name but a few) has caused massive financial collapses, millions of people to have lost their life savings, stagnating wage levels, an epidemic of drug and alcohol dependency and obesity.

A very few people have become incredibly rich while the wages and living standards of the majority have declined by comparison or at best stayed static, and the divide between the two has increased to stunning if not obscene levels.

In the process, many western governments have abdicated their responsibility to the people they are supposed to serve in favour of corporations – arguing that it’s all good for the economy and that the benefits will trickle down to everyone. Supposedly.

But even if some of that wealth had trickled down – would it make for a happier, healthier society? If we look to the Scandinavian countries, their model suggests not; that community values, social investment in health and education, caring for everyone in society matters at least as much if not more than personal prosperity.

That in turn suggests we need to reject the neo-liberal narrative and to grow up in our attitudes towards tax and the role of government. We need to reject short-termism, me-ism and think about the longer-term viability of society. We need to reduce inequality, invest in social infra-structure, health and education and plan for our future – together, all of us. That means being willing – indeed happy to pay our taxes.

Working cooperatively might mean less individual wealth but that’s a small price to pay if in exchange we create a richer society that offers our children and grandchildren a hopeful future where they don’t have to worry about student debt, whether they can afford a house or medical treatment, where educational standards are world-class, where corruption is lower and trust higher and where, in a meaningful way, we genuinely care about each other.

This is not some loony concept dredged up from failed communist manifestos. The Scandinavians are proof positive of that. Indeed, if we look back at the long history of our species, much of it has been spent living in extended family groups of around 50 or so. Archaeological and anthropological evidence is witness to the fact that we succeeded by co-operating, by building societies around core community values, that we helped others who were less able through sickness or injury to support themselves, that we were collaborative and creative.

That is at the heart of our success as a species – and why after 300,000 years we are still here, but only if we stay true to the spirit of what makes us human. The Scandinavians know this and we should look to them for how we must live if we want to survive.

2 thoughts on “Why we should look to Scandinavia for the future of humanity.

  1. Great article Andrew and well thought through. However, I personally think that New Zealand society is becoming riddled with a mean-spirited nature that I’m sure wasn’t here when I was growing up. For instance, the tax working group put together recently have made some quite compelling arguments that unfortunately probably won’t go anywhere. We seem to have become very narrow-minded and any notion of planning for a a better ‘we’ future than a ‘me’ one, seems to get loudly derided.

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  2. Thanks Mark, I know how you feel, Western society has become infected with selfishness and self-interest/self-obsession and it’s deeply worrying. The trouble is it suits the mega-wealthy to maintain the status quo. As the New Scientist article says, the “haves” are buffered by their wealth from the effects of resource depletion for longer than the “have-nots” and so resist calls for a change of strategy until it is too late. Cheers, Andrew

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