Follow the Swedes

Imagine if policy-makers actually heeded the Economist. Now I’m sure they’ve been wrong about stuff before, but they sure were prescient here.

The article is from 2005 and it succinctly and funnily, in the looking-back-on-it tragic kind of way, diagnoses the varying social models at work in Europe.

There is the Continental model (favored by Germany and France), the Mediterranean model (favored by the Latin Rim countries), the Anglo-Saxon model (favored by those in Albion), and finally the Nordic model (favored by our Scandinavian friends).

All seek to reduce income inequality and poverty; all provide protection against losing your job. But they use different policies to do this, and spend different amounts of money.

Laying out the basic advantages and disadvantages to each system – and comparing each model to a different “tincture” – the Economist ultimately determines that though it might be difficult to hierarchize the two northern models, the the Continental model is problematic at best while the Mediterranean one is unarguably terrible. Because they’re a British publication, they can get away with using words like tincture.

[P]roblems are concentrated in Mediterranean and continental countries. They are much more heavily indebted than Nordic and Anglo-Saxon ones… It seems unlikely that the French and Italians are going to turn into Dutch or Swedes, either in their social philosophies or their drinking habits. But over the next few years it ought to be possible for Europe’s laggards to reduce their over-reliance on hiring and firing laws (disastrous at a time of fast economic change) and to increase the rewards for getting a job. And they should be able to do this without agonising about the destruction of the European welfare state. The European model is not dead. But some of its varieties look increasingly unaffordable, and… they are destructive of honest labour.

from flickr

A few things to note in all this: (1) It’s too bad Berlusconi is more interested in¬†fledglings than necessary reforms and (2) why can’t Europe just suck it up and follow their Nordic neighbors. I get that different economies with varying demographic challenges, unequal access to native resources and unique historically constructed identities will adopt different social models. But still, it’s not hard to see here that there’s a righter and a wronger way of doing things.

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