Debunking Utopia
Page 5
High levels of trust, a strong work ethic, and social cohesion are the perfect starting point for successful economies. They are also the cornerstones of fruitful social democratic welfare policies. Of course, it is easier to introduce high taxes and generous welfare in countries that from the start have low poverty, few people willing to overuse welfare programs, many hardworking individuals, and a culture where people take care of their health.22 A common notion is that politicians in the United States have opted to introduce less-generous public programs, perhaps since they care little for the need of the poor, while politicians in the Nordics have chosen a more progressive route. Several times during my travels in the United States, after hearing that I live in Sweden, Americans have told me something along this line: “In Sweden you have chosen a system where government takes much greater care of its citizens.” But how much of this is because different arbitrary choices have been made in America? I would argue that much of the difference is because Americans live in a different culture than in the Nordics. Sure, different choices have been made, but they have been based on the different cultural circumstances.
We must account for the fact that welfare state policies have been more suited for Nordic societies than for the American. During the first half of the twentieth century, the Nordic countries had – as explained in chapter 2 – similar-sized governments as the United States. Up to this point the policy direction in both regions was fairly similar. In fact, after the Great Depression American politicians such as Franklin D. Roosevelt were at least as enthusiastic about introducing wideranging welfare state programs as their counterparts in the Nordics. The common assumption that the United States early on chose a small government path while Scandinavia rapidly moved toward large welfare regimes is simply not true. In reality the American welfare system developed parallel to that of Scandinavian countries. But there was a major difference: American welfare met with early criticism, precisely because the unintended consequences of deteriorating norms and family breakup was so evident.
In homogenous Scandinavia this early criticism did not materialize, at least not on nearly the same scale. The uniquely strong norms associated with personal responsibility and work in the Nordics made these societies particularly well suited for avoiding the moral hazard of generous welfare systems. If America had the same levels of trust and work ethics, it would be more feasible to introduce Nordic-style social democracy. Without these attributes, the dreams of politicians such as Bernie Sanders will be difficult to achieve. Even if American politicians on the left were given free rein, I very much doubt that they would be able to transform the United States to a Nordic society. Sure, many ideologies believe this to be possible, but then again, ideologues have a tendency to vastly exaggerate the power of politics to change society.
Of course, one could argue that it’s the other way around. Perhaps the Nordic countries have cooperation and high levels of trust because of the large welfare states. We shouldn’t reject this notion out of hand. In theory it could be true. If people want to have a generous welfare system, and know that the system will only work if individuals are trustworthy and do not overuse welfare, then they might make a concerted effort to create a trustworthy society. So, do the Nordic countries have large welfare states since they began with high levels of trust, which allowed for generous welfare systems, or do they have widespread trust because this is the result of social democratic policies? In other words: did the chicken come first or the egg? By relying on the sophisticated methodology used by Swedish researcher Andreas Bergh and his Danish colleague Christian Bjørnskov, we can find the answer to this question.
A long tradition in psychology indicates that a basic sense of trust in strangers is instilled in individuals in early childhood. This basic sense remains relatively stable for the rest of the individual’s life, if not disturbed by major events. Indeed, high levels of trust seem to span over generations, as they are passed from parent to child. An important observation is that the trust levels of Americans closely follows the trust levels of the countries from which their ancestors came. And as it turns out, no group in the United States has as high trust levels as those with Scandinavian origins. Americans of Scandinavian decent even have slightly higher levels of trust than their cousins who inhabit the Scandinavian countries themselves.23 This suggests that the origin of the Nordic culture of success predates modern welfare states. After all, large-scale migration of Nordic people to the United States occurred during the late nineteenth century and the early twentieth century, well before the shift toward large public sectors. Researchers Andreas Bergh and Christian Bjørnskov use a number of different statistical techniques to examine historic trust levels. They have concluded that historic trust levels are not caused by welfare state design, since welfare states are a relatively modern phenomenon. The authors explain: “Trust is high in universal welfare states, not because welfare state universality creates trust, but because trusting populations are more likely to create and sustain large, universal welfare states.”24
[Only] trusting populations are more likely to create and sustain large, universal welfare states.
So it seems that the unique Nordic culture predates the welfare state. Additionally, this unique culture is found both in the citizens of Nordic nations as well as among Nordic Americans. How well, then, does the latter group, who combine the unique Nordic culture with living in the capitalist American society, fare? If we assume that Nordic-style social democracy is the key to success, we should expect this group to have poor results. If we believe that Nordic culture is what matters, we should expect Nordic Americans to be thriving. Comparing Nordic Americans with the Nordics is important in figuring out if it makes sense for America to adopt Nordic-style social democracy or not. The arguments made by admirers of democratic socialism in the United States are, after all, about comparing apples (Nordic people) with oranges (American people). When we compare apples (Nordic people) with apples (Nordic American people) we find that the core arguments of those such as Bernie Sanders simply vanish. If anything, the comparison of apples with apples is in favor of the American rather than the Nordic social system.
4
COMPARING APPLES TO APPLES
A KEY LESSON FROM THE success of the Nordics is that culture matters. We should not be surprised that it is these societies, with their strong ethics and sense of community, that managed to achieve even income distributions and good social outcomes before introducing large welfare states. Well before the public sector stepped in, churches and voluntary community groups were improving social conditions by emphasizing individual responsibility. The Nordic people were thought in their local communities to work hard, drink moderately, take care of their families, and help their neighbors. But of course, this success isn’t limited to one side of the Atlantic. A large share of the Nordic population migrated to the United States during the nineteenth century. Although it was typically the less well-off families who sailed for prospects overseas, facing many difficulties and often starting new lives with empty hands, they prospered by relying on the same norms that had served them so well in their homelands.
Early Nordic immigrants to the United States, among others, began arriving during the seventeenth century to the small colony New Sweden around the Delaware Bay. Following the American Civil War, migrants from Scandinavia started to arrive in the United States in substantial numbers. Thanks to the Homestead Act of 1862 – a government program that promised land ownership to pioneers who chose to settle undeveloped federal land west of the Mississippi – some of the most pronounced Nordic societies sprang up in the Midwest. Within a generation, Nordic migrant communities had spread from coast to coast. The migrants had to overcome many challenges in their new homeland, but seem to have been successfully assimilated. In the book Immigrants in American History: Arrival, Adaptation, and Integration, American historian Arnold Barton has written, “Compared with many other immigrant groups, the Swedes and other Scandinavians were on the whol
e well received by the older, dominant Anglo-American population in the new land…. They soon gained the reputation of being hardworking, honest, and reliable.”1 Similarly Eric Dregni explains in the book Vikings in the Attic: In Search of Nordic America, “The Swedish immigrants were very soon accepted as hard working and honest – if a bit dim due to their accents. In general, the Swedes quickly integrated and just as quickly dropped any reference to their previous life in Sweden. They fit in more quickly with mainstream American than any other ethnic group.”2
Nordic migrants did face negative stereotypes and hostility, like many immigrant groups before them. However, their fellow Americans soon came to acknowledge the working ethics that the Nordics are famous for. Those who had traveled across the Atlantic did so to escape poverty. America offered them the chance for upward mobility. In 1910 George Erickson, a Swedish miner on the Gogebic Range, wrote in a letter home, “[I am] glad that I am not home but here where I am, for as far as the economy and working conditions are concerned America is far ahead of Sweden for a poor workingman. At the same time you have to be clever, a good worker, and reliable. A man who drinks a lot has no future here. There are so many people that they have demands on a man, but otherwise the Swedes are highly valued as workers, so highly that even if you go and ask for work the boss may ask if you are Swedish, in that case you get work right away.”3
“The Swedish immigrants were very soon accepted as hard working and honest… They fit in more quickly with mainstream American than any other ethnic group.” – ERIC DREGNI
The contributions of Nordic people to the United States are often forgotten. However, people from Nordic ancestry have played a key role in shaping American society. An example is Norman Borlaug, great-grandchild of Norwegian immigrants to the United States. Many Nordic Americans have won the Nobel Prize, but Borlaug was also awarded the Presidential Medal of Freedom and the Congressional Gold Medal for developing a high-yield, disease-resistant, semi-dwarf Mexican wheat during the 1940s. This may not seem all that exciting, but in fact Borlaug is credited with having launched the Green Revolution – wherein new technology and new strains made it possible to substantially increase global food output. For his achievements he has been called “the man who saved a billion lives.”4 Conrad Hilton, whose father was a Norwegian immigrant, founded Hilton Hotels, while John Hundale Lawrence, whose grandparents had come from Norway, pioneered the field of nuclear medicine. Danish immigrant Hans Christian Febiger was an American Revolutionary War commander, confidant of George Washington, and later treasurer of Pennsylvania.
There is no shortage of Swedish American engineers. Gideon Sundback made several key advances in the development of the zipper. Alexander Samuelson and his colleagues designed the famous original Coca-Cola bottle. Swedish American chemist Glenn Theodore Seaborg was the principal or codiscoverer of no fewer than ten elements. John Ericsson, a Swedish-American inventor, is regarded as one of the most influential mechanical engineers in history. He amongst others designed the US Navy’s first screw-propelled steam-frigate, the USS Princeton, together with Captain Robert Stockton. A fatal accident happened during the speed trial of the frigate. Ericsson however redeemed himself by working together with industrialist Cornelius DeLamater in designing the USS Monitor. The ship, which was the first in the world with a rotating tower, played an important role in the American Civil War. Clarence Leonard Johnson’s role in American defense is difficult to overstate, as he played an important part in the design of the various jet fighters that saw America through the Second World War and the Cold War. One of America’s leading mathematicians, Lars Valerian Ahlfors, was of Finnish origin.
Nordic Americans are still thriving today. According to the U.S. Census, there are approximately eleven million Americans who either report to have origins in Sweden, Denmark, Norway, and Finland, or alternatively simply state that they have Scandinavian background (Icelandic Americans seem to be too few to measure).5 Thus, if Nordic Americans formed their own nation, it would have a greater population than any one of the actual Nordic countries. It is worth comparing the social and economic outcomes of the eleven million Nordic Americans, with their nearly 25 million cousins in the actual Nordic countries.
As stated before in this book, Americans on average have a higher living standard than the population of the Nordics, with the exception of oil-rich Norwegians. Nordic Americans have, thanks to their uniquely successful culture, an even bigger advantage. As the following table shows, Danish Americans have fully 55 percent higher living standard than Danes.6 Swedish Americans have similarly 53 percent higher standard than Swedes. The gap is even greater, 59 percent, between Finnish Americans and Finns. Even though Norwegian Americans lack the oil wealth of Norway, they have 3 percent higher living standard than their cousins overseas. These numbers are quite impressive. I would very much like to hear how proponents of Nordic-style social democracy would respond to them. Let’s not forget: those people who migrated from the Nordics were the more impoverished ones, while the more affluent people often stayed behind.7 If anything, the latter groups should be expected to be slightly ahead in living standard. However, the American economic system has evidently allowed people of Nordic origin to achieve a much higher living standard than the social democratic economic systems of the Nordics. When comparing apples with apples, we find that the choice between an American-style and a Nordic-style economic model seems to be a 50 percent higher living standard. High school graduation rates, another common metric of social advancement, is also in favor of Nordic Americans. At age twenty-five, around one in five in the Nordics has yet to graduate high school. As the following table shows, among Nordic Americans, fewer than one in twenty lacks a high school diploma at the same age.8
GDP PER CAPITA (US DOLLARS)9
DANISH AMERICANS
$70,925
SWEDISH AMERICANS
$68,897
SCANDINAVIAN AMERICANS
$68,081
NORWEGIAN AMERICANS
$67,385
NORWAY
$65,685
FINNISH AMERICANS
$64,774
ALL AMERICANS
$52,592
DENMARK
$45,697
SWEDEN
$45,067
FINLAND
$40,832
American Community Survey, OECD Stat Extract, and author’s calculations. GDP per capita for Nordic American groups have been estimated by dividing their per capita incomes, as stated by the American Community Survey, with the average American per capita income. The number has thereafter been multiplied with the average GDP per capita in the United States. Based on 2013 data and 2013 rate of U.S. dollars.
HIGH SCHOOL GRADUATION RATES AMONG THOSE 25 YEARS OR OLDER
COUNTRY
PERCENT
SCANDINAVIAN AMERICANS
97.3
SWEDISH AMERICANS
96.6
DANISH AMERICANS
96.5
FINNISH AMERICANS
96.4
NORWEGIAN AMERICANS
96.3
ALL AMERICANS
86.3
NORWAY
80.7
SWEDEN
79.6
FINLAND
78.0
DENMARK
75.1
American Community Survey, Eurostat database and author’s calculations. Based on 2013 data.
The tired, poor and huddled masses who migrated from the Nordic shores to the US have also over time largely escaped poverty.
So, it seems that the American system allows for higher prosperity and encourages more students to graduate high school. But what about social exclusion? To start, we can look at the unemployment rates of Nordic Americans and compare it to those living in the Nordic nations. Norway has a seemingly low unemployment rate, which, as you will see in a later chapter, is due to a system where true unemployment rates are hidden within welfare programs. Besides Norway, the Nordic countries
have twice the unemployment rate of Nordic Americans, and also slightly higher rates than the average American.10 The tired, poor and huddled masses who migrated from the Nordic shores have also over time largely escaped poverty. Nordic Americans have less than half the average American poverty rate. Danish Americans have as low as one-third of the national poverty rate (see the Poverty Rate table that follows).
UNEMPLOYMENT RATE11
COUNTRY
PERCENT
NORWAY
3.4
FINNISH AMERICANS
3.6
NORWEGIAN AMERICANS
3.7
SCANDINAVIAN AMERICANS
3.8
SWEDISH AMERICANS
3.9
DANISH AMERICANS
4.1
ALL AMERICANS
5.9
DENMARK
7.0
SWEDEN
8.1
FINLAND
8.2
American Community Survey, OECD Stat Extract. Calculations based on 2013 data. U.S. data for sixteen year and older. European data for fifteen and older.