Debunking Utopia
Page 16
8.Remarks by President Obama, President Niinistö of Finland, and Prime Minister Solberg of Norway at the Nordic Leaders’ Summit Arrival Ceremony,” press release, White House, Office of the Press Secretary, May 13, 2016, https://www.whitehouse.gov/the-press-office/2016/05/13/remarks-president-obama-president-niinist%C3%B6-finland-and-prime-minister.
9.“The Boss Vill Göra Amerika Lite Svenskare” (The Boss Wants to Make America a Bit More Swedish,” Dagens Nyheter, 2012; Adam Taylor, “Bruce Springsteen Wants the United States to Be More Like Sweden,” Business Insider, February 17, 2012, http://www.businessinsider.com/bruce-springsteen-sweden-2012-2.
10.“Sweden: Something Souring in Utopia,” Time, July 19, 1976, http://content.time.com/time/subscriber/article/0,33009,914329-3,00.html.
11.John Logue, “The Welfare State: Victim of Its Success,” Daedalus 108 no. 4 (Fall 1979): 75.
12.Ibid.; John Logue, “Will Success Spoil the Welfare State? Solidarity and Egotism in Scandinavia.” Dissent, Winter 1985, 96–104.
13.David Popenoe, “Scandinavian Welfare,” Society 31, no. 6 (September 1994): 78.
14.Jeffrey D. Sachs, “The Social Welfare State, beyond Ideology,” Scientific American, November 1, 2006, 42.
15.Paul Krugman, “Socialist Hellhole Blogging,” The Conscience of a Liberal (New York Times blog), August 19, 2011, http://krugman.blogs.nytimes.com/2011/08/19/socialist-hellhole-blogging/.
16.Derrick Z. Jackson, “Memo to Hillary Clinton: What’s Not to Like about Denmark?” Boston Globe, October 19, 2015, https://www.bostonglobe.com/opinion/2015/10/19/memo-hillary-clinton-what-not-like-about-denmark/PoV2OD3KpysMFCAz2XLI0K/story.html.
17.“Nobel Nucléaire,” Le Monde, August 10, 2005.
18.Shangri-La is a fictional place described in the 1933 novel Lost Horizon, written by British author James Hilton. Hilton describes it as a mystical, harmonious valley. Rich Lowry recently used Shangri-La as an analogue for the American Left’s view of Nordic welfare states in his article “Sorry, Bernie – Scandinavia Is No Socialist Paradise after All,” New York Post, October 19, 2015, http://nypost.com/2015/10/19/sorry-bernie-scandinavia-is-no-socialist-paradise-after-all/.
19.OECD, Better Life Index–Edition 2015, OECD.Stat, http://stats.oecd.org/Index.aspx?DataSetCode=BLI. The analysis is based on the default settings on the index, where the different sub-indexes are measured equally. The Nordic countries also ranked high in previous editions of the same index. See, for example, Huffington Post Canada, “Canada Ranks Fifth On OECD’s Better Life Index,” Huffington Post, May 5, 2014, http://www.huffingtonpost.ca/2014/05/05/canada-better-life-index_n_5269677.html; and “Australia Ranked ‘Happiest’ Developed Nation Again,” BBC News, May 28, 2013, http://www.bbc.com/news/business-22685260.
20.Save the Children, The Urban Disadvantage: State of the World’s Mothers 2015 (Fairfield, CT: Save the Children, 2015), 9, http://www.savethechildren.org/atf/cf/%7B9def2ebe-10ae-432c-9bd0-df91d2eba74a%7D/SOWM_EXECUTIVE_SUMMARY.PDF.
CHAPTER 2: NORDIC SUCCESS PREDATES LARGE WELFARE STATES
1.Field of Dreams, directed by Phil Alden Robinson (Universal City, CA: Universal Pictures, 1989). Film.
2.Henrik Jacobsen Kleven, “How Can Scandinavians Tax So Much?,” Journal of Economic Perspectives 28, no. 4 (Fall 2014): 96, http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.28.4.77.
3.Based on my calculations using the latest available data (2014) from OECD.Stat, the standard of living among Icelanders is 81 percent as high as in the United States, while that of Sweden and Denmark is 83 and 85 percent, respectively, as high. Thanks to the oil, Norwegians are 19 percent more affluent than Americans. Finns have 75 percent of the prosperity of Americans, although their country, like Sweden and Norway, has massive forestry resources. See the data for GDP per head of population. USD, current prices, current PPPs, at http://stats.oecd.org/, accessed February 9, 2016.
4.In 1960 the total tax rate in the United States was 27 percent. This is comparable with the Nordic countries, as the tax rate was 25 percent in Denmark, 28 percent in Finland, 29 percent in Sweden, and 32 per cent in Norway. “Government Tax and Revenue Chart,” usgovernmentrevenue, accessed April 20, 2016, http://www.usgovernmentrevenue.com/revenue_chart_1900_2020USp_F0fF0sF0l; Nordic data is from the Swedish Tax Agency’s (Skatteverket) “Tax Statistical Yearbook of Sweden 2007.” Historic data for Iceland is difficult to find.
5.In 2000 taxes amounted to 28 percent of GDP in the United States, lower than in Iceland, with a 36 percent rate, and much lower than in Norway (42 percent), Finland (46 percent), Denmark (47 percent), and Sweden (49 percent). OECD, “Revenue Statistics – Comparative tables,” OECD.Stat, accessed February 9, 2016, http://stats.oecd.org/Index.aspx?DataSetCode=REV.
6.Associated Press, “What Can the U.S. Learn from Denmark?” The Rundown (PBS blog), October 15, 2015, http://www.pbs.org/newshour/rundown/can-u-s-learn-denmark/.
7.Based on calculations gathered from the World Bank World Development Indicators Database, accessed February 7, 2016. See http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators.
8.usgovernmentrevenue.com and the Swedish Tax Agency (2007).
9.World Bank World Development Indicators Database.
10.Under-five mortality rate for 2015. UN Inter-agency Group for Child Mortality Estimation (IGME), Child Mortality Estimates, http://www.childmortality.org, data gathered February 7, 2016.
11.Jesper Roine and Daniel Waldenström, “The Evolution of Top Incomes in an Egalitarian Society; Sweden, 1903–2004,” Journal of Public Economics 92, nos. 1–2 (2008): 366.
12.A. B. Atkinson and J. E. Søgaard, “The Long-Run History of Income Inequality in Denmark: Top Incomes from 1870 to 2010” (2013), EPRU Working Paper Series, Department of Economics, University of Copenhagen, available for download at https://ideas.repec.org/p/kud/epruwp/13-01.html.
13.Tino Sanandaji, “Poverty and Causality,” Critical Review 24, no. 1 (2012): 56–57.
14.One of the reasons that children’s incomes are related to those of their parents is that general differences exist between subgroups within society. Studies that have decomposed mobility find that more than half of the intergenerational correlation in the United States is due to persistence of earnings differences across racial and ethnic groups. See Tom Hertz, “A Group-Specific Measure of Intergenerational Persistence,” Economics Letters 100, no. 3 (September 2008): 415–17.
15.OECD Stat Extract. Latest available data for the year 2014, http://stats.oecd.org/.
CHAPTER 3: COFFEE-CONSUMING WORKAHOLICS
1.Trygve Gulbrandsen, for example, found that over 90 percent of Norwegian managers in both the private and the public sector agree that laws giving employers influence over businesses are advantageous for Norwegian working life. Gulbrandsen, “Elite Integration and Institutional Trust in Norway,” Comparative Sociology 6 (2007): 190–214, https://www.duo.uio.no/bitstream/handle/10852/15204/EliteintISS.pdf?sequence=1. See also Peter B. Smith et al., “In Search of Nordic Management Styles,” Scandinavian Journal of Management 19, no. 4 (2003): 491–507; and Tor Grenness, “På Jakt Etter en Norsk Ledelsesmodell” (In Search of a Norwegian management model), Magma (2012): 51–59, http://www.magma.no/pa-jakt-etter-en-norsk-ledelsesmodell.
2.Marie-joelle Browaeys and Roger Price, Understanding Cross-Cultural Management (Essex, UK: Prentice Hall, 2008).
3.See, for example, Birte Siim and Pauline Stoltz, “Particularities of the Nordic: Challenges to Equality Politics in a Globalized World,” in Stine Thidemann Faber and Helene Pristed Nielsen, eds., Remapping Gender, Place and Mobility: Global Confluences and Local Particularities in Nordic Peripheries
(Gender in a Global/Local World) (London and New York: Routledge, 2015), chap 2.
4.Kelly Services, “Company Loyalty and Employee Engagement in the Workforce – A European Perspective: 2010 Kelly Global Workforce Index,” http://www.slideshare.net/MicKir/company-loyalty-and-employee-engagement-report-4471514.
5.Richard R. Gesteland, Cross-Cultural Business Behavior: A Guidebook for Those Who Work in Different Countries, 5th rev. ed. (Copenhagen Business School Press, 2012).
6.David Kamp, “The Hacker and the Hack,” New York Times Sunday Book Review, May 28, 2010, http://www.nytimes.com/2010/05/30/books/review/Kamp-t.html?pagewanted=all.
7.Roberto Ferdman, “Here Are the Countries That Drink the Most Coffee – the U.S. Isn’t in the Top 10,” Atlantic, January 15, 2014, http://www.theatlantic.com/business/archive/2014/01/here-are-the-countries-that-drink-the-most-coffee-the-us-isnt-in-the-top-10/283100/.
8.International Coffee Council, Trends in Coffee Consumption in Selected Importing Countries, September 2012, http://www.ico.org/documents/icc-109-8e-trends-consumption.pdf.
9.Taija Ojaniemi ““Coffee as a Finnish Institution”: A FAST-FIN-1 (TRENAK1) Finnish Institutions Research Paper, Department of Translation Studies, University of Tampere (2010), http://www15.uta.fi/FAST/FIN/GEN/to-coffe.html.
10.Ibid.
11.See, for example, R. H. Nelson, “Max Weber Revisited,” in Ilkka Pyysiäinen, ed., Religion, Economy, and Cooperation (n.p.: De Gruyter, 2010).
12.Assar Lindbeck, “Hazardous Welfare-State Dynamics,” American Economic Review 85, no 2 (1995): 9–15; Assar Lindbeck, “An Essay on Welfare State Dynamics,” CESifo Working Paper Series no. 976 (May 15, 2003), http://www.ifn.se/Wfiles/wp/WP595.pdf.
13.Quoted in R. W. McColl, ed., Encyclopedia of World Geography (“political geography”).
14.Denmark is the only Nordic nation that adopted a feudal system where most farmworkers were landless and also limited from seeking employment on a free labor market. The result was that farmers had little incentives to work hard to produce the food. During the late eighteenth century and onward, Denmark begun moving toward a system of independent farmers, which opened the path to increased prosperity.
15.Jefferson made this remark in 1781, a few years after playing a key role in writing the Declaration of Independence and two decades before becoming the third president of the new nation. Merrill Peterson, ed., Jefferson Writings (New York: Literary Classics of the U.S., 1984), 301.
16.The poem “Saarijarven Paavo” and description of the circumstances relating to its writing appear in Lars Huldén, ed., Johan Ludvig Runeberg Dikter (Stockholm: Atlantis, 1998).
17.The Treasury of Knowledge and Library of Reference, Parts I., II., and III., 5th ed., s.v. “Sweden.” Similarly, a source from the early nineteenth century explains, “[Swedes] are brave, sober, patient, pliable, well-principled, and industrious.” John Joseph Stockdale, The History of Gustavus Adolphus, King of Sweden, Surnamed the Great, 3rd ed., vol. 1 (London: Hausard, 1807), 212.
18.Conrad Malte-Brun, Universal Geography, vol. 2 (Boston: S. Walker, 1834).
19.Andrew Crichton and Henry Wheaton, Scandinavia, Ancient and Modern, Being a History of Denmark, Sweden and Norway, vol. 2 (Edinburgh: Oliver & Boyd, 1838), 341.
20.Jan Delhy and Kenneth Newton, “Predicting Cross-National Levels of Social Trust: Global Patterns or Nordic Exceptionalism?,” European Sociological Review 21 (2005): 311–27; Niclas Berggren, Mikael Elinder, and Henrik Jordahl, “Trust and Growth: A Shaky Relationship,” Empirical Economics 35 (2008): 251–74.
21.Delhy and Newton, 311.
22.In a paper Daniel Arnold looks at the link between benefit morale and the generosity of sick pay entitlements. Benefit morale is measured through the World Value Survey, a global attitude study where respondents are asked if they believe it can sometimes be justified to claim government benefits to which they are not entitled. By examining thirty-one different developed economies between 1981 and 2010, Arnold can show that countries with high benefit morale have fewer using the sick leave, indicating that overutilization is directly affected by morale. Daniel Arnold, “Benefit Morale and Cross-Country Diversity in Sick Pay Entitlement,” Kyklos 66 (2013): 27–45.
23.See Eric M. Uslaner, “Where You Stand Depends upon Where Your Grandparents Sat: The Inheritability of Generalized Trust,” Public Opinion Quarterly 72, no. 4 (2008): 725–40; Tino Sanandaji, “Proving Bo Rothstein Wrong: Why Do Swedes Trust More? Culture, Not Welfare State Policy,” blog of Tino Sanandaji, October 2, 2010, http://www.tino.us/2010/10/proving-bo-rothstein-wrong-why-do-swedes-trust-more-culture-not-welfare-state-policy/.
24.Andreas Bergh and Christian Bjørnskov, “Historical Trust Levels Predict the Current Size of the Welfare State,” Kyklos 64, no. 1 (February 2011): 1.
CHAPTER 4: COMPARING APPLES TO APPLES
1.H. Arnold Barton, “Swedes and Swedish Americans, 1870–1940,” in Immigrants in American History: Arrival, Adaptation, and Integration, vol. 1, Elliott Robert Barkan, ed. (Santa Barbara: ABC-CLIO. 2013), 631.
2.Eric Dregni, Vikings in the Attic: In Search of Nordic America (Minneapolis: University of Minnesota Press, 2011), 174.
3.Rebecca J. Mead, Swedes in Michigan (East Lansing: Michigan State University Press, 2012).
4.David Macaray, “The Man Who Saved a Billion Lives,” WorldPost, October 15, 2013, http://www.huffingtonpost.com/david-macaray/the-man-who-saved-a-billi_b_4099523.html.
5.According to the American Community Survey (ACS) of 2013, there are 4.5 million Norwegian Americans; 4 million Swedish Americans; 1.3 million Danish Americans; 640,000 Finnish Americans; and 580,000 Scandinavian Americans. United States Census Bureau, American Community Survey, “Selected Population Profile in the United States,” based on 2013 data.
6.OECD Stat Extract. Level of GDP per Capita and Productivity. Data gathered January 13, 2016.
7.One study compares Norwegians who migrated to the United States from urban areas with those who stayed in Norway. It finds that the Norwegians who sailed to America tended to face poorer economic conditions than those who stayed behind. See Ran Abramitzky, Leah Platt Boustan, and Katherine Eriksson, “Europe’s Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration,” American Economic Review 102, no. 5 (2012): 1832–56.
8.The American Community Survey gives data for the share of those twenty-five or older who are high school graduates or have a higher education. This is compared with data from Eurostat for twenty-five-to-seventy-four-year olds who have the equivalent education level. Eurostat database (http://ec.europa.eu/eurostat/data/database), Population by Educational Attainment Level, Sex and Age (%), data gathered January 13, 2016.
9.These calculations are based on the estimation that the income levels of Nordic American subgroups correspond to their contribution to United States GDP.
10.The American Community Survey gives data for the share of those sixteen or older who are unemployed. The corresponding OECD data also includes fifteen-year-olds.
11.OECD Stat Extract. Short-Term Labor Market Statistics. Unemployment Rates by Age and Gender, %. All people. Data gathered January 13, 2016.
12.Geranda Notten and Chris de Neubourg, “Monitoring Absolute and Relative Poverty: ‘Not Enough’ Is Not the Same as ‘Much Less,’” Review of Income and Wealth 57, NO. 2 (2011): 247–69. Norway was not included in the study, since it is not a European Union member state.
13.In part this may be because immigrants to Nordic countries have relatively high poverty rates.
14.Joel Kotkin, “Is Obama Separating from His Scandinavian Muse?” New Geography, December 11, 2009, http://www.newgeography.com/content/001260-our-president-accolades-abroad-tone-deaf-home.
CHAPTER 5: HOW CAN THE NORDICS TAX SO MUCH?
1.Henrik Jacobsen Kleven, “How Can Scandinavians Tax So Much?” Journal of Economic Perspectives 28, no. 4 (Fall 2014): 77–98. Lately the Nordic tax rates have been reduced somewhat.
2.Mathias
Trabandt and Harald Uhlig, “How Far Are We from the Slippery Slope? The Laffer Curve Revisited” (working paper, European Central Bank Working Paper Series no 1174, 2010), https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1174.pdf?344d6e77a58718332bd900b10e4d85b2. Norway is not included in the analysis since it is not part of the European Union. Iceland is not included either, since it is a small country.
3.See, for example, Bertil Holmlund and Martin Söderström, “Estimating Income Responses to Tax Changes: A Dynamic Panel Data Approach” (IZA Discussion Paper Series, no. 3088, 2007, http://ftp.iza.org/dp3088.pdf).
4.That is to say, the economy shrinks with three kronor, while one krona is transferred from the private to the public sector. Åsa Hansson, “Vad Kostar Beskattning – Analys av den Samhällsekonomiska Kostnaden av Beskattning,” Confederation of Swedish Enterprise, September 4, 2009.
5.We can do the calculation ourselves. Out of 132 kronor, 32 are paid in payroll tax, leaving 100 kronor. Then 32 + 25 = 57 percent are paid in municipal and state taxes, leaving 43 kronor. Then 21 / 121 = 17 percent of 43 kronor, which equals 7 kronor, is paid in consumption tax, leaving 36 kronor. In total, 96 kronor is paid to the tax agency, which is 73 percent of the original sum of 132 kronor.
6.Jukka Pirttilä and Hakkan Selin, “Skattepolitik och sysselsättning: Hur väl fungerar det svenska systemet?” (appendix 12), in Långtidsutredningen 2011 (2011).
7.Peter Ericson and Lennart Flood, “Höjda Eller Sänkta Marginalskatter för Mer Resurser Till Skolan?” (Raising or Lowering Marginal Taxes for More Resources to School?) Confederation of Swedish Enterprise, April 16, 2014, http://www.svensktnaringsliv.se/material/rapporter/hojda-eller-sankta-marginalskatter-for-mer-resurser-till-skolan_585927.html.
8.See, for example, Mads Lundby Hansen, “Det Private Forbrug Pr. Inbygger Ligger Nr. 14 i OECD – En Nedgang fra en 6. Plads 1970,” CEPOS, December 5, 2012, http://www.altinget.dk/misc/Notat_Det%20private%20forbrug%20pr.%20indbygger%20ligger%20nr.%2014%20i%20OECD%20-%20en%20nedgang%20fra%20en%206%20plads%20i%201970_dec12.pdf.