In >The Nordic Model: Embracing Globalization and Sharing Risks the authors describe the Nordic Model:
There is indeed a social and economic system that can usefully be referred to as the Nordic model. Obviously, there are important differences between the economies and policies of the Nordic countries. (The Nordic group is in our case limited to Finland, Denmark and Sweden, as Norway and Iceland would deserve special treatment due to their non-membership of the EU and their high reliance on oil and fishing respectively.) Yet, it is the similarities that are more striking, some of the principal features
being the following:
· a comprehensive welfare state with an emphasis on transfers to households and publicly provided social services financed by taxes, which are high notably for wage income and consumption;
· a lot of public and/or private spending on investment in human capital, including child care and education as well
as research and development (R&D); and
· a set of labour market institutions that include strong labour unions and employer associations, significant elements of wage coordination, relatively generous unemployment benefits and a prominent role for active labour
Kwaisi’s Nordic Model
Reforming the unchecked capitalism that has created income inequality and dramatic differences in the quality of life between the rich and the poor is an ideal that both parties supposedly now embrace. Winner-take-all capitalism has indeed resulted in poverty, a lack of affordable quality health care, education, a deteriorating social safety net, a lack of retirement security, massive scandals in the financial markets and tremendous income disparity. Public services, such as education and government run programs in America are of poor quality and the rich have access to far better resources than the poor. Here’s what I would do.
President France, advised by James E. McWhinney, convinces Congress to pass laws declaring public provision of social services meaning free education, free healthcare, guaranteed pension payments for retirees, childcare and other services associated with human capital. Strong labor force protections through unions and through the social safety net are established. These benefits are funded by taxpayers and administered by the government.
Simultaneously, laws are also passed making it easy for companies to shed workers and implement transformative business models. This means the end of employment law as we know it concerning discrimination. Employees are supported by generous social welfare programs. The nation’s tax structure is based on individual rather than household income, coupled with a flat-tax. The result is a system that treats all citizens equally and encourages workforce participation. Gender equality is a hallmark trait of the culture that not only results in a high degree of workplace participation by women but also a high level of parental engagement by men.
For this to work, workforce participation must be robust so we create incentives for citizens to work despite having generous welfare benefits. This will reduce the gap between the rich and the poor through redistributive taxation and a hearty public sector while preserving the benefits of capitalism.
This assumes, and I believe rightfully so, that citizens are generally facing the same set of challenges. Solutions that benefit one member of the society are likely to benefit all members. The government would be led by citizens seeking to create programs that benefit everyone. Accordingly, citizens willingly chose to pay higher taxes in exchange for benefits that they and their family members will get to enjoy. The result is publicly funded services, such as healthcare and education, that are of such high quality that private enterprise has no reason to offer these services or room to improve them.
A large base of young taxpayers and a smaller population of older residents receiving services is the ideal scenario. As the population balance shifts the other way, benefit reductions are a likely outcome.
This will no doubt attracts immigrants seeking to enjoy the generous public benefits. A high degree of participation in the workforce must be part of the collective decision to support the amenities society offers. Immigrants do not always share this vision. However, native citizens will also take advantage of the generous benefits system and the impact of poor global economic conditions will have more of an effect than generous benefits in America.
There will be opposition. We’re talking about high taxes, a high degree of government intervention and relatively low gross domestic product and productivity. My system redistributes assets, limits the amount of money available for personal spending and consumption, and encourages reliance on government subsidized programs. Even beyond vitriolic political rhetoric, a lack of shared culture due to geographically and ethnically diverse populations that lack shared experiences will make it really tough here in the United States. Luckily, President France is a leader and believes the Nordic Model gives us the best of all worlds to appease everyone.