January 04, 2007


Caption: This rooster, known as Stewpot to his friends, enjoys a strong safety net.

For years, we've been fed on the poisoned propaganda that the price of a growing economy is a shredded safety net, growing inequality, and economic insecurity for millions of working families.

The problem with all that is that it just isn't true. In a recent essay in Scientific American, Columbia economist Jeffrey Sachs, author of The End of Poverty: Economic Possibilities of our Time, compares the economic performance of developed countries with low taxes and weak safety nets with that of Nordic social democracies, including Denmark, Finland, Norway and Sweden. He notes that the latter countries combine "a healthy respect for market forces with a strong commitment to antipoverty programs."

The results:

On average, the Nordic countries outperform the Anglo-Saxon ones on most measures of economic performance. Poverty rates are much lower there, and national income per working-age population is on average higher. Unemployment rates are roughly the same in both groups, just slightly higher in the Nordic countries. The budget situation is stronger in the Nordic group, with larger surpluses as a share of GDP.
Key ingredients in the Nordic formula for prosperity and competitiveness are universal health care and child care, access to education and job training, and supports for the elderly and people with disabilities. Sachs notes that the U.S. pays less than almost all developed nations on services for poor and vulnerable people "and it gets what it pays for." He also draws attention to the fact that health care in the U.S. is "a ramshackle system that yields mediocre results at very high costs."
His conclusion is pretty simple:
In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness.

1 comment:

mwildfire said...

I would point out that the Nordic countries aren't burdened by the heavy expenses of empire. The US spends as much on the military as the rest of the world combined--so we don't have as much available for helping people.
I would also point out that all this is very clearly just as true for developing countries. The Washington Consensus has slowed the economic growth of the countries that followed it. The ones that refused, that invested money in things like education and basic health care, are the ones that have pulled into developed-country status.