MSG Team's other articles

11645 The Two Conflicting Theories of Recession

The “R” word is back in town. Economists and analysts all over the world are now wary about the fact that a major recession may be just around the corner. They have different facts that make them believe that a recession may be about to happen. However, their conclusions are pretty much the same. For […]

11885 What is Project Risk ?

What is Risk ? Having the best people execute the plan does not guarantee success. There are a host of external factors which may play a role in determining the outcome regarding whether a project has been successful or not. These are called Project risks. The formal definition of a risk is an event or […]

10746 Process Design and Analysis

Introduction The objective of organization is to provide service and product, which satisfy customer and create value for them. A product and service designed is based on the customer feedback and requirement of the market. Process design is where the product is broken down into parts, which further can be helpful in the actual manufacturing […]

10562 P-Value in Hypothesis Test – Interpreting the Statistical Conclusion

What is the P-Value ? The P-Value is a statistical representation of the likelihood that the null hypothesis is true. Therefore the P-Value is the probability that the output (Y) will not change as a result of the variation that we are deliberately introducing in the input (X). Example: If we have a null hypothesis […]

9941 Should Infrastructure Spending Be Centralized?

Donald Trump has raised the issue of America’s crumbling infrastructure during his election campaign. He has periodically mentioned that American economy needs a bout of infrastructure spending. Estimates state that the infrastructure overhaul will cost the Trump government more than $1 trillion. However, the United States is already deeply in debt. Even though they have […]

Search with tags

  • No tags available.

The Vikings were some of the most brutal people that the world has ever seen. The nations that they built were carved out of violence. However, their descendants have turned out to be the most caring and civilized people on the planet. Today, the Scandinavian way of life is a role model for the rest of the world. Economists from far and wide go to countries like Denmark, Norway, Sweden, and Iceland to study their model.

The traditional belief has been that economies only do well when there is least government interference. This is popularly known as the “laissez-faire” economic policy. The Nordic countries seem to be an exception to this. These countries have a large amount of regulation and very high tax rates. Yet, the economy of these nations is thriving.

Also, it needs to be understood that the Nordic countries have not always been the way they currently are. These nations were also once dominated by the rich and powerful people. The situation was exactly like what it is now in the western nations. The economic elite were resisting any kind of change. In fact, the people of Norway are still very distrustful of large corporations. This is why it is mandatory for the government to have a certain number of members on the board of every major corporation in Norway.

The same challenges that are faced in America were also being faced there. However, the people of these nations struggled and finally were able to create the Scandinavian model which many consider as an “economic wonder”

Apples to Apples Comparison

The problem is that there are no “apples to apples” comparison of the American model with the Scandinavian model. The Americans are quick to note that the tax rate in Scandinavia is very high. However, they fail to take into account the fact that all these countries have free medical and educational systems. Hence, all the money that an average American spends for the health and education of their families should also be added to the tax rate to come up with the effective tax rate that Americans pay.

It must also be noted that a lot of Americans are spending their lives in debt. This is because of the medical debt. The cost of healthcare in America is one of the highest in the world. The insurance companies are quick the reject people that have any pre-existing conditions. Hence, if an individual does not have medical insurance, it is almost a foregone conclusion that medical debt will bankrupt them. However, this is not the case in Scandinavian countries where free healthcare is available for all citizens. Hence, even though the tax rate in Scandinavia may be very high, the facilities provided by the government justify the high tax rate.

Free College

The next big expense that Americans save for is college fee. If their children do not go to college, they are almost certain to end up working menial jobs at minimum wage. However, if the parents do not save enough money, the kids are likely to have student loans for their entire life.

Many young adults in America are living a life of indentured slavery thanks to college debt. However, this is not the case in Scandinavian countries. A college education is provided solely on the basis of merit.

The government pays the entire fee for the course for every citizen. Hence, the literacy rate is higher in these countries as compared to America.

Scandinavians tend to lead better lives. Very few of them work menial jobs that provide a minimum wage.

Also, Scandinavian countries do not have a wealth inequality problem. Since opportunities are not skewed by how much money one’s parents have accumulated, wealth distribution happens fairly.

One of the benefits of low inequality is that the crime rate is abysmally low. Hence, the state does not have to spend huge sums of money on maintaining law and order in the society.

The Problems America Will Face If It Embraces Viking Economics

Many American economists are skeptical as to whether the Scandinavian way of life will work in America. Some of their major criticisms are as follows.

The problem of Size: The Scandinavian economies are small in size. Hence they can sustain their welfare state policies. These policies have never been implemented in a country with the scale of the population of America.

Immigration: Secondly welfare policies work when there is less or no immigration. Scandinavian countries do not routinely get residents from other nations who try to live there illegally.

America is prone to illegal immigration. If the welfare state policies are implemented, the illegal immigration will rise by leaps and bounds.

It is impossible for America to have Scandinavia like policies and yet have open borders. America will end up attracting too many freeloaders who will not contribute anything in the form of taxes but will obtain all the benefits.

To sum it up, Viking economics has become a proven economic model in the Scandinavian region. However, its applicability to other larger and immigration prone nations is yet to be seen.

It is likely that America may adopt some of their policies shortly since major American politicians like Bernie Sanders are highly influenced by them.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles