Do the Nordic countries offer a model for Scotland ?

The run-up to the independence referendum has seen many on the left in Scotland look to the “Nordics” as an example of “fairer” capitalism that an independent Scotland should model itself on. Ronnie Stevenson looks at whether these arguments stand up to scrutiny and puts the alternative case for a socialist Scotland.

The coming independence referendum has opened up a debate about what type of Scotland we need. “The Common Weal – a model for economic and social development in Scotland” is a discussion paper by the Jimmy Reid Foundation. The authors, a range of left academics, describe it as “a starting-point” of an idea on how Scotland could be transformed.” It can be found at http://reidfoundation.org

They seek to pose an alternative to the idea that markets should drive economic and social development. As such it is to be welcomed as it breaks with mantra that austerity, neo-liberalism and privatisation is the way forward. They introduce the idea of ‘The Common Weal’ (well-being for all), as the Scottish version of the type of society which has been achieved in the “Nordic’ area.

The authors of this document base their analysis on the Nordic countries, Norway, Denmark, Sweden, Finland etc where they claim that wealth inequality is low and social cohesion high.

Pay is higher, poverty is very low there is a strong welfare state and well funded public services. As well as a more balanced economy with less emphasis on finance and more on product innovation.

Society is generally more inclusive with better gender and other equality in politics, on boards of governance, in leadership positions etc.

The paper argues for Scottish society to change through taking a larger share of GDP in tax (by inference including a higher tax take from workers) and the creation of a welfare state where public services and cash benefits are part of one seamless system delivered on universalist principles of from the cradle to the grave.

They promote several changes to achieve them. They argue for a higher minimum wage and an economy less dependent on low paid jobs. Because of the failure of the finance industry they argue for a national investment bank run on mutual principles to provide the finance to mutual’s and cooperatives to transform our industrial base.

They challenge the banks to stop being profit driven and provide secure private banking for individuals.

Greater involvements of citizens in the democratic control of business, government and localities is a cornerstone of their argument for more collectivism.

The weakness in the approach of the Common Weal is the lack of recognition that the majority of capitalist interests will oppose such measures. They seem to want to ignore the way in which the majority of economic activity is dominated by a few transnationals and they will resist like fury any of these ideas.

reformed capitalism

By proposing a reformed capitalism, the Common Weal tackles the symptoms of the disease, but do not propose a viable cure.

Unfortunately the promotion of the “Nordic’ capitalist model as an alternative to austerity flies in the face of the actual situation in the ‘Nordic’ countries. In reality the Nordics are implementing the austerity model little different from the economic programmes which has been adopted by most of the developed countries. Youth unemployment is over 20% in most of the Nordic countries.

Recently The Economist commented ‘Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%. This year it is cutting the corporate-tax rate from 26.3% to 22%. (You can find an inportant socialist analysis of the collpase of the Swedish “model” at: http://www.socialistworld.net/doc/6330 )

The onset of the world economic crisis in 2007 is undermining many of the social gains made by the working class in the Nordics.

The problem with ‘The Common Weal’ is it ignores the reality that from the point of view of the rich and powerful in society the current crisis in capitalism can only be “resolved” by attacking what has been won in the past.

Many of the aspirations of ‘The Common Weal’ will be welcomed. But those who run society, the capitalist elite and the main political parties who represent them – will resist such solutions tooth and nail.

Only by mobilising the mass of the people in a struggle to end austerity and to fight for a new society, socialism, could such aspirations be achieved.

Nationalisation and common ownership of the major elements of the economy, the banks, finance, industry, oil, gas etc run under the democratic control of the working class is needed to end poverty, inequality and division.

The struggle for “The Common Weal” – well-being for all – is a struggle against decaying capitalism that regards austerity and further attacks on the mass of people as the only way forward. It’s a struggle to overthrow the old parasitic capitalist system and a replace it with a democratic socialist society both here in Scotland and across the world.