The Nordic countries have long been recognised for their dedication to social welfare, gender equality, and wealth distribution. Though by no means a perfect system, the Nordic economic model has become something of a benchmark for highly developed societies, praised by progressive politicians and economists across the world. Bernie Sanders, the popular Democratic underdog of the 2016 US election, is a notable proponent of the model. So what is the Nordic model, and does it actually work?
Known also as Nordic capitalism or Nordic social democracy, the model describes a set of economic and social policies common to the countries of Denmark, Finland, Iceland, Norway, and Sweden. These policies combine aspects of free market capitalism with a powerful welfare state and strong trade unions, aimed at promoting social mobility and individual autonomy, while maintaining a commitment to the free market and private ownership.
The political component of this model is the concept of social democracy, which broadly aims to acheive economic equality through the capitalist system, rather than by replacing capitalism. Social democracy is often mistakenly conflated with socialism, which rejects the free market.
The Nordic model is often credited, at least in part, with the high standards of living and happiness in the Nordic countries. The Nordics have consistently ranked highest on GDP per capita, healthy life expectancy, perceived freedom to make life choices, generosity and freedom from corruption.
This might suggest that the Nordic model works in principle, though of course there are a multiplicity of other factors at play. The strength of the Swedish economy, for example, was much influenced by their neutral status in the Second World War, while all around them other European nations were shattered by conflict. Norway has benefitted greatly from valuable oil reserves, and Finland from their telecommunications industry. But it is the Nordic model, and a shared sense of social and economic fairness, that has been a constant throughout the last 60 years of Nordic history.