The Political Economist

This week's edition of the Economist has a special report on the Nordic economic model . The image of Nordic countries has too often been one of high spending, big size of government, a huge welfare system, basically a social-democrat paradise. But are their policies all that social, or are they much more pro-market than people are prepared to believe?  Their model has changed from promoting an equal society to promoting both an equal and dynamic society, where competition strives and market forces are abundant (as opposed to some Anglo-Saxon nations which carried this distinction in the past, but not anymore). This is a great message to Europe which doesn't have to look too far to find a model that comprises both a competitive economy and high levels of social mobility.  This is their main lesson: "The main lesson to learn from the Nordics is not ideological but practical. The state is popular not because it is big but because it works. A Swede pays tax more w...

The final chapter of the cross-country coverage of successful (and not so successful) recoveries ends this month with Sweden, the star of the recovery.  Sweden is often hailed by Keynesists and many alike as a "poster child" of a welfare state that succeeds in creating an equal society while maintaining macroeconomic stability. It  is very often promoted as the model upon which the US and the UK should organize their economies.   But Sweden today is far from it. It has moved from a focus on equality to a focus on dynamic growth. I t is  persistently  ranked among the   most free nations   in the world (along with other Scandinavian countries).  Particularly in the last 20 years, Sweden became the perfect example of a state with high levels of individual and economic freedom.  It has an institutional system which clearly defines rules in a society but which doesn't discourage innovation or incentives to work and create valu...