Scandinavia’s Real Lessons

During this presidential campaign season, Scandinavia’s democratic socialism has had something of a starring role in Democratic discussions. In the debate on October 13, U.S. presidential candidate Bernie Sanders extolled the virtues of Europe’s north: “We should look to countries like Denmark, like Sweden and Norway,” he argued, “and learn from what they have accomplished for their working people.” Sanders’ paean elicited a flat rebuke from Hillary Clinton: “We are not Denmark.” In truth, there are many things that the United States can learn from Scandinavia, but not what Sanders implies.

Scandinavian countries call themselves foregangslande, or pioneers, and they have much to show in terms of forward-looking and innovative policy. Most everyone is familiar with the progressive ideas—from gender equality, universal health care, and energy sustainability—that have turned the region into a model for Bernie Sanderses everywhere.

However, in recent years, Europe’s north has also been home to more controversial practices—namely, restrictive immigration measures and austerity policies. They have also been rocked by the rise of radical populism. Because of their wealth and relatively small size, countries in northern Europe have had to face economic and social issues before some of the other Western countries. And the results reveal that it is best to be careful what you wish for.

For the better part of the past century, Nordic countries seemed to provide a third way between East and West. At the height of the Cold War, this positioning was understood in diplomatic terms; some of the countries remained neutral. But before then and again more recently, it was a social-economic label. The region seemed to mix free markets and universal social protection better than anyone else.

Of the many books published on the subject, Sweden: The Middle Way, by the U.S. journalist Marquis Childs, most vividly captured the tradeoff. Published in 1936 in the aftermath of the Great Depression, this small book became an unlikely blockbuster. It was one of the first instances in which the idea of Scandinavian politics as a solution to the United States’ woes became popular. U.S. President Franklin D. Roosevelt was even known to have looked to it for ideas for reform. In particular, the book chronicled with admiration the experience of cooperative movements in Sweden and the extent to which government’s intervention in the economy coexisted with private sector initiative—“both of them making money,” as Roosevelt commented.

In the aftermath of the 2008 recession, policymakers and observers have understandably been tempted to draw back on the Scandinavian model for inspiration. But in the intervening years, the Nordic socioeconomic experience has changed beyond anything Childs could recognize. What made Scandinavia distinctive then was the state’s deep reach into the market; in recent years, it has retreated. Experiments such as the voucher system have introduced private choice in key public sectors such as health care and education. In Sweden, public spending as a percentage of the GDP has shrunk by a quarter over the past two decades. Bookshelves have filled with titles such as From Social State to Minimal State, a treatise by Anders Fogh Rasmussen, later to become Danish prime minister, in which he advocated an increase in private initiative. In his view, “the free market determines the size of the rewards.”

Not coincidentally, “getting to Denmark” is used as shorthand for states’ modernization and good governance.

In time, Scandinavians’ self-perceptions have changed. Globalization and delocalization have challenged the competitiveness of some of the region’s industrial champions. Inflows of migrants have made Nordic cultures more diverse. Over time, the Scandinavians have slowly crept away from traditional social democratic tenets toward more pragmatic and yet conservative positions. Even conservative icons such as Joseph Schumpeter and Ayn Rand have become increasingly popular at these latitudes. 

If Europe’s north still represents a middle way, it is not between free market capitalism and socialism. It is between two radically different visions of democratic politics. On the one hand, Europe’s north pioneered the kind of efficient and impartial technocracy that has been emulated elsewhere, most notably in the European Union. The region is a paragon of bureaucratic autonomy (defined as the extent to which the civil service is uncorrupt and operates without interference from political power). Not coincidentally, “getting to Denmark” is used metaphorically by scholars such as Francis Fukuyama and the World Bank before him as shorthand for states’ modernization and good governance.

Yet technocracy presupposes a limitation of, or at least an adjustment to, democratic politics. And this is the other part of the new Scandinavian middle way. Nordic democracies are deeply rooted in civic practices based on consensus, compromise, and community participation. The Swedish social democratic ethos is historically referred to as folkehemmet, the “home of the people.” However, especially when coordinated in European and other international forums, technocracy is increasingly seen as being unaccountable to the people and as reducing the scope of popular choice. 

The rise of populist movements across all of Scandinavia is partly a response to this state of affairs. Although the movements’ roots and platforms are somewhat different, they have all made their name by positioning themselves as antiestablishment. Before the crisis, they proved their mettle by attacking multiculturalism and defending so-called traditional values. After it, they have presented themselves as defenders of the welfare state, which had been the preserve of mainstream parties.

What Scandinavia has to offer the United States is more than a utopian vision of universal health care; it offers lessons about the future of liberal democracy.

The case of Denmark is instructive. In general elections last summer, the Danish People’s Party shocked public opinion at home and abroad by gaining almost a quarter of the popular vote; it now provides support to a minority government. A one-time fringe movement, the party, which is anti-immigration, anti-EU, and pro-welfare, now sits squarely at the center of political debate. Its biggest success has been to turn its signature stances on issues such as immigration into the gold standard by which the other political parties are measured.

What Scandinavia has to offer the United States is more than a utopian vision of universal health care; it offers lessons about the future of liberal democracy. Scandinavia has accumulated valuable experience trying to reconcile technocracy and populism, a balance that can quickly deteriorate when it is not founded on a watertight social contract between the citizens and the state. The upheavals and wide divergence among Scandinavian countries in their responses to Europe’s ongoing refugee crisis testify to the risk. Indeed, Scandinavia’s best lesson for others is that, in the future, state success will rest on finding a middle way between the forces that pull liberal democracy in opposite directions.