Wednesday, March 30, 2016

Article review: "What Americans don't understand about Nordic countries"

I'm curious why the author left Finland and became a US citizen. He must have felt the US was a better deal in some respect, but exactly what is not made evident. Why would the author give up so many "free services" paid (paid + free in the same context is weird, isn't it?) for by taxes in exchange for what's available in the US, which is implied to be inferior?

Are the Nordic countries (Denmark, Finland, Sweden, Norway and Iceland) succeeding because of their welfare systems, or succeeding despite them? The article seems to just take it for granted that these countries are succeeding because of these systems and policies.

As mentioned in the article, these countries are actually very favorable to businesses. In fact, for most metrics, they are even more favorable than in the United States. Regarding corporate taxes, investment, property and other metrics, all of the countries except Iceland consistently rank higher than the United States.

Despite being more favorable to businesses, these countries are not especially very prosperous. Denmark, for example, if it were one of the states, would rank about 10th among the poorest states for per capita GDP. Finland would be approximately 5th, and Sweden 7th. It also is the case that the peoples of DFSNI have lower gross and disposable incomes. They earn less money before and after taxes. These countries also rank higher in terms of suicide rates as well, compared to the US.

Then there are countries like Switzerland, which is just on the south side of Germany. Denmark sits on the north side. Yet, Switzerland ranks higher on the economic freedom index than the US and all of DFSNI. It also has fewer people below the poverty line than the US and DFSNI. Why isn't Switzerland being held up as an example? Perhaps because smaller government doesn't generally serve the self-interests of politicians?

From the article: "In fact, as capitalist economies the Nordic countries have proven that capitalism works better when it’s accompanied by smart, universal social policies that are in everyone’s self-interest."

The key phrase "works better" is not really hashed out or defined, so I am left wondering: for whom and compared to what? Is the author claiming that higher taxes are better for society and that higher taxes can reduce poverty? The Nordic welfare systems weren't really established until the 1980's. Less than 40 years and already the verdict is ready? What did these countries look like before the 1980's? They grew rapidly and became very rich. Then government expanded, and their growth slowed.

We don't know what the countries would otherwise look like if they hadn't expanded their governments, but the implication is that various things would be be worse rather than improved. Why is that assumed?