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The New York Times
OP-ED COlumnist
The Nordic Option
By ROGER COHEN,
nytimes.com on the Web, September 17, 2007
Stockholm -- Think Sweden and
what comes to mind is probably not a youthful finance minister, with his long
dark hair in a ponytail and a gold ring through his left ear, explaining that
his ambition is to make it “more profitable to work” than to sit around on
welfare.
But Anders Borg, 39, poster boy of the “New Moderates” who have put the
long-governing Social Democrats out of office, does just that, and when the
question of his coiffure comes up, the retort is swift: “This is northern
Europe, a modern society. Your public deficit or surplus is more important
than your hairstyle.”
Right. Sweden, of course, has a surplus that the deficit-ridden United
States can only envy, as well as a knack for staying out of wars that borders on
the obscene. It’s that reasonable, semi-socialist, Volvo-driving,
super-taxed Nordic place that gave the world Ikea’s cheap furniture and
Bergman’s dissection of marriage.
Or is it? The ponytailed finance minister — a world first? — is just one
sign that something funky is up in the Swedish woods. A government that
includes the country’s first black, avowedly gay and bisexual ministers (that’s
three distinct people) has set about a radical reform of the generous welfare
state that defined the Swedish condition.
In doing so, it has adopted a few core principles. It should be more
profitable to work than not to work. Welfare should mean caring for people
who cannot care for themselves. Unemployment insurance should be
adjustment insurance rather than an open-ended sinecure. Employers should
be encouraged to hire through lower taxes.
Hardly rocket science, you might say, but all of this has proved radical enough
to make “systemskifte,” or “system shift,” the buzzword in Sweden. The
term might be applied to much of northern Europe, where in recent years the
welfare state has been upended even as its essence has been preserved.
Europe, at peace and undivided, has not been foremost on the American mind of
late. Old images of “Eurosclerosis” — the vacationing worker (or
non-worker) stripped of initiative by an overbearing nanny state — have tended
to endure. But in countries including Britain, the Netherlands, Denmark
and to some degree Germany, welfare has ceded to what Borg calls “work-fair.”
The transformation has brought streamlined state sectors; more flexible labor
markets; a focus on social fairness through improved education and health care
rather than through attempts at income redistribution via high taxes; a restored
work ethic (“Make Work Pay” is a Swedish government slogan); and a rediscovery
of entrepreneurship and choice.
“Our principle is you should show solidarity with people who have problems for a
space in their lives, but they should not be supported permanently by the
welfare state,” Tobias Billstrom, the migration minister, says.
Billstrom is all of 33 and sports multicolored buttons on his shirt. He’s
a backer of the reforms because Sweden doesn’t want the immigrants pouring into
the country to think collecting subsidies and working on the black market are
the Swedish way.
Sweden has learned that a rigid labor market is a devastating form of exclusion
(France, take note). Its aging population, like others in Europe, needs
immigrants to find jobs and so pay the taxes that will fund pensions into the
future.
By slashing unemployment benefits, making it easier and cheaper to hire,
offering tax credits to employers taking on people who have been jobless for a
long time, and providing tax incentives to lure domestic jobs out the black
market, Sweden has cut unemployment to 4.4 percent, or about half the French
rate.
Growth in 2007 of 3.2 percent will be among the highest in Europe and handily
top the U.S rate. Surpluses keep accumulating. All nine million
Swedes have health insurance, while 47 million Americans, or the equivalent of
five Swedens, do not. And the school system delivers high standards.
Of course, Sweden doesn’t have the world to run, and a top personal income tax
rate of 56 percent would make Americans pale. Still, Sweden’s new Nordic
model merits attention.
“My idea,” Borg says, “is to combine the entrepreneurial spirit of America with
the welfare of Sweden. That’s my ideal world: the creative impulse
and restructured welfare. The lowest quarter of our population is well
educated. The United States could learn from that.”
It could indeed. Northern Europe has looked to America for some of its
reforms. America, Iraq-obsessed, has not looked to a changing Europe.
A stagnating middle class, losing jobs and health insurance, holds the key to
victory for Democratic candidates next year if they can suggest strong programs
for better education and universal health care.
A stop in funky Stockholm is in order for Hillary Clinton, John Edwards and
Barack Obama.
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