Can America Learn From Scandinavia?

Income inequality the United States is an incredibly important issue with a multitude of ramifications. Firstly, it brings into question the idea of the tradeoff between economic efficiency and economic security. In this country we have a belief system that values economic liberty (efficiency) over security. This can be seen as one of the main reasons why the gap has become so large and pervasive. An example of a contrasting belief system is that of Scandinavian countries. While they have around the same level of income as the United States, their income distribution is much more equitable than ours.

This brings into question why these systems are so different. For one, tax rates in Scandinavian countries are much more progressive. They also have far more robust social security programs than our country. It is interesting to note, however, that this system might not work in the United States. For example, it has been shown that the more homogenous the population the easier it is to implement social security programs. This is because it is easier for people to empathize with people that are similar to themselves. The reason why this is important is because while all countries are outsourcing work to cheaper providers, in these countries the effect is blunted due to their stronger safety nets. While it is not certain whether or not this model is sustainable, (as evidenced by the euro zone debt crisis) or desirable, it can be seen as an effective way of lowering income inequality in the United States.

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3 Responses to Can America Learn From Scandinavia?

  1. KCasty says:

    I spent last semester in Denmark, and it was truly amazing to hear how different their way of life is compared to ours in the States. It is true that the Scandinavian countries (Norway, Sweden, Denmark, Finland, Iceland, and the Faroe Islands) are extremely homogenous — one of my Danish professors even described the Danish people more like a tribe than a country. This homogeneity does make their unique systems MUCH more easy to implement than they would be in such a diverse melting pot as the United States. In Denmark, people are taxed 52% of their income, and all of their services are free (doctors, childcare, college, etc.). However, despite how nice this may sound, interestingly, I spoke with many Danish people (mostly college-aged students, but also professors) who hate the high taxes. It just goes to show that even if these systems have been working in Denmark, it does not mean that the Danish people necessary like them. For some reason, also, I feel like Americans would be entirely against this socialist way of life…

  2. Cander says:

    I agree, homogeneity helps, but I think the size of the country is important as well. You look at Scandanavia (or really any country in Europe) and the size of population versus. the U.S. and makes it even more difficult (and costly) to implement social programs.

  3. Jordi says:

    Well, can it learn? Your title and your body don’t quite jive. The US was closer to Scandinavia from 1930s-1980. Why did it change?

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