That explanation is, he suggests, to be found in the work of the Nobel prizewinning Swedish economist Gunnar Myrdal. Lakey’s argument is that Myrdal encouraged all these states to invest in the individual person as the primary resource for delivering economic growth. This idea, and the actions that result from it, is, he believes, the pillar of the Nordic economic model. At its core this idea, he observes, rejects the classical view of work – that it is a struggle to win the means of existence – and puts in its place a positive framework of incentives for economic participation.
The book explores this hypothesis in numerous ways, but at its heart a number of things stand out that, at a time when the economies of so many countries are so badly failing those who live in them, must be worthy of serious study.
The first is conceptual. As a result of these states having largely rejected the core assumptions of classical economics, profit is seen as a consequence of work and not as its goal. Banking is seen as a service and not as the focus of economic growth. Education is viewed as vital to personal growth, which just also happens to be the perfect countercyclical investment that secures long-term prosperity. And underpinning all this is an expectation that each person will work to contribute to the overall well-being of the society of which they are part: this is a perception of work as a participatory activity.
The result appears to be a Keynesian, social democratic nirvana where education, healthcare and pensions are free, the social safety net is still strong and cooperatives supply 40 per cent of housing in Norway.
Could actually be something a little different.
They’re all in the top 25 for the Index of Economic Freedom. They’re all in the top 30 of the Fraser economic freedom measurement. They’re all in the top 15 of the World Bank’s ease of doing business list. In fact, there’s a serious argument that leaving aside the tax and spend part they’re all significantly more free market than either the UK or US.
Another way to put this is that they’ve not rejected anything about classical economics at all. Quite the opposite. Let the market rip, tax it to provide some buffers against the effects. This is somewhere between neoliberalism and the Third Way that is.
Of course, you’re never going to get things right if you cannot analyse why certain places work, are you?