![]() Today, Nordic nations still have higher taxes and more generous welfare systems than most parts of the world. This share gradually increased to 40 percent in 2011, and it has since fallen to 36 percent following stricter control of welfare systems and public campaigns warning against overuse. For example, in the early 1980s, 19 percent of Swedes agreed that it could be justified to some degree for someone to claim public welfare when they weren’t eligible. More importantly, the norms relating to hard work and responsibility have started to erode, according to measurements by the World Value Survey, as welfare has increased. Over the past 50 years, for instance, Swedish GDP per capita has only grown by a factor of 2.1. And trust and social responsibility have historically been strong in this region, in part due to the need for collaboration in the unforgiving Nordic climate-stronger, indeed, than in the rest of Europe.Īs a result of the shift away from low-tax policies, however, economic growth stagnated. It wasn’t an unusual trajectory: Researchers have shown that countries with higher trust levels tend to have larger and more generous welfare systems. The public remained skeptical of direct tax raises, and the shift largely occurred through gradual rises in the indirect payroll tax. ![]() It was after this period of rapidly growing prosperity that there was a shift to high-tax policies. From around 1870 to 1970, for instance, Sweden’s per capita GDP increased around tenfold, the highest growth rate in all of Europe. In the century preceding that turn, Nordic countries had combined small public sectors and free markets to achieve strong economic growth. The Nordic welfare system that people like to point to as a flourishing example of socialism was developed around 1970, when there was a policy shift throughout Nordic societies toward higher taxes and generous public benefits. Today, the Nordic social democrats have adopted stricter immigration policies, tightened eligibility requirements for welfare benefit systems, taken a tougher stance on crime, and carried out business-friendly policies. During the past 30 years, however, both conservative and social democratic-led governments have moved toward the center. Nordic nations-and especially Sweden-did embrace socialism between around 19. Yet while Nordic countries are seeing a partial comeback for social democratic parties, their policies aren’t in fact socialist, but centrist. It’s true that social democratic parties are enjoying success in this part of the world. Nordic countries are often used internationally to prove that socialism works.
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