December 13th, 2012
01:33 AM ET

Should America try to be like Scandinavia?

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By Global Public Square

Here at GPS we often report how the United States has fallen behind in a number of global rankings. For example, The Economist has just published what it calls the "Where to be born" index: a list of countries which provide the best opportunities and the highest quality of life. In 1988, America was #1; now it is joint 16th. Three of the top five countries today are in Scandinavia: Norway, Sweden, and Denmark.

Or look at the World Economic Forum's Global Competitiveness Index. The U.S. has fallen to #7 in the latest rankings. Finland and Sweden are in the top five.

Or look at corruption. The United States ranks 19th in Transparency International's new index. Denmark and Finland are rated the cleanest countries.

Now you can spot two trends. On the one hand, America has been losing its edge. But I'm also struck by the rise of Scandinavia, a region that includes Denmark, Norway, Sweden, and if you broaden that definition, Finland and Iceland. Each of these countries seem to dominate global ranking lists. Why? What is their secret sauce?

Well, Scandinavia is actually much more free market-oriented than most people realize. Capital is allocated by the market, the government doesn't own companies, regulation is usually light, corruption is non-existent. Companies can hire and fire easily, labor moves around. But these countries do tax a lot and spend a lot – on education, childcare, health and other things.

Now,  a recent MIT paper suggests there are limits to this model. It's called "Can't we all be more like Scandinavians?" In brief, it points out how the Scandinavian welfare system provides a number of benefits: more vacations, better healthcare, more equality. But when it comes to innovation, the U.S. still wins. For example, if you look at patents filed per million residents, the study shows the U.S. has moved far ahead of Scandinavian countries.

Here's why this is important. Unlike say, a healthcare system (which only benefits people of one particular country), innovation has global impacts. New American inventions spread around the world. According to the paper's authors, Scandinavian countries "free-ride" on U.S. research and development. But if the U.S. became Scandinavian, it would spend less on innovation, which might reduce global growth rates (and thus, discredit the Scandinavian model).

The paper has been criticized for using patents as the marker for innovation. But even so, this is an important discussion. And it ties in to many of the questions our leaders are grappling with. Does the state need to make societies more equal? Does that come at a cost?

There is much to admire about Scandinavia: on education, on healthcare, on energy. But that doesn't mean we need to become Scandinavian. We are more individualistic, free-wheeling, ready to take risks. Americans don’t need to stop being American. But why not look at how these countries in Scandinavia make investments in healthcare and early education and how all of these things create greater equality of opportunity. That is after all what helps people succeed, no matter where they come from or how poor they are.

The truth is, Scandinavian countries are fulfilling a huge part of the American dream better than America these days. Thankfully, we're still an innovation powerhouse, and we need to spend more on R&D rather than cutting those budgets. And perhaps we need to target some of that innovative thinking towards restoring the American Dream of equal opportunity. That would be a truly American solution to an American problem.

soundoff (586 Responses)
  1. Grmn

    Why do we even talk about whether the US should be more like Scandinavia? Shouldn't we rather be talking about what that US can do to be more like the US again.....

    December 14, 2012 at 6:07 am |
  2. thedarkelf

    I have been saying this for awhile,I wish we could use the methods Norway,and Scandinavia use. They are in great positions they people are treated with respect and they live well. The people have trust as well in their leaders.

    December 14, 2012 at 6:08 am |
  3. VVVVV

    Genetics & less bureaucrats. That's what makes Scandinavia what it is.

    December 14, 2012 at 6:54 am |
  4. Scott

    It would be interesting to see an analysis of immigrant populations shifts in Scandinavia & the US since 1988...wonder if those shifts might be affecting current quality of life for citizens?

    December 14, 2012 at 7:30 am |
  5. bigtex342006

    Comparing countries with a population of around 5 million people, mostly ethnically the same, to the United States, a country of 315 million people that has been the destination for the rest of the world over the last 200 years is laughable...

    December 14, 2012 at 7:31 am |
  6. American

    The USA should be like the USA and no one else. We are unto ourselves and we do not need anyone else to be who we are. For without the USA the rest of the world is nothing, so if anything other countries should be like us!!!

    December 14, 2012 at 7:43 am |
  7. Peter S.

    I feel like I've read this article somewhere else...

    December 14, 2012 at 7:57 am |
  8. Bob

    Ok, so we lead in patents but how many of those are actually useful patents and not a bunch of previously invented stuff wielded together?

    December 14, 2012 at 8:00 am |
  9. T-bird

    I would rather have healthcare than patents. Bottom line, we could learn a lot from the Scandinavians, but it doesn't mean we have to lose our creativity. The problem would be getting rid of the greediness of large companies. I'd pay more in taxes if it meant I could actually go to a doctor or hospital & not worry about paying through the nose to please a bunch of shareholders. I can't afford insurance now, am too "rich" for Medicaid & too young for Medicare. It's a huge gap to fall into, though I don't know if paying a tax for not having insurance will get me insurance either. I know that if I have to pay a tax for no insurance (& am not getting anything for that money), I won't be better able to afford to buy insurance.

    December 14, 2012 at 8:15 am |
  10. lanse

    you left out that scandinavians are basicly all white with few brown skin minoritys ! that woundnt be a reason their so sucessful now would it . no way !

    December 14, 2012 at 8:28 am |
  11. Chedar

    The US university is rank as the best in the world in addition to innovation. What needs to in innovation is to capitalize what come out of innovation. But recent economic downturn completely stop funding the innovated product to fruition.

    December 14, 2012 at 8:37 am |
  12. Pandora Doggle

    I think we should take a cue from the #1 country there: highly federated, non-interfering Switzerland.

    December 14, 2012 at 8:41 am |
  13. Hate Wins

    I would bet that only one language spoken in class rooms in Sweden, Norway and other Scandinavia countries. One post stated they Norway required that you learn to speak Norwegian. There is a push to allow citizenship with out being able to speak English in this country. Voting ballots are being printed in two or more languages. Is this happening in Scandinavia?
    What kind of system would they have if they copied California? This state is so Politically Correct (PC) that in some school systems English is the second language due to illegal immigration.
    Also in some cases you can not get a job making hamburgers unless you speak Spanish.
    I hope this type of P.C. will not infect Scandinavia. But it will if it has not already or your culture will suffer also.
    Diversity is one thing but letting PC ripe your country apart is something else.
    For most of our history we welcomed any and all to our shores. At that time they wanted to be Americans not Jordanians, Frenchmen, Russian, Chinese or Iranians now they want those of us who were born here to adhere to their culture and leave ours. This is happening in all of Europe also.
    The small population of Scandinavia is at risk if those who migrate there of having your culture over run.

    December 14, 2012 at 8:41 am |
  14. Mark

    Garbage. The reason why those countries succeed is because they
    aren't as diverse, aren't worried about making a melting pot work.
    They are strongly, predominately Finns, Danes, Swedes and Norwegians.
    So they're all on the same page, they think alike, understand each other
    more. They can trust their governments to work for them because of

    America is a jumble now. It used to be people came to this country to
    assimilate. Now they come and force their ways on everyone because
    they can get away with it in the country with the greatest personal
    freedom. Respect for diversity and political correctness has replaced
    being American as a priority.

    Innovation.... come on. Innovation could be at a standstill and it would
    have no effect on the problems of diversity this country has. That
    diversity has created political and economic extremism. You can't
    innovate your way out of that problem.

    December 14, 2012 at 8:53 am |
  15. Just for Fun

    About 5 years ago in Florida a bank branch office was shutdown when a V.P. of that bank went to preform an in house audit due to problems with transaction and summited paper work. The auditor found that only one person working at the branch spoke English was the branch manger. Most of the workers were not qualified to preform their jobs according to the report.
    The branch was located in Little Havana Miami, Fl.

    December 14, 2012 at 8:56 am |
  16. Jerry Lemieux

    Look at the population of all the Scandinavian countries combined. Any attempt at comparison is ridiculous based on sheer numbers.

    December 14, 2012 at 8:56 am |
  17. Pedro Gonzalez

    Scandinavian countries do not have the racial divisiveness, crime, drug abuse, and moral corruption we see here in most every aspect of society. We will never be like them.

    December 14, 2012 at 9:04 am |
  18. USN Ret.

    California has more people than all of Scandinavia combined and ten times the ethnic diversity. It is as liberal as Scandinavia and going broke due trying to support an illegal population that has not paid its fare share of taxes because must work as day labors, migrant farm workers and also send a large amount of their income back to their home country. Dose Scandinavia have this problem? I believe not from the post I read here.
    Trying to compare the U.S. with the Scandinavian country’s is like comparing Texas with Maine, California to Mississippi or New York with Montana it just dose not fit. Sorry unless you have had the opportunity to live in these states there is no way to explain it to you.
    Been there done that!!!!

    December 14, 2012 at 9:18 am |
  19. stoptheblame

    Those countries pay on average 65% in taxes. The government tells you what to do. They are recently being invaded by third world immigrants because of their generosity and starting to have some problems like the US. I know, my wife is from there and always warns me of the direction this country is starting to go.

    December 14, 2012 at 9:19 am |
  20. Hate Wins

    Two of my best friends are from Finland and according to them Finland has its share of drug abuse and moral corruption. Crime is less from what they tell me though. Remember smaller population smaller problem.

    December 14, 2012 at 9:23 am |
  21. Just for Fun

    Why live in darkness for 4 months every year?

    December 14, 2012 at 9:24 am |
  22. Doug

    So should we reform the United States to mimic smaller countries? This article is drawing a comparison that is completely out of context.
    Most of these countries have very small populations with an ethnic majority OVER 80% (many over 90%) and very low military expenditures. Managing a country, such as Norway, with a population of 4.7 million, of which 94.4% are all Norwegian, doesn't lend a model the U.S. could follow. In fact, the U.S. population is 28% larger that all the listed countries COMBINED....AND we have greater diversity.

    December 14, 2012 at 9:29 am |
  23. yellowtangoshoes

    I have lived in Denmark for a decade now. The government considers me well integrated and welcome the 55% taxes I have been paying. However, I am moving to the US. If you aspire to have security, stability and predictability, then come to Scandinavia. It has a higher average in income, in living standards but it is an average. It means that if you are above average, the you will be pulled downwards. The American dream is about making things happen when there is nothing there. It is not about safety and this means higher risks, and higher fluctuations. It is part of the American charm and diversity. I am ready for it!
    P/s: I question the statistic about government ownership. What is the parameter? If you look at the employment statistics, 32% of those who are employed works in the public sector in Denmark. Also, Americans should realize that what Oprah tells you about Copenhagen is bogus! Danes may be the most contented people but not the happiest. Ecstacy only happens when extremes are present.

    December 14, 2012 at 9:29 am |
    • Doug

      Hey Yellow.....I hope you do come to America!!

      Our country would only benefit......

      December 14, 2012 at 9:39 am |
  24. Superiormind

    This is another reason I don't pay MUCH attention to Fareed. He makes such idiotic conclusions with the premises he presents. How are HEALTH CARE and MORE VACATION TIME going to impact INNOVATION? What IMPACTS innovation more than ANYTHING are the VESTED INTERESTS. Take a minute to ask yourself WHY alternative ENERGY is not BIG in our country. It's because OIL Companies want CONTROL! And BOY do they HAVE control. There are lots of INNOVATORS here in the U.S. but we don't get the benefits of MOST of them, because they are not BUSINESSMEN. They are IMAGINATIVE thinkers who rarely are the type to try and FIGHT their way to the TOP. We have a HISTORY here of businessmen STEALING ideas and inventors going to COURT to try and recoup the benefits of their ideas. There would be a RENAISSANCE of American Industry if the twin SHACKLES of BIG Business and BIG Government were to be lifted off the PEOPLE!

    December 14, 2012 at 10:58 am |
  25. USN Ret.

    Scandinavia has low military expenditure because NATO and the U.S. have protected their freedom. Why spend when you can get someone else too.
    Don't get me wrong I have worked with the Norwegian Navy and Air Force during NATO exercises and they are great just small and to much area to cover alone. "Please do get into a drinking contest with them or the Canadian’s" It still harts to think about it.
    Finland tough fighters, “the Russians attest to that” and Sweden good fighters just too small to stop a larger military force with out help from NATO.

    December 14, 2012 at 11:00 am |
    • Viking-Power

      The first land battle won against Germany in World War 2 was fought in Norway, needless to say allied troops fled Norway the next day abandoning it to the Nazis for years, is that what you call protection? Oh yeah what about when your so called Russian "allies" invaded Finland and Poland with no repercussions? Good allies to have.

      December 17, 2012 at 6:20 am |
  26. Phiric

    You've got to be careful when someone tells you what the American Dream is, although I suppose it is worse to invoke it without discussing the definition. I thought, for example, that the American Dream was freedom/liberty. I don't recall our founding fathers expressing dreams of equal opportunity per se, but I do recognize that equal opportunity comes along naturally with liberty. I think Americans need to step back and realize that, with freedom, one has the freedom to NOT feed, educate, or house themselves. We must let the lazy be bums. When we do that, we're going to have a bunch of unhealthy, uneducated citizens who will "dragging us down" in rank with Scandinavian countries. So be it. If living in the land of the free is a downer, move. Do not allow the government to try to force me to live a better life so that our numbers look good. Do, however, as an individual, encourage me and help support me when my hard work isn't enough to put food on my table. I will return the favor.
    Basically, our nation was founded on principles that are not particularly Scandinavian. I'm okay with that.

    December 14, 2012 at 11:04 am |
  27. Hate Wins

    The American Dream was no matter who you were and where you were born or how poor/rich your family was you could be and do anything you could image wit perseverance and hard work.
    Today it seams not what you can do for yourself but what you need to do to get my country to do for you.

    December 14, 2012 at 11:19 am |
  28. Deryl Robinson

    How would Scandinavia do of it had a third world country with 100 million people on its border with refugees streaming in every day?

    December 14, 2012 at 2:28 pm |
    • Peter

      The population of Canada is just 35 million, not 100 million 🙂

      December 18, 2012 at 9:24 am |
  29. Andrey

    That is very strange that somebody views Scandinavia as being more free-market true capitalism example... That is absurd! That statement alone destroys the credibility of whatever is said after that.
    As the matter of fact: US is using war as a leverage to support its failing economy. It does not seem to work but US persist: so here comes the decline. What else would you expect? If not Scandinavia: that would have been somebody else: simple as that! There is nothing special about Finland or Denmark! The simple fact is: US is sinking! Is it so hard to see?

    December 14, 2012 at 2:44 pm |
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