BOOK REVIEW; The Nordic Edge: Policy Possibilities for Australia

The second chapter marshals statistics to refute the idea, rife in Australian policy debate, that lower taxes lead to higher levels of economic performance. Its comparative study of 188 economies shows that higher levels of taxation are positively correlated, not only with higher average income, but with other measures of economic performance and social well-being.

Some years ago, in a conversation with two older SEARCH members, the question came up of what examples the Left could point to of successful application of its agenda. We agreed that the clearest examples could be found in the Scandinavian countries. The Nordic Edge develops this idea at book length.  

The book begins by stating that “The five Nordic countries – Sweden, Finland, Denmark, Norway and Iceland – are among the world’s most prosperous, equal, happy and environmental responsible nations” and goes on to look at whether Australian public policy could benefit by looking to those countries for positive examples to learn from, rather than looking to the United States, United Kingdom or Australia’s Asian neighbours as is more often the case. 

The Nordic Edge proceeds to an overview of policy successes in the Nordic countries, then goes on to refute two broad arguments as to why these cannot be replicated in Australia. These arguments are the supposedly monocultural nature of Nordic society’s compared to Australia’s multiculturalism, and the argument that a country’s policy directions are “path dependent” with the Nordic countries following different paths to Australia. In fact, the Nordic societies have become increasingly multicultural without lessening public support for their social democratic and socially liberal policies. As for path dependence, countries can and do change policy direction as a result of political interventions, with some of the Nordic countries themselves changing from some of the least egalitarian to the most equal societies in the developed world as a result of popular political mobilisation. In addition, examples already exist of successful adoption of Nordic policy innovations by other countries, such as the establishment of ombudsman and childrens’ commissioner positions, outlawing corporal punishment of children, paid parental leave, and improving the quality of the teaching profession. On the latter issue the Victorian State government has implemented reforms since 2018 that seek to learn from the success of Finland’s school system. 

The second chapter marshals statistics to refute the idea, rife in Australian policy debate, that lower taxes lead to higher levels of economic performance. Its comparative study of 188 economies shows that higher levels of taxation are positively correlated, not only with higher average income, but with other measures of economic performance and social well-being.

Chapter three looks at Norway’s sovereign wealth fund, officially the Government Pension Fund Global, which utilises revenue from Norway’s oil export industry to support the country’s welfare state and strategic economic investment. The fund is constituted in a way that ensures democratic political control of its investment policies, application of revenues in the interests of Norwegians rather than overseas shareholders, transparency, and commitments to socially and ecologically responsible investments. While Norway has had to grapple with the tension between its economic reliance on exports of a fossil fuel and its aspirations to be a good international citizen on climate change, recent years have seen the fund prioritise the latter goal in its key investment decisions. The chapter starkly contrasts the success of the Norwegian fund, and the way in which Norway has parleyed its resource wealth into supporting a transition to a more diversified and sustainable economy, with Australia’s lacklustre Future Fund and lack of progress in achieving economic and energy transitions. 

The next two chapters show the potential for feminist values and insights to improve a country’s foreign and domestic policies.   

Sweden’s former Foreign Minister Margot Wallstrom outlines the formation and implementation of Sweden’s feminist foreign policy from 2014 onwards. The policy is designed around the three Rs of Rights (women’s rights and equality in all spheres), Representation (empowering women in all policymaking forums) and Resources (ensuring the provision of resources to empower women and secure their rights. It seeks both to foreground women-specific concerns in foreign policy and international affairs, and to maximise the influence of feminist values in general foreign policy – “more women means more peace” 

Gender budgeting, put simply, means analysing and framing economic policies in the light of their specific impacts on women and differential impacts on women and men, and on the basis of data that includes realities of women’s lives and activities that conventional budgeting fails to factor in. The Nordic countries have successfully developed gender budgeting to an advanced level. Australia, by sad contrast, after being an early leader in the field, abandoned it from the 1990s onwards, with both Labor and Coalition governments presiding over this regression. The chapter notes that both the ALP and the Greens have committed to reversing this and restoring gender budgeting, and that the Nordic examples offer learnings as to how this could be done. 

The chapter on boosting workforce participation and wages looks at how Scandinavian countries’ achievements in maximising women’s labour market participation, enabling women to combine work and family and minimising career interruption for women have succeeded both in avoiding some quite significant inequities (e.g. in retirement income) that are rife in Australia, and in also increasing overall economic performance and living standards. Childcare and parental leave are key areas where Nordic policy provides an example to be emulated. Sweden’s more collective, solidaristic and cooperative approach to wage determination also offers an attractive alternative to Australia’s shift to decentralised bargaining which has contributed greatly to wage stagnation in recent years. The Nordic countries’ approaches to retraining and re-employing displaced workers, and to robust public systems of vocational education likewise provide attractive alternatives in fields where Australia’s recent performance has lacked lustre, with serious consequences for this country’s capacity for just transitions. 

Another chapter looks at the cutting-edge role of the Nordic countries both in climate change diplomacy and in promoting energy transitions domestically, the latter giving a credibility to their global climate policy stances that Australia currently lacks. A significant factor favouring positive outcomes in this area include the more cooperative political cultures of the Nordic countries, and pluralistic party systems underpinned by proportional voting, which favour the negotiation of consensual energy and climate policy outcomes and continuity in policy despite changes in government, in contrast to the gridlock produced by Australia’s adversarial politics. Norway’s successful promotion of electric vehicles is the topic of another chapter, and again provides a contrast to Australia’s policy dithering and toxic electoral politics in this area.  

A particularly interesting chapter concerns the Nordic countries’ success in retaining and promoting media diversity, including through strong national public broadcasters, extensive subsidies to media outlets that are second or third competitors in media markets, and support for local media. Nordic media policies prioritise a democratic logic over a commercial and market logic: a diverse and journalistically professional media is seen as a necessary requisite for informed democratic public participation, and this takes priority over the concept of the media as providing a consumer product to audiences. 

A final chapter contrasts the constructive approaches of Nordic countries to prisoner rehabilitation with the more punitive carceral model pursued in Australia. As far as possible, persons convicted of crimes in Nordic countries, while kept in custody, are enabled to live a reasonable approximation of a citizen’s life outside, and benefit from programs designed to enable them to be, upon release, “people who can be your neighbour”. Prison staff are more highly trained than in Australia, and seek to develop interactions with prisoners that are more humanising and less likely to favour polarisation between mutually suspicion prisoner and “screw” cultures.  

Do any of the Nordic countries provide a successful model of democratic ecological socialism, rather than reformed capitalism? Not yet. However it would be a major advance from our current predicament for the Australian Left to put an agenda of reforms along Nordic social democratic lines at the centre of public debate, and successfully mobilise support for them. The Nordic Edge is a valuable contribution to such a project. 

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