Did the Scandinavians get it right?

Viking Economics:

by George LakeyPublished by Melville House, £20.99(Buy at Amazon)

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The near-success of Bernie Sanders in last year's American presidential primary contest and Labour's surprisinglygood performance in the general election in June has revived interest in alternatives to austerity. George Lakey's new book examines what Norway, Sweden and Denmark can teach us on this front. He argues that their high welfare spending and investment in public services creates a more equal society and paradoxically encourages investment and risk-taking.

Lakey backs up his arguments with his own experiences living in Norway and with evidence from various studies. He also attempts to debunk what he sees as the myths associated with these countries, including the belief that they have always been egalitarian when in fact up until 1950 they were extremely unequal.

Finally, he looks at how countries such as the US could adopt aspects of the Norwegian system not obvious given that the US's political system seems to give companies and wealthy individuals disproportionate influence.

Lakey makes a good case for the merits of a more egalitarian society. However, he unsurprisingly downplays some of the downsides to the Scandinavian model, including the fact that even the Swedes had to trim down an out-of-control state that was consuming nearly 70% of GDP in the early 1990s.

He also dismisses Sweden's problems with integrating immigrants as the product of racism, when in fact there is evidence that high taxes and regulations are making it hard for them to enter the labour market. There are definitely many things we can learn from Norway, but whatworks in a tiny, homogenous country may not work in much larger nations.