Would the Scandinavian model fit the United States?
Milton Friedman gave a wide-ranging interview with New Perspectives Quarterly editor Nathan Gardels last November. One of Friedman’s answers intrigued me: NPQ | Perhaps the Scandinavian countries are a model to look at. They are high-tax but also high-employment societies. And they have freed up their labor markets much more than in Italy, France or ...
Milton Friedman gave a wide-ranging interview with New Perspectives Quarterly editor Nathan Gardels last November. One of Friedman's answers intrigued me: NPQ | Perhaps the Scandinavian countries are a model to look at. They are high-tax but also high-employment societies. And they have freed up their labor markets much more than in Italy, France or Germany. Friedman | Though it is not as true now as it used to be with the influx of immigration, the Scandinavian countries have a very small, homogeneous population. That enables them to get away with a good deal they couldn?t otherwise get away with. What works for Sweden wouldn?t work for France or Germany or Italy. In a small state, you can reach outside for many of your activities. In a homogeneous culture, they are willing to pay higher taxes in order to achieve commonly held goals. But ?common goals? are much harder to come by in larger, more heterogeneous populations. The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can?t do that. Politics exacerbates and magnifies differences. I suspect that Amy Chua would have some issues with Friedman' last assertion, but it is an interesting hypothesis. Could it be that the liberal market economy's primary advantage over the coordinated market economy is not it's better efficiency or productivity, but the fact that it works better over a wider variation of societies? Check out the rest of the Friedman interview as well -- the dark matter controversy comes up.
Milton Friedman gave a wide-ranging interview with New Perspectives Quarterly editor Nathan Gardels last November. One of Friedman’s answers intrigued me:
NPQ | Perhaps the Scandinavian countries are a model to look at. They are high-tax but also high-employment societies. And they have freed up their labor markets much more than in Italy, France or Germany. Friedman | Though it is not as true now as it used to be with the influx of immigration, the Scandinavian countries have a very small, homogeneous population. That enables them to get away with a good deal they couldn?t otherwise get away with. What works for Sweden wouldn?t work for France or Germany or Italy. In a small state, you can reach outside for many of your activities. In a homogeneous culture, they are willing to pay higher taxes in order to achieve commonly held goals. But ?common goals? are much harder to come by in larger, more heterogeneous populations. The great virtue of a free market is that it enables people who hate each other, or who are from vastly different religious or ethnic backgrounds, to cooperate economically. Government intervention can?t do that. Politics exacerbates and magnifies differences.
I suspect that Amy Chua would have some issues with Friedman’ last assertion, but it is an interesting hypothesis. Could it be that the liberal market economy’s primary advantage over the coordinated market economy is not it’s better efficiency or productivity, but the fact that it works better over a wider variation of societies? Check out the rest of the Friedman interview as well — the dark matter controversy comes up.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
More from Foreign Policy
Saudi-Iranian Détente Is a Wake-Up Call for America
The peace plan is a big deal—and it’s no accident that China brokered it.
The U.S.-Israel Relationship No Longer Makes Sense
If Israel and its supporters want the country to continue receiving U.S. largesse, they will need to come up with a new narrative.
Putin Is Trapped in the Sunk-Cost Fallacy of War
Moscow is grasping for meaning in a meaningless invasion.
How China’s Saudi-Iran Deal Can Serve U.S. Interests
And why there’s less to Beijing’s diplomatic breakthrough than meets the eye.
Sign up for Morning Brief
Foreign Policy’s flagship daily newsletter with what’s coming up around the world today. Delivered weekdays.
By submitting your email, you agree to the Privacy Policy and Terms of Use and to receive email correspondence from us. You may opt out at any time.
