Scandinavian Unexceptionalism: Culture, Markets and the Failure of Third-Way Socialism

Scandinavian countries have been praised for their high levels of welfare provision and their economic and social outcomes. It is true that they are successful by most reasonable measures. However, Scandinavia’s success story predated the welfare state. For example, Sweden began to fall behind as the state grew rapidly from the 1960s. Between 1870 and 1936, Sweden enjoyed the highest growth rate in the industrialised world. However, between 1936 and 2008, the growth rate was only 13th out of 28 industrialised nations. Between 1975 and the mid-1990s, Sweden went from being the 4th richest nation in the world to the 13th. Many analyses of Scandinavian countries conflate correlation with causality. It is clear that many of the desirable features of Scandinavian societies, such as low income inequality, low levels of poverty and high levels of economic growth predated the development of the welfare state. These and other indicators began to deteriorate after the expansion of the welfare state and the increase in taxes to fund it.