Small lessons of Scandinavia on link between socialism and inequality

Atlantico ^

[wetphoenix]

A recent study published by Swiss Credit shows that the Scandinavian countries are the countries of Europe where most social inequality is determined. The increase in inequality is one of 15 worldwide major risks identified during the last forum of Davos.

Henry Milner is researcher invited to the department of political sciences has the university of Montreal, where he is linked to the research pulpit of the canada in electoral studies. In 2004-2005, i ran the pulpit in Canadian studies to the Sorbonne. He is notably admitted for his expertise on the Scandinavian countries and runs a summer school on this topic.

Atlantico: In countries from the north of Europe, 10 % populations keeps between 65 and 69 % total treasures. While these countries, Sweden, Denmark and Norway are regularly taken as models to be their strong protection of the population, how to explain such level of inequality?

Henry Milner: In general when they speak about inequality, and when the different societies are compared, it is normal and preferable to speak about sharing out of incomes.

What interests us, when it is redistributrices politics, it is the financial capacity of the State. And this one is based on the capacity to impose incomes and purchases. Therefore it is at the time when treasures are transformed into incomes that they become interesting for the State redistributeur.

[wetphoenix]

As regards countries in question, it is necessary to put the Scandinavian model in a historical perspective. The socio model democrat of the Scandinavian countries, and especially in suede, was based, in their gold age in 1950s, on big exporting companies as Volvo, capable of paying good wages. The State finds its count there, because he can count from now on on important samples at the same time wage earners, who enjoy a good wage, on the dividends of the shareholders and even on their purchases to finance a generous Welfare state.

This politics encouraged some easy persons to leave the country to avoid the strong tax rates, but fundamental result was to consolidate the position of the big exporting firms. Debates between the union representatives and the legislator around the target of this taxation, heritage is fact to choose between imposing income or, gave rise to a consensus around the priority which is to leave to the firms of competitiveness, capacities of investment and of innovation. Employers' federations and socio-democratic labour unions therefore signed a historical compromise on the responsibilities of each for the good walk of this model in 1938. During next years, the democratic social government encouraged a system of negotiations centralised between labour unions and employers, which allowed the application of the "model of Rehn-Meidner". In this model labour unions would lead a "united wage politics", demanding the same wage for the same working type, and refusing as well as the wage is fixed according to the financial standing of a particular firm. Consequently, less productive Swedish firms often ended up going bankrupt, while the most productive, profitable and technologically advanced absorbed the so liberated working force and benefited from competitive international higher one. That's how they attended the strengthening of very profitable firms. By speeding restructurings up and growth, this mechanism contributed has the quick increase of living standard in the decades of postwar years.

What relation is it possible to establish then between social welfare system and digging of inequality?

A light digging of inequality in incomes (coefficients gini) recent is noticed. Especially because of globalisation the system of centralised negotiations was weakened and distances of incomes post tax a bit augmented. The redistribution compensates for inequality nevertheless to a great extent under all its forms, which goes of the health insurance up to the grants of education. If populations are put sheltered from the need by the State, in what then is this digging of inequality problematic?

Let us be clearly.

The inequality of heritage is part of the system for a long time and poses no problem as such. They speak here about the increase of the inequality of incomes, which remains nevertheless more egalitarian than in other countries of the OECD. Therefore the Scandinavian populations do not think that this digging of inequality is deeply problematic. They consider even that their living conditions remain good, but if are distances of incomes continue becoming hollow, it could threaten it. It explains, for example, why the Swedes have just replaced a government of centre right with a government of centre left. Could he transpose elsewhere? What is the part of cultural referent who allows that this system could work?

The cultural referents have a weight some in this Scandinavian model, especially the capacity to find consensus around the cooperation based on compromises. So the Scandinavian countries created tripartite institutions which used this capacity in the middle of last century, when conditions differred very today's. To apply and to adapt the model as such would seem to me unfeasible if it should be set up today, that it is danes the countries of the north or elsewhere.

[OldNewYork]

Interesting.