Viking Economics (26 page)

For decades the airwaves have been full of anti-government rhetoric insisting that only private business can be “job creators.” However, almost half those polled in 2014 wanted the government to provide a job to any citizen who cannot find work in the private sector. Such a policy would actually be more radical than that of the Nordics!
²¹⁵

In 1994, conservative Republicans took control of Congress.
When polltakers asked a random sample of the American people whether it is the responsibility of government to care for those who can’t take care of themselves, 57 percent thought so. Then change happened, in two directions. In the following decade, both parties shifted toward greater conservatism. The people, in contrast,
shifted during that time toward the Nordic model
: by 2007, the number believing that government should take responsibility for the poor rose to 69 percent. Over two-thirds of the public said government should guarantee every citizen enough to eat and a place to sleep.
²¹⁶

Some politicians claim that a majority of citizens fear big government and want to shrink it. However, two-thirds said in 2007 that they want the government to guarantee health insurance for all citizens. Citizens are urged to beware of governmental regulation, yet three-quarters
even of self-identified Republican small-business owners
said they favored raising the minimum wage by more than $2. In 2014, voters in four Republican states did raise the minimum wage: Alaska, Arkansas, Nebraska, and South Dakota.
²¹⁷

The Nordics are famous for high taxes, and U.S. politicians claim that our people would not tolerate that, but some polls show otherwise. In Pennsylvania, a staggering 83 percent said they wanted to maintain support for public schools even in bad times, and are willing to raise state taxes to do so.
²¹⁸

The degree to which the leadership of both national parties are out of touch with the majority is remarkable. In 2014, national polls revealed that a majority of Americans want to address global warming. A year later the Senate appointed its leading climate-change denier to be head of the Senate’s committee on the environment.

Polls in 2014 revealed a strong class difference among Republicans,
with many of the blue-collar males who become Republicans in recent decades refusing to sign on to the 1 percent’s agenda. In addition, 45 percent of Republicans believe that the rich should pay more in taxes. More Republicans favor increased spending on Social Security, Medicare, education, and infrastructure than favor cutting those programs.
The New Yorker
’s George Packer sums up the evidence this way: “Although government activism is anathema to conservative donors and Grover Norquist, it’s fine with a lot of Republicans making less than fifty thousand dollars a year.”
²¹⁹

The mainstream media continue to report the discourse of the political class as if it accurately reflects what Americans think. I find that many people in my audiences who think that Nordic-style policies are sensible have no idea that they are in fact members of the American majority. They assume that their views are shared only by a small minority. It was therefore a large surprise that Presidential candidate Senator Bernie Sanders, a democratic socialist, attracted the largest crowds of any candidate in the Democratic race in the summer of 2015 despite the reluctance of the mass media to cover him.

If Americans were allowed to hear the Nordic story, even larger majorities would want to adapt that model for this country. North Dakota, the state with the largest population of Norwegian Americans, offers evidence for that. When North Dakota struck it rich in oil it knew from Norway’s experience that it is possible to gain public revenue from the oil and at the same time avoid dependency on that source. It therefore created what it calls a Legacy Fund for use in the longer run. Boom-and-bust has little allure when a population knows enough about the Nordic model to know that a much better alternative exists.
²²⁰

In short, multiple sources suggest that the major political parties are lost in their bubble of manipulation and money. A majority of Americans do want the greater equality of opportunity and freedom that the Nordics have.

The Nordic model’s dependence on the state can easily be overblown. I’ve described earlier the enormous vitality of the cooperative sector as well as the under-the-radar activity of civil society. In these ways, Norway, for example, is similar to the United States, whose sector of cooperatives is once again growing. Political economist Gar Alperovitz’ important book
What Then Must We Do?
describes an American abundance of thriving co-ops and innovative public-private partnerships that are breathing new life even into deindustrialized areas that corporations abandoned decades ago.
²²¹
As in the Nordic countries, cooperatives show they can scale up as well as down, and provide the flexibility that corporations at their best provide, and more staying power than most corporations are interested in.

On the other hand, the widespread American distrust of government is real. A century ago, most Norwegians also distrusted their government, as did their Viking cousins. They had every reason to distrust government when they realized that the government consistently served the economic elite instead of the people as a whole. The government failed to hold up its end of the implicit social contract between citizen and state.

Norwegians are now happy to pay high taxes because they
trust the new political class they have installed. They gave the Labor Party a chance to come through and it did, abundantly, forcing the other parts of the political landscape to shift significantly to the left in order not to remain completely isolated on the margin. During my interview with the head of the leading Conservative think tank Citiva, I was struck by Kristin Clemet’s observation. She is a prominent conservative politician and said that, in Norway, President Obama would be considered right-wing. She said she would be happy to have him as a member of her party.

The Swedish political spectrum is similar. And in Denmark the joke I heard making the rounds is that the multi-party Danish system is composed entirely of social democratic parties!

As I mentioned previously, Norwegians see themselves as “a nation of complainers.” They don’t expect their state to be anywhere close to perfect, and have abundant built-in mechanisms to force transparency and accountability. This realism—built on a foundation of peoples who empowered themselves through creating mass movements that forced nonviolent change—makes Norway, Sweden, and Denmark democratic and minimizes corruption. The result is government people can trust.

My conclusion is that the question of trust in government is incorrectly framed. According to a poll reported by
Harper’s Magazine
in 1966, two-thirds of Americans said they trusted the government most of the time. Only one-fifth say that now.
²²²
This dramatic decline is explained by other polls showing majorities, even of Republicans, believing that the government has been prioritizing the interests of the economic elite.
²²³

Economic democracy produces governments people can trust. Recent elections in the Nordic countries attract up to twice the percentage of voters as our elections in the United States. The Nordic
example shows that people can make a U-turn on the trust issue after a power shift delivers democratic governance.

Nobel Prize–winning economist Paul Krugman challenges the conventional wisdom that exploding inequality in the United States and the UK in the 1980s and ’90s was driven by two things: a rising demand for highly skilled labor—an aspect of spreading information technology—and imported goods like textiles replacing the need for less-skilled labor. By contrast, he points out that Canada, France, Japan, the Netherlands, Spain, and Switzerland lived with the same market forces and did not experience steep inequality growth. The same is true in the Nordic countries.

The UK’s experience is relevant to this question. After the harrowing experience of World War II, during which the British experienced enormous solidarity and the British Communist Party grew substantially, the UK turned to its social democratic Labour Party and aimed for an economic system much like that of the Nordics.

The Brits didn’t get there, but they made sufficient strides so that the UK shows up in most international ratings in a better light than the United States. In his article refuting globalization and technology as causes of our ills, Krugman writes that the UK and the United States experienced a similar source for their declines in equality: attacks on trade unions, abandoning productivity sharing agreements with labor, and the offensive by the political right with resulting changes in taxes and benefits.
²²⁴

We don’t usually think of liberal Krugman and centrist Harvard economist Lawrence Summers in the same camp, but Summers’s comment on taxes as a wealth-equalizer on national public radio bears repeating. Summers was Secretary of the Treasury under President Bill Clinton. When asked about French economist Thomas Piketty’s proposal to reduce the wealth gap by creating a “wealth tax” for rich people, Summers said it was a good idea. He also said it was not politically possible in the United States.
²²⁵

This question makes two assumptions, one correct and one not. Getting this right opens the door to good old-fashioned American optimism, by pointing to the real source of hope.

The correct assumption made by the questioner is that big money corrupts our system. This is not new. With its
Citizens United
decision the Supreme Court opened the floodgates for billions of dollars to enter the electoral system. But the evidence shows that the problem goes much deeper than that.

In 2014, two U.S. political scientists released a broad empirical study that reveals who actually has the say in public policy. Martin Gilens of Princeton and Benjamin I. Page of Northwestern examined the 1,779 specific policy issues that came to a head for national decision over the two decades between 1981 and 2002, long before the current money rush. On each issue they determined from opinion polls and other evidence what the majority of the public wanted and what the economic elite wanted. When
those two views differed, the scholars wanted to know whose view prevailed. They took into account the fact that ordinary citizens often combine to form mass-based interest groups like the American Association of Retired Persons (AARP).

What they found was that, when there was a difference, the economic elite—and not the majority—almost always got their way.

Even the mass-based interest groups had little or no independent influence. In the scholars’ words, “In the United States, our findings indicate, the majority does
not
rule—at least in the causal sense of actually determining policy outcomes.”
²²⁶

The BBC account of the study used the word “oligarchy” to describe the findings of the research, although Gilens and Page did not reach a conclusion on whether it is the top 1 percent or the top one-tenth of 1 percent who are the most influential within the category “economic elite.”

The new study flatly contradicts what high school and college teachers taught in my day, and probably in yours: that the United States is a pluralist democracy in which decisions are made legislatively as a result of shifting coalitions of interest groups including the majority of Americans. The Princeton study’s more accurate picture of reality is sobering, but it is also freeing. The study invites us to let go of frustration and the discouragement felt by many Americans who keep returning to the electoral well in hopes of change, only to find that the well is dry. It is not our fault. The U.S. electoral system truly is rigged against progressive change.

The incorrect assumption from my questioner is that the Nordics used the power of the vote to change their economies and societies. Like us, a century ago the Norwegians, Danes, Swedes, and Icelanders all had electoral systems that pretended to be responsive to the people, but were not. They all came to realize that their
“liberal democracies” were in fact oligarchies, incapable of birthing what is now called the Nordic model.

In each country, the people took to the streets to force an opening for the will of the majority. The Norwegians, Danes, and Swedes went the farthest, displacing their economic elite as the hegemonic force directing society. Once they did that, they had the political space to create a new economic model.
²²⁷

Iceland showed its people-power more recently when, after their 2008 crash, they took to the streets and refused to accept austerity, high unemployment, and a stagnant economy. If Americans had done the same after our own crash of 2008, we could have narrowed the wealth gap as the Icelanders did theirs, kept families in their homes, retained high wage-earners in high-paying jobs, avoided skyrocketing college debt, broken up banks and imposed rigorous regulation on them, and reduced levels of mental and physical illness. But Americans had failed to learn from our own historical legacy of nonviolent direct action that forced change when the electoral channel was clogged.

At any time we choose, Americans could decide to learn from our own abundant experience of people-power triumphing despite harsh opposition. In the 1960s, the civil rights movement faced down the largest terrorist movement in U.S. history, the Ku Klux Klan, as well as lawless police. Brave African Americans with white allies won gains and took casualties, while a largely indifferent federal government looked on. Finally the federal government was forced to act—by that same civil rights movement.
²²⁸