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Northern Lights: the Positive Policy Example of Sweden, Finland, Denmark and Norway

08 Sep 2015

At the Festival of Dangerous Ideas on Saturday 5 September 2015, Naomi Klein spoke to a full concert hall at the Sydney Opera House about her latest book This Changes Everything. (Griffin Press, 2014). Her message was simple: climate change is about capitalism. Reverse free market rules about profit and growth in hydrocarbon-based industries and we have a chance of human survival. Ignore them and we do not.

Andrew Scott’s new book, Northern Lights, is not about climate change but social and economic behaviour in the four major Scandinavian countries. But there are connections. His analysis of the practices of child welfare in Sweden, education in Finland, industrial decline and re-adjustment in Denmark and the taxation system and the regulation of natural resources wealth in Norway, is consonant with Klein’s advocacy.  Capitalism, the profit motive and dividends to shareholders are alive and well in Scandinavia but the rules of the market place are modified and humanised by an active social conscience.

Scott recalls that Sweden tackled the Great Depression by founding the Social Democratic Party in 1932, a party that, with pragmatic gradualism, addressed unemployment, introduced consumer cooperatives and low-cost housing and cautiously transformed Swedish society. It remained in power for the next 44 years and endured beyond the assassination of Olaf Palme in 1988. Its child-welfare system, which encourages gender equality, generous paid parental leave for both parents, the prohibition of physical abuse of children and universal early childhood education and care, has been particularly successful. Scott observes that by almost every benchmark, Australia lags far behind, especially with regard to violence against children.

In Finland, Scott finds a vigorous and comprehensive public school system. Teachers are valued by society as highly as other professionals and are paid just as well. Five years of rigorous study and a research-based master’s degree are the minimum qualifications for teaching. Achievement of students is not performance-based, which Finns believe destroys teamwork and student confidence. Private schools exist but are prohibited by law from charging fees. Vocational skills such as car-building and servicing are taught at trade schools, in some cases leading to school-run auto-trades businesses. By comparison, says Scott, Australia remains fixated on Anglo-American education values. There is a substantial and growing divide between privileged private schools and cash-strapped, run-down public schools.

In the 1990s, Denmark, along with many other industrialised countries, had to deal with declining heavy industries. Its ship-building industry is an example of nimble re-adjustment. When a large plant at Nakskov was closed 2,500 jobs out of a population of 30,000 were lost. But the Danes turned the situation around with generous unemployment benefits, investment transfers and re-training. Ship-building technology was adapted to the manufacture of wind turbines for installation in the North Sea. Twenty-eight percent of Danish electricity is now generated by wind and it will rise to 50 percent by 2020. Scott compares this with the Australian auto sector. When Mitsubishi’s auto plant at Tonsley Park in Adelaide closed down In 2008 a third of assembly-line workers found alternative full-time employment, a third drifted into semi-part-time work and a third never worked again. The same pattern can be expected with the closure of Ford, General Motors and Toyota plants in 2017. Scott suggests that we could learn much from the Danes. For example assembly-line skills could be applied in the manufacture of wind turbines, photovoltaic cells, geothermal and other renewable technology.

In the 1970s, Norway, like Australia, relied heavily on its extractive industries, notably, oil from the North Sea. As the industry strengthened, the Norwegian government, with the unanimous agreement of all political parties, established the state-owned company Statoil which took ownership of 50 per cent of all new oilfields and used royalties to establish a technical college to train world leaders in strategically critical oil recovery skills. Norway also established a state-owned global oil pension fund which has cushioned the effects of revenue fall-off as the oil industry contracted. All moves were fiercely resisted by the American giant oil company Phillips Petroleum. Former Secretary of the Australian Treasury, Ken Henry, has observed that despite taking a far larger proportion of profits than foreign miners in Australia, the Norwegian oil industry continues to attract a large amount of private capital investment.

Throughout his book, Scott records the succession of Australian politicians, trade unionists and journalists who have visited the Nordic countries to learn their systems and recommend that we emulate them. The Whitlam, Hawke and Keating governments and some state governments, notably that of Don Dunstan in South Australia, adopted some Nordic practices but these were piecemeal and were overturned by successor governments. Meanwhile, the uniform reaction of Australian neo-conservatives to the way Scandinavians run their systems is one of scorn, claiming they pay far too much tax and their economies are in decline. Who would want to live in such mendicant societies? Welfare states? Nanny states?

In his conclusion, Scott offers an explanation of why Australia has not embraced some of the more compelling Scandinavian practices. He sees the ALP as inward-looking with its factionalised party machinery dominated by machine organisational processes which allow little space, respect or reason for discussion of even mildly radical ideas. Meanwhile, Australian conservatives are obdurate and fixated on Anglo-American values, above all, the magical logic of free enterprise and the marketplace.

But this reviewer is left disappointed because such a compelling template for Australian industrial and social reform does not go far enough. Let us hope Scott is at work on a sequel setting out a compelling blueprint for Australian reform.

Andrew Scott, Northern Lights: the Positive Policy Example of Sweden, Finland, Denmark and Norway, Griffin Press, 2015

Richard Broinowski Richard is a former ambassador and is currently an Adjunct Professor at the University of Sydney and President of AIIA NSW. This article can be republished with attribution under a Creative Commons Licence.