It may no longer be fashionable to mention the welfare state, but the reality is that most European countries have adopted this socio-economic model. Many now wonder whether they can still afford the welfare state especially in the light of sluggish economic growth, stagnating productivity, rising inequality, and immigration pressures from millions fleeing their war torn, impoverished countries in Asia and Africa.
A recent excellent article in the Financial Times highlighted the challenges facing Nordic countries – Denmark, Finland, Norway and Sweden – that have so far been the most successful in making the welfare state model a viable one. These countries are now showing the way ahead for the re-engineering of the welfare state, even if there are other countries that have more pressing needs for structural reforms, if they are to meet the expectations of their people.
The need for reform is coming from both ends of the political spectrum. Samak is a grouping of Nordic Social Democratic parties and trade unions. In a recent report they “focused on labour concerns, such as stubbornly high unemployment and the pressure on welfare states from an ageing population and immigrants”. Samak admits that “the challenges are significant and require a major Nordic restructuring effort”.
The Boston Consulting Group makes 10 policy recommendations that are essential for the survival of the Nordic welfare state model. These range from cutting the share of government spending in the economy to getting people off benefits and into the workforce. To achieve this aim, Nordic countries need to build on the pillars that have delivered results in the last several decades.
Helle Thorning-Schmidt, Denmark’s centre-left Prime Minister defines these pillars as “equality, trust and collaboration”. These pillars have helped Nordic countries to reform their educational, health and social systems in the past to make their welfare states sustainable socioeconomic models that are the envy of other Western democracies.
The crucial question that needs to be asked is whether this model is transportable to other countries. This is when I start having some doubts. In Nordic countries political debate on the re-engineering of the welfare state is largely non-confrontational. This does not imply that there is consensus on the strategies and tactics that need to be used to re-engineer the economy.
Neither the left nor the right of the political spectrum has a monopoly on the principles of good national governance
The new centre-left Prime Minister of Sweden, Stefan Lofven, said: “What we need to do is to have more working hours in the economy. We need improved productivity that is basically what gives us the chance to have such good welfare.” He does not shy away from listing a number of prescriptions from both ends of the spectrum ranging from raising the retirement age to getting students into the labour market earlier and boosting the employment rate among women and immigrants.
Our own version of the welfare state needs a revamp. Efforts have been made in the past decade to start this process. Much more needs to be done. Having a plan is not enough. What is important is a planning mindset that makes us chart the way ahead, constantly checking progress in achieving our targets, and fine-tuning our strategies to make sure that they give us the results that we aim for.
Many have found this year’s pre- and post-Budget debate quite sterile, at least judging by the comments of some contributors in the media. Some leftist thinkers doubt the value of education in addressing social inequality. They also seem to believe that government should act as a deus ex machina to resolve the growing social inequality by meddling more directly in the economy by ‘taxing and spending’.
Some seasoned commentators keep changing their prescriptions for the challenges facing the country, possibly because the political policymakers have changed. They don the mantle adorned with the hallmarks of evangelical and humanistic values. They are convinced they alone know how to calibrate the country’s ‘social compass’.
But they fail to acknowledge, at least publicly, that in the real world, money does not grow on trees. Before we can distribute wealth fairly, we first have to create this wealth through sweat and hard work.
Neither the left nor the right of the political spectrum has a monopoly on the principles of good national governance. The socio-economic realities that we, like other countries, face are very complex. Complacency and an unrealistic sense of entitlement are our worst enemies in the re-engineering of our own welfare state that does not come as a birthright, but needs to be continually developed.
johncassarwhite@yahoo.com