Viking Economics (18 page)

Sweden also has a historic folk high school movement—about 150 schools—but the Swedish system offers more chance to prepare for college entrance than the Norwegian or Danish model does.

Danish children have nine years of compulsory schooling, plus a tenth year if they want it to be sure to be ready for their next step—the labor market or more schooling. The distinction in Denmark between primary school and lower secondary school is not as sharp as in Norway, and the two units may be housed in the same building. In the historic birthplace of the folk high school movement, Denmark has more than seventy schools operating across the country.

Icelanders also start at age six; they have seven primary grades and three years in the lower secondary school. Their upper secondary school lasts four years, so the students typically finish at age twenty. Each of their four track options—academic, artistic, vocational, and general—each leads to the option of entrance to college. Gylfason told me that Icelandic music schools were made free of charge fifty years ago (when Iceland was a poor country), and enrollment jumped from 1,000 to 16,000!

The OECD in 2013 published numbers on countries’ spending on formal education, calculated in various ways. As usual, over time, the Nordic countries play musical chairs at the top of the list of thirty-six countries. One OECD measure is the percentage of each country’s GDP devoted to education. The 2010 list put Denmark in first place, Iceland second, Norway fourth, and Sweden thirteenth.

The United States was in sixth place.
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The high rate of spending in the United States in the midst of widely deplored results by critics raises questions. Blaming American teachers is a popular indoor sport in my country, but there are other possible differences. One possibility is that education is like health care. The Nordics get “more bang for the buck” in health care by spending more wisely, relying mainly on single-payer systems rather than
the United States’ administratively top-heavy, wasteful market-based model.

Journalist Dana Goldstein’s study of multiple educational systems offers what seems to me a more likely possibility. She concludes that broad educational outcomes cannot be isolated from other aspects of the economy that influence learning and achievement. She finds that teachers and public schools in other countries “are threads in a social fabric that includes affordable childcare, health coverage, and job training.”
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U.S. schools are adding police to their budgets, by 2015 reaching 15,000 “school resource officers” in uniforms who sometimes carry weapons and are sometimes accused of targeting black students.
¹²⁶
School police are another price education pays for the United States’ failure to reduce poverty and racism.

If the holistic view makes sense, then once again the strength of Viking economics lies not only in individual institutions but in how they mutually reinforce one another to offer to individuals the freedom and equality that they want. A macro-design pays off.

I was slow to catch a cultural nuance in Norwegians’ enthusiasm for schooling. Compared with most other OECD countries, they prioritize spending for the schools for younger ages more than for colleges. Norwegians search for alternative pedagogical practices—they were early enthusiasts for Rudolf Steiner’s Waldorf model—and they like informal learning.

I saw in their behavior a classic dilemma for egalitarians: how
do you support excellence without becoming elitist? Sociologist Nils Christie, one of my teachers, said he worried about the tendency of schooling to simply replicate traditional Norway’s class stratification. Christie voiced a deeply rooted populist theme.

Norwegians have a phrase: “
for mye skole
” (“too much school”). They love learning but, when structured by schools, they are wary of a possible top-down bias. Might schooling invalidate knowledge that comes from practical application? Might schooling diminish the wisdom and passion of an individual’s inner, intuitive life? This is a people who cross-country ski and who watch a television program that simply features logs burning in a fireplace.

In 1959, when I began to study in Oslo, I was startled to be handed a several-page list of books and articles, and then to be told that my time was my own. The list of books was the
pensum
—the core content of sociology. I was invited to explore the field in a way that suited me while internalizing its basic set of concepts.

I was the only foreigner in our group, so I checked in with my new Norwegian classmates to see if they were as intimidated by this invitation as I was. They were not, because they expected it. “You are free to organize your time as you wish, George,” they explained.

“I’ll spend a lot of time this winter skiing,” Anne-Lisa said with a grin, “but I’ll take books along. When I’m prepared, I’ll do what you’ll do: tell them you’re ready to take the exam.”

“But what about the lectures and seminars?” I asked.

“Some are interesting and some are not,” she said. “We can do what we want to about them. I mostly study on my own and with friends.”

I found out about the examination process. When I believe I’m ready, I sign up to take two twelve-hour written exams, followed, if
I pass, by an oral exam. At the end I’ll be notified whether I passed or failed.

Passing means completion of that chunk of my studies, the
grunnfag
, which took most students a year to a year and a half. The university degree itself usually took three years and was roughly the equivalent of an M.A. in the United States.

As it turned out, I found that I relished the freedom, the chance to fall in love with a particular writer and read everything he or she had written, or to spend a whole day obsessed with a provocative footnote I found. I usually studied in a large room with other sociology students, and when I got stuck I asked one of them to help me figure something out. Sometimes we had serial conversations about something really challenging or controversial, and sometimes I went to lectures.

I passed the exams for my
grunnfag
in sociology within a year; the structure worked for me. I did, though, meet “professional students” who were taking forever with their studies (along with beer halls and ski slopes).

The Norwegian university curriculum has become far more structured since my day, to conform to the Europe-wide “Bologna process.” The change accompanies the larger trend of European integration, and aims to make schools and degrees more interchangeable from country to country. That, in turn, can increase freedom of opportunity.

Still, integrating into the more structured European university system spotlights the anti-elitist—and pro-intellectual—theme in Norwegian culture: how to keep alive for students their own free spirit of inquiry? Might “too much school” diminish reflective curiosity?

The best-known aspect of the Nordic model may be the high taxes. I imagine that was true among people dominated by the ancient Vikings as well. If the marauding Norsemen didn’t want to settle in your neighborhood, they were fond of setting up a tribute system, or what today we would call a protection racket: pay a yearly tax and you won’t get hurt.

The Viking descendants are more efficient. They tax
themselves
: income, property, capital gains, and inheritance. Almost every time they buy something, they pay a sales tax. Taxes in Norway account for 42 percent of the gross national product. Taxes in Denmark, to take the most-taxed country, accounted for half the gross domestic product in 2014. The average in the OECD, the association of thirty-six of the world’s richer states, was 34 percent.
¹²⁷

Because we in the United States are so familiar with the message that high taxes are a bad thing, I was astonished to read a comment by the former Norwegian prime minister, Jens Stoltenberg of the Labor Party, in
The New York Times
: “We won two elections promising not to lower taxes.”

Surely this is not Viking practicality; at last we’ve found a piece of Viking insanity!

On the other hand, I remember an encounter I had with the U.S. Internal Revenue Service some years ago. The IRS and I had a difference that led me, appeal after appeal, to an officer I could really talk with. I didn’t want him to misunderstand me, so I explained that I had no objection in principle to the graduated income tax approach. “In fact,” I said, “when I lived in Norway I paid at a higher rate than I do here.”

“Well,” the IRS man replied, “in Norway you got what you paid for.”

That’s
the basic attitude among Norwegians about their very high taxation rates. “To get a lot, we pay a lot.”

Inc. Magazine
sent senior writer Max Chaflin to Norway to interview entrepreneurs on their experience in a socialist-tinged environment. He interviewed Inger Ellen Nicolaisen, who founded and solely owns Nikita, the $60 million company that operates the largest chain of hair salons in Scandinavia. On Norwegian television she’s famous for being the host of the nation’s version of the Donald Trump show,
The Apprentice
.

Nicolaisen told Chaflin that she considers herself a political conservative. They talked about Norway’s choice to add to the income tax, charging people like her a percentage on the amount of wealth they have.

“ ‘Yeah, the wealth tax is a problem,’ she says. ‘But you have to make a choice. You can live in the Cayman Islands and pay no tax. But I don’t want to live in the Cayman Islands. To live in Norway, you have to do what you have to. I think it’s worth it.’ ”
¹²⁸

For their high taxes the Norwegians have gotten overall affluence, stability, opportunity, and a high level of services that make
life easier and more secure. They got, for example, the
two hundred
tunnels they needed for one train line, between their two largest cities, Bergen and Oslo. And they expect to pay for what they get.

Nobel Prize–winning economist Joseph E. Stiglitz was chief economist for the World Bank and keeps close track of comparative economies. He recently countered the belief found in the United States that high taxes stifle economic growth: “Far from it. Over the period of 2000 to 2010, high-taxing Sweden, for example, grew far faster than the United States—the country’s average growth rates have exceeded those of the United States—2.31 percent a year versus 1.85 percent.”
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For his article,
Inc. Magazine
’s Chafkin asked other Norwegian entrepreneurs how they feel about their high taxes. He talked with Wiggo Dalmo, who started out as an apprentice to an industrial mechanic and got a job repairing mining equipment. Dalmo quit to be his own boss, hiring other mechanics, and soon his new company, Momek, was taking in $1 million a year. He built a machine shop and hired more people, and a decade later had a $44 million company with 150 employees.

Dalmo was a good person to ask. He pays nearly 50 percent of his income to the government, plus a substantial additional tax that amounts to about 1 percent of his total net worth. As a CEO he also pays payroll taxes, which are double those in the United States. When he goes to the store he pays sales tax, which at 25 percent is about triple the average in the United States. Chafkin wanted to know: what’s Dalmo’s attitude toward all that?

“The tax system is good—it’s fair. What we’re doing when we are paying taxes is buying a product. So the question isn’t how much you pay for the product; it’s the quality of the product.”
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Something that builds public confidence about Norway’s income
tax system is that it is highly transparent, which guards against corruption and tax-cheating. Anyone can go online and read the returns of other Norwegians. If you know a corporate accountant who suddenly buys a Jaguar and builds a mansion, you can find out what she’s declaring and blow the whistle.

The fairness embedded in the system, and the use of taxes to build an economic design that provides multiple benefits for everyone, apparently did not impress every person of wealth. John Fredricksen, a shipping tycoon with $7 to $8 billion in assets, renounced his Norwegian citizenship and went to live in Cyprus. According to Chafkin, Fredricksen is something of a folk hero to entrepreneurs back in Norway—but, significantly, most stay in Norway.

I asked Arne Isachsen, an economics professor at the Norwegian School of Business in Oslo, why more Norwegians with wealth don’t send it abroad to be invested in global-south countries with higher rates of return. Capital flight has sometimes been a menace to countries seeking economic justice, after all. He said that to Norwegians the rate of return is only one value; a more important value to many people is stability. Norway’s highly reliable economy, proven in the years following 2008, reassures investors who have grandchildren and great-grandchildren; they like security more than they like riding a financial roller-coaster.

Clearly, a basic principle in the Nordic model is taxing for the common good. The leftist parties that governed Iceland after the 2008 economic collapse had a tense confrontation with the IMF
over exactly this issue. The Icelanders wanted to reduce the taxes on the working and middle classes and increase taxes on the rich. The IMF is famous for urging the opposite, as countries that continue to suffer from IMF-inspired austerity policies can tell us. In the case of Greece, 2015 found austerity hawks in the EU upping the ante on punishment to such an extreme that even the IMF could see it was self-defeating.

In 2009, Iceland won the argument with the austerity crowd and has made a stunning economic recovery. Every tax policy has, in the short run, winners and losers, and Icelanders wanted the winners to be workers and middle-class people, which in turn would end up benefiting everyone. It did.

Here we see in vivid colors how the outcome of a clash over tax policy—that is, over the value of equality—can build trust for a whole society. Two British medical epidemiologists have shown specific mechanisms through which the admittedly vague idea of “trust” is established. Richard Wilkinson and Kate Pickett called their 2009 international bestseller
The Spirit Level
after a humble carpenter’s tool. When laid horizontally on a surface, the tool enables the carpenter to see by the position of the small bubble whether or not the surface is level.