Viking Economics (2 page)

There were cultural limits as well. Aside from the small, indigenous Sami population in the far north, Norwegians were mostly white Lutherans. Cultural homogeneity tends to support economic stagnation.

Poverty was widespread in other Nordic countries, too. Sweden
had significantly more natural resources and a larger population, yet it, too, hemorrhaged its white Lutheran population to other countries where prospects were better, including the United States.

Yet only seven decades later, Norway had achieved full employment, dramatically curbed poverty, built an efficient and modern infrastructure, and provided good free health care, retirement benefits, and free education for all of its citizens. That Norway achieved this before oil in the North Sea came online is remarkable, as is the fact that Sweden, Denmark, and Iceland all did the same—all of them without oil.

It is easy to forget the magnitude of this transformation.

When Berit and I were planning our Norwegian wedding and how I’d spend my year in Norway with her, she said in passing that I’d have no trouble studying at the University of Oslo. When Matriculation Day came around, I put down my fourteen-dollar matriculation fee and double-checked to see if I had really paid in full. I asked a couple of university student friends how this system could possibly make sense.

“Look,” Sigurd said, “wouldn’t you say that brains are an economic resource to a country?”

“Well, yes, of course,” I responded.

“Then,” he continued, “why wouldn’t you want to develop your resources fully instead of letting a barrier like money get in the way?”

As I walked back to our apartment I marveled at the sheer practicality of it.

Such policies seemed like charming eccentricities of limited relevance in 1960, the year Berit and I returned to the United States after a year of study. After all, in those days many Americans
did what I had been doing: working my way through a state college with a little family support and no debt to burden me when I graduated.

Today, with higher education spiraling out of reach for most Americans and public education as a whole being defunded, the Scandinavian choice to offer quality education without a financial barrier seems revolutionary.

What hadn’t dawned on me in 1960 was that the free universities typical of Scandinavia already existed prior to the prosperity they became known for. The Nordics decided that it was wise to invest significantly in education at all levels, and their decision has paid off handsomely—not only in productivity, but also in the experience of personal freedom.

Norway, Sweden, Denmark, and Iceland embarked on a very specific economic adventure. It’s no accident that the descendants of the Vikings designed economies with some of the same characteristics that governed their boats: a broad vision harnessed to practical action, relying on solidarity and teamwork. This combination of ambition and community promotes both freedom and equality, and those of us who share those values can learn from their story, which begins with the willingness to leave safe harbors—to venture out.

Like most Americans today, Norwegians a century ago didn’t like the results of a wealth gap: the hunger and poverty, the crime, elderly friends warehoused or left in isolation, young people without
hope of a good job. Norwegians also didn’t like the attitudes that went with inequality: an inclination toward arrogance among higher-income people and the feeling among lower-income people that they were losers, defeated by the system.

Early in the twentieth century, Norway had the formal institutions of parliamentary democracy, but ordinary people were not empowered: they did not set the direction of their society. The direction was set, instead, by the economic elite, through the political parties they dominated and the businesses they ran. Career options were limited, and there was little social mobility.

The differences between then and now are striking: If you’re a Norwegian teenager today and the job you’re interested in pursuing doesn’t require higher education, you can choose among good public vocational courses. If you learn better in a hands-on apprenticeship mode, publicly supported programs help you do that. If, instead, you prefer to develop a talent in art or music, or follow a career at sea or in engineering, you can attend a free post-secondary school.

Paid maternity and paternity leave (including for adoptive parents) is built into the system, and your job is held until you return. After the leave is over, child support is increased if you choose to be a full-time parent. If your choice is to go back to work, affordable childcare is available.

Extensive, subsidized public transport means that you probably won’t need a car to get to work. High educational standards prevail in big-city schools, as well as in the suburbs. Small towns receive subsidies to make them attractive for people who might otherwise feel forced to live in a city for cultural amenities, again increasing your options. The economy subsidizes family farming both for its own sake and for food security, so farmers can earn a
reasonable income, another freedom denied in many industrialized countries.

The government offers free vocational counseling, education, and job-training resources for people seeking a career change, and entrepreneurialism is encouraged through free health care and a public pension for all: In Norway, you have the freedom to fail without becoming a failure.

Money doesn’t dominate the political system, so citizens are freer to participate meaningfully in political life—and they’re more likely to be exposed to newspapers with a variety of points of view, because journalism is subsidized to avoid a narrowing of perspective. According to Freedom House, in 2013, Norway was tied with Sweden at number one in the world for freedom of the press. Denmark was sixth, and Iceland was tenth. (The United States was twenty-sixth.) Indeed, this approach to public life has a long lineage in the region: Sweden was the first country in the world to establish freedom of the press—in 1766.

The Nordics are among the longest-living people in the world, and older citizens continue to benefit from an economy designed for personal freedom. The Global Watch Index studied ninety-six countries and rated Norway as the best place to grow old, followed closely by Sweden.
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The pension system enables you to live at home with health aides or in a senior living facility. You don’t need to fear hunger or lack of medicines or of health care. Every small town has a music and culture center where you can enjoy the arts and pursue your hobbies.

The crime rate is very low, partly because societies with high equality tend to experience less crime. Even in their largest city, Norwegians enjoy a remarkable degree of freedom from fear about personal safety.

Designing an economy that supports freedom and equality pays off in happiness, judging from the Vikings’ descendants making the top ten in the UN’s International Happiness Index. In 2015, the ratings showed Denmark, Iceland, and Norway sharing first place with Switzerland, while Sweden was close to its cousins.
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The Organization for Economic Co-operation and Development (OECD), composed of thirty-four of the most-developed nations, compared life satisfaction experienced by the people in each country in 2013. The OECD found Norway second, Iceland third, Sweden fourth, and Denmark fifth.
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And yet in spite of all this security and support, the Nordic yen for adventure has not disappeared. Americans, too, have a strong yearning for both freedom and equality, so the Nordic desire for both isn’t surprising. What is surprising, though, is that they went ahead and built an economy to serve those values. That’s the story in this book.

Like their Viking ancestors, the moderns made mistakes in their explorations. Iceland’s financial collapse of 2008 was a spectacular error, and, as I’ll describe, back in the 1980s, the Norwegians and Swedes made a series of serious economic mistakes. The Nordics haven’t built a utopia: Norwegians see themselves as “a nation of complainers,” and this book doesn’t shy away from the challenges that face them and their Nordic cousins.

Still, it’s useful for us as outsiders to observe the Nordics’ expeditions and to use them to reflect on our own situations. There are many important lessons to be learned.

What pushed the ancient Vikings to venture outside their homes?

Some believe that a growing population was using up available land. There was, meanwhile, ample room for settlement in the nearby north of England, where agricultural land abounded. Danish and Norwegian Vikings settled there in such large numbers that they established “Danelaw.”

When I taught at Woodbrooke College in Northern England, Berit and I often dined with a group that included a man from Yorkshire. He seemed pleasant enough, but neither of us could understand a word he was saying—his Yorkshire dialect was too thick. Berit, the linguist in our family, suddenly solved the puzzle. “George,” she said, “I figured out how to understand Peter. He pronounces his vowels in the same way as we do in Norwegian!” Another explanation for the Vikings’ mobility is that other groups that had previously dominated long-distance trade routes were in decline, which meant that there was a niche the Vikings could step into. This might explain why Vikings journeyed into Russia and as far as Baghdad.

But Greenland had almost no population to trade with, nor
did other islands like the Orkneys and Faroe Islands in the extreme north, though the Vikings went there repeatedly. Even more puzzling is the fact that the Vikings ventured westward past Greenland all the way to North America, as far as Labrador and Newfoundland.

It’s tempting to conclude that the Vikings were not only driven to venture out, but also drawn by a vision of possibility.

If that’s the case, that capacity for vision emerged strongly in the twentieth century. Norwegians generated abundant support for their visionaries during the previous century. It’s a good thing they did, considering the economic realities they had to work with. Norway lacked the extensive land, abundant resources, and large population that enabled countries like the United States and Germany to generate robust, internally driven economies. Necessity, too, pushed Norwegians into the early experience of globalization.

President Barack Obama expressed the conventional wisdom when he addressed economic suffering in the United States in his August 28, 2013, address on the fiftieth anniversary of the March 1963 on Washington. He argued that the decrease in good jobs and the proliferation of lower wages for American workers were tied to technology and global competition.

Obama’s words would make little sense to Nordics, who for a century faced these challenges—technology and global competition—and nevertheless designed their economies to increase jobs
and raise wages. Being at the mercy of international market forces didn’t determine their destiny.

Consider Iceland, which at the beginning of the twentieth century was one of Europe’s poorest economies. Two-thirds of the people were employed in agriculture, working on small fields next to glaciers and lava left from the last volcanic eruption. For much of the century there were only a quarter-million Icelanders—a minuscule internal market. Economic growth was led by the fisheries, whose prices depended on international market forces.

Even more than the other Nordic countries, Iceland should prove that globalization necessarily means a “race to the bottom,” and further, that if a tiny economy is already near the bottom, globalization should keep its working people in misery.

But Icelanders rejected that narrative. They believed that an economy should serve the values of the people: equality, freedom, and solidarity. Icelanders found ways to prioritize investment in the people as part of their strategy for achieving prosperity.

While still objectively poor, the country offered free education, put its people into good housing, and gave everyone access to health care and secure old-age pensions. Icelanders learned to tap their geothermal energy for electricity and distribute it. They established a full employment policy and—as a country with the population of Buffalo, New York—built their own airline.

Although unable to reach the prosperity standard of their Viking cousins, Icelanders refused to be victims and, except for a notable recent lapse, developed an economy that served all its citizens. The idea that globalization is so powerful that it deprives people of agency is contradicted by the experience of the very countries that should be the most vulnerable.

In the nineteenth century, Denmark competed to be a European power: it owned both Iceland and Greenland and controlled Norway, and was rich in agriculture and trade.

Yet the Danish elite’s dream of empire was dashed in 1864, when Prussian leader Otto von Bismarck seized one-third of Denmark’s home base—the provinces of Schleswig and Holstein—and annexed them to Germany. Meanwhile, unemployment was rampant, and Danes were leaving their country in droves.

But thanks partly to the leadership of Lutheran bishop N.F.S. Grundtvik, the Danes recovered by developing their own society instead of preoccupying themselves with running other peoples’ countries. Social movements blossomed. Farmers discovered the advantages of working together through co-ops to make Danish dairy and meat products among the best anywhere. Danes invented folk high schools to make continuing education widely available to the people, and as usual, the investment in people increased innovation and efficiency.

By the late nineteenth century, the growing numbers of shipyard and factory workers began to feel their own strength, and formed study circles to explore why Danish wealth was not more widely distributed. The workers struck for the rights to vote and unionize; they learned how to make general strikes that shifted the balance of power. They also made a strategic alliance with the farmers, as did their Viking sisters and brothers in Norway.