The myth of Scandinavian socialism: The Scandinavian countries utilize an economic system known as the Nordic model, or Nodric capitalism, which combines a large welfare state with free market policies like low barriers to industrial entry, property rights, free trade, minimal regulation, etc. [1] In short, they are market economies with welfare states. In fact, the scandinavian countries are some of the most economically free countries in the world. [2] Some people also point to them as an example of how high tax countries can have fast growing economies. However, these countries grow in spite of high taxes, not because of them. Indeed, several studies which examine taxation across developed countries show that when other determinants of growth are accounted for, taxation seriously diminishes growth. [3] [4] Furthermore, research finds that high levels of social trust increase economic growth. According to one study, The size of the effect in most studies is such that 10 percentage points higher trust is associated with half a percentage point higher annual growth rate. In the Scandinavian countries, about 60 percent agree that most people can be trusted, which can be compared to the OECD average of about just 40 percent. [5] Thus, Scandinavian countries arent socialist nor do they prove that higher taxes have no effect on growth. Citations: [1] en.wikipedia.org/wiki/Nordic_model [2] freetheworld/2013/EFW2013-complete.pdf [3] ideas.repec.org/p/hhs/ratioi/0130.html [4] papers.ssrn/sol3/papers.cfm?abstract_id=1699715 [5] journalistsresource.org/wp-content/uploads/2011/08/Govt-Size-and-Growth.pdf
Posted on: Sun, 24 Aug 2014 00:37:05 +0000
Trending Topics
Recently Viewed Topics
© 2015