Scottish independence essay: Nordic model a fantasy

Stortorget Square in Stockholm. Nationalists desire to model an independent Scotland on countries such as Sweden are flawed as their favoured Nordic model was replaced by a more Thatcherite approach 25 years ago. Picture: Contributed

THE STORY is all too familiar. The marriage grows stale with the years. Those charming idiosyncrasies become intolerable irritations. The unhappy husband or wife catches the eye of a comely stranger. A glance turns into an affair. After a lot of rowing the unhappy couple finally divorces and life begins again.

This is half the story of the possible divorce between Scotland and the rest of the United Kingdom: a significant number of Scots think they would be much happier with the comely Nordics than with the dowdy English. But the other half of the story is more complicated. The Nordics show no sign of reciprocating the suitor’s affections. And the Nordic model that the nationalists have fallen in love with disappeared 25 years ago.

Evidence of the affair can be found all over the place. The Scottish National Party cannot get enough of the Nordic model. The Nordic model is not only vastly superior to the English model – it provides people with a higher standard of living while guaranteeing a safety net that is so generous that fathers get a year’s worth of paternity leave. It is also more in tune with Scotland’s collectivist and egalitarian tradition. The Jimmy Reid Foundation argues that the Scottish idea of the Common Wealth is the local equivalent of the Nordic ideal of the “folkhemmet” or People’s Home. Lesley Riddoch, a columnist on this paper, has established a thinktank, Nordic Horizons, to push for closer links between the Holyrood parliament and its northern neighbours. Angus Robertson, the SNP’s spokesman on foreign affairs and one of its leading Nordo-philes, says that one of the first things an independent Scotland will do will be to apply to join the Nordic Council, a steering group of Nordic countries.

Scotland’s infatuation with the Nordic model is not hard to understand. The Nordic countries routinely come at or close to the top of every official measure of success, from economic success to social wellbeing. It is common to argue that countries face a trade-off between economic growth and quality of life. The Nordic countries show that it is possible to have the best of both worlds.

Scotland and the Nordics are also drawn together by powerful ties of culture. Some ties are direct and genetic: the Viking raiders of the early Middle Ages left a profound mark on the country. The Shetland islanders still burn a Viking longboat every year. The language is littered with Scandinavian words. Other ties are cultural and geographic. Both Scotland and the Nordics are profoundly shaped by the Protestant religion and a frequently challenging climate and geography (asked to list his nearest railway station on a parliamentary expense form Jo Grimond replied “Bergen, Norway”).

Both the Scots and the Nordics lead the world in extracting natural resources. Both have a marked taste for the grain and the hop. And both excel in producing the modern equivalent of Viking sagas. Henning Mankel’s Inspector Wallender and Ian Rankin’s Inspector Rebus are cut from the same cloth: brooding individualists determined to get to the bottom of the blood-soaked story whatever the higher-ups tell them.

There are all sorts of obvious problems with this Scandimania. The Vikings left a more profound imprint on Northumbria, Cumbria and Yorkshire than on Scotland. Scotland’s west coast is more Irish than Scandinavian. Denmark and Southern Sweden look more like East Anglia than they do the Scottish Lowlands, let alone the Highlands.

There is no evidence that the Nordics reciprocate Scotland’s infatuation; indeed, the Nordic countries are some of the most Anglophile places on earth. The Nordics compete with each other to tell British visitors how much they prefer British bands like the Rolling Stones to locally-grown naff-fests like Abba. London is one of the biggest centres of Nordic ex-pats in the world and has a flourishing eco-system of Nordic restaurants and bakeries.

The biggest problem with the SNP’s Scandimania, however, is that it is in love with a Nordic model that was traded in for a new model more than two decades ago.

The Nordics spent almost 50 years after the war trying to perfect the People’s Home. By the early 1990s Sweden’s government gobbled up three-quarters of national wealth and Sweden’s top-rate tax payers handed over almost all their income in taxes. But the People’s Home became increasingly dilapidated: Sweden went from being the fourth-richest country in Europe in the early 1970s to the 14th richest in the early 1990s, behind Britain and Italy. And the Home collapsed completely in a succession of crises in the early 1990s that saw banks collapse and interest rates rising to 500 per cent.

Since then the Nordics have introduced a radically new economic model that owes more to Thatcherism than to socialism. Sweden has reduced the size of its government from 67 per cent of GDP in 1993 to 49 per cent of GDP today and reduced its tax burden dramatically, slashing its top rate of tax by 27 percentage points since 1983, abolishing tax on property, gifts, wealth and inheritance, and cutting its corporation tax. It has also donned a golden straitjacket that obliges it to balance its budget over the three-year economic cycle.

The Nordics have gone further than Mrs Thatcher ever dreamed in reforming the welfare state. Sweden gives all children the equivalent of a school voucher and allowed private companies to run public schools. Denmark has gone even further: parents can use state money to send their children to private schools and then top it up with their own money. Private companies (many of them backed by private equity companies) run a quarter of Sweden’s primary care practices and some of its leading hospitals.

The SNP has said almost nothing about how it would generate the money for all its planned social spending. The Nordics, by contrast, are enthusiastic capitalists, obsessed by the question of how small countries pay their own way in the world. The Nordics can boast a remarkable number of first-class companies from Novo Nordisk (insulin) to Lego (interlocking bricks) to Sandvick (engineering). Sweden has one of the liveliest start-up scenes in Europe, with companies such as Mojang (computer games) and Spotify (music). It also has the second-largest venture capital industry as a proportion of GDP after the United Kingdom. Denmark dominates the world’s market in mink.

It is true that Norway is a bit more like the socialist paradise that the Scottish Nationalists imagine. But only a bit. Norway has donned its own version of a golden straitjacket by ensuring that it puts its oil wealth in a gigantic sovereign wealth fund  (valued at about £508 billion) rather than spending it on infrastructure or welfare. Norway is opening its welfare-state to welfare entrepreneurs: the new hospital in Oslo is being built with private money. It is also doing everything it can to promote private-sector entrepreneurs: private companies are selling Norway’s oil extraction skills across the world. Norway, just like the rest of Scandinavia, is much closer to Mrs Thatcher’s vision of an entrepreneurial society than to Olaf Palme’s vision of a socialist paradise.

Divorce is an expensive and painful business. People who are thinking of abandoning a long-standing spouse for a stranger are well advised to ask a couple of basic questions. Does the prospective partner feel the same way? And indeed is the prospective partner a real person or a figment of our fevered imagination? The Scottish National Party has failed to think seriously about either question.

• Adrian Wooldridge, who works for The Economist, is the co-author, together with John Micklethwait, of The Fourth Revolution: The Global Race to Reinvent the State (Penguin). He is due to speak at the Edinburgh International Book Festival today at 11:30am.