I visited Iceland last month on business for about a week.
Iceland seems great statistically because there is no national underclass. Most Icelanders would be considered "middle class" today in the United States: some college, literate, aspiring to home ownership, and employed in services.
In every other country, the national statistics are skewed by some underemployed, undereducated, and often foreign "labor class" (or worse, welfare class). There is no "ghetto" in Iceland (though strangely, graffiti is everywhere). Why?
Because every modern nation was at one time "industrial," and industrial countries must import/create/preserve a labor class to work factories and plantations. But Iceland went from "frozen rock" to "modern service economy" in about 70 years.
I assure you that it's not a magical fairyland where everyone is happy. It's more like an American suburb of 250,000 (maybe in WA) where everyone is white and employed in an office... and a glacier/volcano/wind storm has trimmed away the unpleasant urban and rural elements and plunged them into the Arctic ocean.
Icelanders have the same hopes and strifes one would expect in such a suburb.
There's more to it than that, and the same goes for Norway. Sweden (ranking 6 on the 2007 index) has much of the same social structure as Iceland and Norway, but does not have the same availability of cheap energy. Sweden does have a fair amount of hydropower available, but you'll also find other countries in the top of the Human Development Index that do not have access to such luxuries.
Also, notice that the Middle East is nowhere near the top of the index. Having abundant natural resources certainly helps things along if a country has good leadership, but it is neither a necessary nor sufficient condition.
I wonder how the individual US states would fare if measured separately in such surveys. There really is a massive cultural and economic variance between them. McDonald's is everywhere, sure, but if you scratch the surface the differences can be vast. It's often misleading to try to generalize across the entire nation. Many of the tourists and exchanges students I've met here have mentioned how they didn't really appreciate the size and diversity of the nation until they experienced it for themselves.
This is cool, though I worry that people will conclude (as the Icelandic president has) that Iceland has "blended the best of Europe and the United States here, the Nordic welfare system with the American entrepreneurial spirit".
There are a lot of policies that work well with an ethnically homogeneous society of 313,000 people but completely fail on a larger scale. This scaling problem is the perennial defect of socialism. (Well, one of them, anyway.) In contrast, free markets appear to scale indefinitely, naturally finding the right business unit sizes along the way. (For example, for gourmet restaurants, it's ~1 restaurant; for fast food restaurants, it's a national or global branded chain.)
I suspect that the natural business unit size for much of Iceland's 'Nordic welfare system' is approximately 313,000 ethnically homogeneous people.
Over the last several decades I've been reading articles in the US/UK press of the "it's so glorious to live in Scandanavian welfare state X". The young whippersnappers that read HN won't remember these, of course. In the past, X was almost always Sweden. In Sweden and other Scandanavian countries there was always plenty of criticism of the US and its racial problems and how they didn't suffer any of those. Then they began to import non-Scandanavians and things changed. Malmo, Sweden now has the highest rape rate in the developed world.
Author Bruce Bawer, a political liberal, published a book critical of evangelical Christians years ago and then moved to Norway to marry his partner (they're gay). Here's what he werote a few weeks ago: (http://memo.brucebawer.com/)
"During the nine years and two weeks that I've lived in Oslo, I've seen the city change significantly -- for the worse. I don't remember exactly when it started reminding me of New York in the 1970s and 80s, but by now the resemblance is undeniable. Burglary, rape, gay-bashing, mugging, graffiti, vandalism: you name it, we've got it in spades, and it's still on the rise. Public stabbings and gang fights have become routine...The statistics are dire. Last month came news that the rate of reported crimes in Oslo is now four times that of New York; last week it emerged that Oslo's rape figures reached an all-time high in 2007; today it was reported that over 99 percent of street robberies in the city go unsolved. To any unblinkered individual who lives here, these statistics are no surprise. Yet civic authorities, faced with the steady erosion of law and order, exude indifference and ineffectuality."
As for Iceland, it elected a government in the late 1980's that enacted a number of free-market reforms and, by an amazing coincidence, the economy took off. "Much of the nation’s prosperity is the result of free-market policies, including a 36 percent flat tax on labor income, a 10 percent flat tax on capital income, and a corporate tax rate of just 18 percent (down from 50 percent at the end of the 1980s)." http://www.cato-at-liberty.org/2008/02/21/iceland-and-taiwan... Amazingly, The Guardian couldn't find space to mention any of that.
Regarding your final point, the article does mention it, though not in detail.
"I believe we have blended the best of Europe and the United States here, the Nordic welfare system with the American entrepreneurial spirit,' he said, pointing out that Iceland, unlike the other Nordic countries, had exceptionally low personal and corporate tax rates. 'This has meant not only that Icelandic companies stay and foreign ones come, but that we have increased by 20 per cent our tax revenue owing to increased turnover.'"
The article presents a pretty narrative, not a substantive account of different economic theories and their effects, but it does mention both the welfare state policies and the free-market ones, suggesting that choosing the best of both is what has improved Iceland. On the surface this seems sensible to me. The Nordic countries generally have better 'quality of life' than the US does, the US generally is stronger economically.
>> "The Nordic countries generally have better 'quality of life' than the US does, the US generally is stronger economically."
Iceland certainly sounds nice, if you could tolerate the weather. "Nordic countries" is too general to be useful, I think. I'm a bit sceptical about making the quality of life comparisons, in any case. While traveling in Turkey about 7 years ago, a Swedish woman told me that a software developer there takes home about $1,300/month on average (i.e., after taxes). Restaurants in Sweden are so expensive that hardly anyone eats out. Six years ago (while the dollar was still strong) a large pizza in downtown Oslo went for $60. Even business executives pack a lunch.
Norway is doing fine economically, since it has a tiny population and is the world's third largest exporter of oil (though that's running out). Given the explosion in crime that Bawer mentions (at much greater length in his book _While Europe Slept_, which was a finalist for the National Book Critics Cirlce Award), I think I'll find someplace else to hang. I've lived in Europe twice (Germany and Greece) and, while it had its points, it always felt sleepy to me.
I haven't lived in the countries in question, so I don't have any personal experience to go on. The only measures I have are the various indexes of quality of life and other academic studies. According those we have the following rankings:
Economist Quality of life index (2005):
Switzerland: 2
Norway: 3
Sweden: 5
Iceland: 7
Denmark: 9
Finland: 12
US: 13
UN Human Development Index (2007):
Iceland: 1
Norway: 2
Sweden: 6
Switzerland: 7
Finland: 11
US: 12
Denmark:14
All of these countries are quite rich by international standards, but their GDP per capita at PPP varies from a low of 29,650 in Sweden to a high of 41,529 in the US. The Nordic countries do better in their quality of life rank than their GDP per capita PPP rank, and the US does worse, (as does Canada, my home country, at least in the Economist survey). So all of these countries are doing just fine economically, whether they have oil reserves or not, and being rich certainly helps with 'quality of life' but it isn't the whole story.
What matters much more than a quality of life index or a measure of economic strength is happiness. This is a much tricker question, since it is subjective, culturally dependent, and personal. Historically happiness has been disregarded as an area for academic research, but over the past few years that has changed. The studies are still in their infancy, but what they tell us now is that different cultures value different things for their happiness (wow, shock, I know) such as personal success in the US, and family ties in Japan. The other finding I know of, which I find more surprising, is that trust seems to be the most important element in happiness.
I apologize for the lack of a link in advance, this is based on memory of a talk I attended last year. In a study done by a UBC researcher in Canada, based on census data and surveys done across the country, researchers measured interpersonal trust on a ten point scale, and recorded other factors such as wealth, relative wealth, personal safety, and so on. They found that a one point increase on the ten point scale in personal trust in your boss at work had a larger impact on happiness than doubling your salary.
They also found that trust in your neighbors was essential to happiness. Here the results get more interesting, because things that provided trust in neighbors was basically length of time you'd been neighbors, and speaking the same language. Any location facing rapid growth by in-migration has a risk in happiness and trust, and if that growth is international immigration by people who don't speak the same language trust is further at risk, as is happiness. If these results generalize beyond Canada, which they might not, I would expect countries which are rich, non-corrupt, and stable in their cultural composition to be happiest, which makes Iceland a good candidate for a high rank.
Regardless of the overall happiness of a country, moving there if you speak a different language, and value different things, is unlikely to make you or anyone else happy, at least in the short term. So wherever your personal values match up with local conditions, given a certain baseline of wealth and security, is likely to be the best place for you and just as likely to not be the best place for me regardless of any particular ranking.
Good point. Socialism doesn't scale. This is more of an issue about the size and homogenity of the population than any ingenious public policy. Unfortunately, living in a homogenous country isn't terribly exciting or stimulating.
Most of the points raised here about Iceland (my home country) and your so-called "socialism" apply equally well to Sweden, Norway and Denmark. Look them up in the happiness, education and economic statistics. They are multimillion populations that are doing quite nicely, "socialism" notwithstanding.
Honestly, both Sweden, Denmark and Norway have growing problems with influx of immigrants and refugees, who are unable to contribute, but nonetheless must be offered the same benefits as everyone else. This is creating a dangerous backlash.
To say that you can't generalize about work ethic and business integrity just shows a lack of experience. Please travel to the rest of the world.
The reason our countries are like this is what's been hinted at: Affluency and homogenous cultures. The real test of a society, in my opinion, is what happens when you have to adapt? When diverse groups join or sources of wealth become scarcer.
In this regard the American model has really proven itself: Let everyone in, but expect them to make it work for themselves instead of having everything handed to them. (Unfortunately, lately America is preferring the Fort Apache model.)
I'm one of those "immigrants" in Norway, and I seem to have been able to contribute just fine-- in fact, my start-up employees 30 people, most of them natives.
My reticence to generalize about work ethic and business integrity is not due to a lack of experience-- I have travelled a fair bit-- but because stereotyping based on anecdotal experience seems dangerous.
An immigrant, cool, which part of Somalia do you come from? I am very impressed that you adapted so well from being an illiterate sheep herder to a highly structured western society, and was even able to start your own company. Good job.
Joking aside. Highly skilled workers like yourself immigrating isn't the problem. People aren't racists, but they are also not blinded by ideology like people on the left (be kind to others) and right (free movement of people) who, for different reasons welcome unlimited immigration.
People who are anti-immigration are not necessarily racists, just like people who criticize Israels actions aren't necessarily anti-Semites. I personally feel that that type of argumentation poisons the discussion.
Wow, where did that come from? I'm not saying that all people who are "anti-immigration" are racist-- but some of them certainly are. I've seen my share of racism, without question.
In Norway, there is serious under-employment-- it is not possible to be "against immigration" per se; it's all a matter of degree.
Over-simplifying the positions ("people are not racist";"unlimited immigration") doesn't do the discussion any favors, either.
I apologize for being vague. First off, Scandinavia is not socialist. It is pragmatic, if anything. Secondly, when I said socialism doesn't scale I was thinking about countries with at least 20 million citizens. However, it seems likely that some of the policies employed in Scandinavia in general simply wouldn't apply to a country like the UK. It seems likely that larger populations are more difficult to organize, and one has to resort to a more "greedy" approach.
That said, Scandinavia is not all about homogenity and scale. It's also about culture: work-ethic, egalitarianism and a culture where people don't just screw each other over to make a fast buck.
20 million people is the maximum size for Scandinavian-style socialism? In that case, here's a suggestion-- why not divide the US into, say, fifty separate geographical administrative units?
(By the way: I live in Norway, and was recently screwed over big-time by Norwegians looking to make a fast buck. In my experience, the "work ethic" is far below that of hte US. But I wouldn't be too quick to generalize....)
That's how it used to be, but ever since the US Civil War the federal government has been gaining more and more power. States used to self-govern, no more. See the federal raids on legal medical marijuana caregivers and patients in California.
Yeah, that's why I thought 50 semi-independent units might do the trick. I figure one for the islands out in the Pacific, and one for the big chunk hanging off of Canada; and the other 48 can divide the piece between Canada and Mexico. I've even got cute names picked out, if you'd like to hear them...
I think the reason a "nation with one big budget and financial system" works better than "50 small budgets and systems in a confederacy" is that the smaller, poorer states benefit heavily from the bigger richer states. In general, taxpayers in rich states get back less than they pay in federal taxes, and the beneficiaries are poorer states, who get back more than they pay.
It's a good setup, because prosperity in one area can help the whole country, and it lessons the infighting among the states. A rising tide lifts all boats if you will. If one state suddenly goes from 'poor' to 'rich' (like Texas when oil became a big deal) then other states will automatically benefit.
The original confederacy under the Articles of Confederation resulted in a system where nothing got done, due to the lack of any federal executive power. The US Constitution was explicitly designed to balance the power of the federal and state interests.
Since the Civil War though, that balance has tipped towards the federal government retaining the power and authority over money.
The increase of executive power in the federal system is a two-edged sword. So is the large budget. It lends itself to inefficiencies in spending which are more easily remedied at a state or local level.
Oh, and third off: Scandinavia only refers to Denmark, Norway and Sweden. To include Iceland and Finland, which is what we're doing here, it's the Nordic countries.
Iceland also has the most discos per capita out of any country in Europe.
I've been to Iceland many years ago. The people I met during my brief stay there seemed as happy as anywhere else. Then again, I didn't meet many people because it was too cold to go out most of the time.
BTW, don't be fooled by this whole "iceland is warm and greenland is cold" thing. Iceland is very, very cold. There's nothing to break the wind on the volcanic lava...it was the coldest I've ever been.
And here I was thinking the Icelanders were so happy because they know they can take over the world with relative ease ala the Iceland strategem in Risk.
I wonder how to make it happen. I think in germany we now have laws that allow paternity leave for fathers and mothers alike. But if the father earns much more money than the mother, it still doesn't make sense economically for the father to stay at home.
EDIT: here on paternity leave, you get some money, but not your full salary.
"All parents, who do not enjoy full contractual salary rights from their employers are paid by the Maternity/Paternity Leave Fund after they have been active in the domestic labour market for six consecutive months prior to the first day of the maternity/paternity leave."
I kinda want to move to iceland after reading that. I've always seen pictures and wanted to visit, but It'd be fun to go and do research there or something.
I thought about the same thing. The University of Iceland apparently teaches its classes in Icelandic, but (from the website) the textbooks are mostly in English. Perhaps learning Icelandic and then doing a PhD might be a way to achieve that.
The Icelandic language is quite possibly one of, if not THE, most unique language I've ever heard spoken. I took a trip with my fiance out there a year or two ago and, while most people were glad to speak english to us, I was quite rapt whenever I could eavesdrop in on anyone speaking their native Icelandic. It's almost ... elvish?
Having said that, because of that fact I can't imagine the process of learning said language to be too too easy.
Good social development statistics doesn't mean the people are happy with their lives. As I see, the article takes the results for granted without any doubt and then speculates and searches for the reasons. I'd at least search for the polls that ask if the people are optimistic/pessimistic, consider themselves happy/unhappy.
Though, I believe, standing far from the noisy Europe, maybe far from the consumption rush, they may feel calm, happy and optimistic. That's great.
> "The study was lent some credibility by the finding that the Russians were the most unhappy."
Yes, if you assume the myth that life in Russia very unpleasant, the study gets credibility. On the other hand, in the year the study was made, other studies showed Russian population to be the most optimistic in the history, thanks to fast economic growth and, I think, to breaking the pessimistic soviet mentality.
'Paternity leave is the thing that made the difference for women's equality in this country.'
this makes such a huge difference, this is a not socialist vs. capitalist comparison - it is simply a matter of putting peoples needs before corporations.
"The study was lent some credibility by the finding that the Russians were the most unhappy."
...and the Guardian's credibility was ripped to shreds when turns out that Russia did NOT score lowest on the UN Human Development Index report (as seen at http://hdr.undp.org/en/statistics/)
Russia is number 67 out of 70 in the "highest development" section, and number 67 out of 177 total. Sorry, Guardian.
They weren't referring to the UN report when they said that the Russians are the most unhappy. They were instead referring to a separate "seemingly serious academic study", which supposedly attempts to gauge the "happiness" of each of the nationalities.
Isn't that always the way with mainstream press - either a) you look into a subject or b) you know about subject, and you find in all cases they are far from correct.
I would almost think that the mainstream press is badly wrong 90% of the time. How does that effect our world view?
"The study was lent some credibility by the finding that the Russians were the most unhappy"
I've always thought most unhappy people live in China, India, Pakistan and such...
The statement above shows that happiness is mostly depending on culture. I personally found Russian culture and way of perceiving the world too depressive.
You wont be happy if you just move to Iceland. Learning Icelander's style of world perceiving is necessary. Could you?
No. Islandic is closest to old norse, proto-north-germanic. Anyone from Scandinavia can pick it up relatively easily. Other Germanic languages such as English are not so far removed either.
It's all just a bunch of what Barack Obama would call "typical white people". There are 743 Filipinos! Can you imagine that being the largest "diverse" subset of a population in any other country? I sure can't. Perhaps the United Nations should send a commission on human rights to see what kind of discriminatory migration policies Iceland has enacted.
Needs? What benefit would Iceland get from more diversity?
Iceland's success proves that diversity is not necessary for their level of success. If you want to argue that they'd do better with more diversity, you get to provide relevant examples.
Or, are you suggesting that Iceland is obligated to do worse to have diversity?
You win! I'll say this in my defense though: The causes of happiness are so foggy that, really, anything goes when coming up with wherefores. No surprise that a socialist rag determined that socialism is the answer.
Iceland seems great statistically because there is no national underclass. Most Icelanders would be considered "middle class" today in the United States: some college, literate, aspiring to home ownership, and employed in services.
In every other country, the national statistics are skewed by some underemployed, undereducated, and often foreign "labor class" (or worse, welfare class). There is no "ghetto" in Iceland (though strangely, graffiti is everywhere). Why?
Because every modern nation was at one time "industrial," and industrial countries must import/create/preserve a labor class to work factories and plantations. But Iceland went from "frozen rock" to "modern service economy" in about 70 years.
I assure you that it's not a magical fairyland where everyone is happy. It's more like an American suburb of 250,000 (maybe in WA) where everyone is white and employed in an office... and a glacier/volcano/wind storm has trimmed away the unpleasant urban and rural elements and plunged them into the Arctic ocean.
Icelanders have the same hopes and strifes one would expect in such a suburb.