The Nordic countries are known for their welfare. But what happened to the discourse on the Nordic welfare state?
The words that are used to describe the phenomenon are a sign of the change that has been ongoing since the early 1990s. In the past three decades, the view of the welfare state as the consequence of a certain kind of politics has been abandoned. Instead, the Nordic identity and the Nordic countries have begun to be explained in cultural terms, says Academy Research Fellow Johan Strang of the University of Helsinki’s Centre for Nordic Studies (CENS).
“Politicians, researchers, research funders and the media rarely discuss the welfare state or the welfare society, but talk more generally about the Nordic brand or Nordic welfare and wellbeing. The Social Democratic model, which was still very much alive during the Cold War, has now been abandoned, and other explanations for Nordic success have been sought to replace it,” Strang says.
Why did this happen and where is the change visible? This is what Strang is currently exploring.
What happened 30 years ago?
The view of the Nordic welfare state as a cultural rather than a political phenomenon is connected to several changes that have their origins in the 1990s. According to Strang, the key question is what happened to the Nordic countries after the Cold War. It can generally be said that the upheaval of world politics caused a major identity crisis for the Nordic countries.
During the Cold War, before the 1990s, an ideological battle was being fought between socialism and capitalism. The model of the Nordic welfare state had been developed under the leadership of the Social Democrats through cooperation between the Nordic countries as of the 1930s. This cooperation and the shared political ideology explain the similarities between the countries’ social systems. The Nordic welfare model was seen as a compromise between the left and the right, or socialism and capitalism.
By the beginning of the 1990s, the Nordic countries were often seen abroad as representatives of an alternative global model characterised by peace, the Social Democratic welfare state and participatory democracy, including trade unions and civic movements. However, with the collapse of the Soviet Union, the end of the Cold War and the defeat of socialism by liberalism and capitalism, the Nordic countries struggled to find their place in the new world order.
“The Nordic countries lost their political identity,” Strang notes.
The question posed by Carl Bildt, then the Swedish prime minister, is instructive: “Who wants to be a compromise between a success [capitalism] and a historical disaster [socialism]?”
The recession of the 1990s also plunged the welfare state into a deep crisis in Finland and Sweden. Several support structures and systems were dismantled, often on a permanent basis.
When Finland and Sweden fell into a recession, they looked to the EU, thereby further eroding the Nordic identity.
“Most of the events that took place in Sweden in the 1990s also occurred in Finland, but with even more intensity. The economic recession was deeper in Finland because the country’s Eastern trade collapsed with the fall of the Soviet Union. The Finns committed more strongly to the EU because we felt a greater need to distance ourselves from our neighbour in the east,” Strang explains.
The fragmentation of the common Nordic base can also be attributed to the countries’ different political approaches to the EU. Finland was keen to get closer to the core of the EU, whereas many in Sweden opposed the EU. Denmark had already joined the Union in the 1970s, but Norway did not want to join at all. While Sweden and Finland were in a deep recession, Norway began to earn lucrative oil revenues and regained its national identity through the success of its athletes.
Although the Nordic countries have, in this respect, gone their separate ways, all of them experienced an identity crisis. Sweden’s struggles also affected its neighbours: as the guiding star of the north had faded, the other Nordic countries also felt lost.
When the Nordic model was then gradually rediscovered, it was no longer based on the Social Democratic middle-of-the-road framework. Both researchers and society at large stopped looking for explanations for Nordic welfare in the political power struggles of the past.
Instead, they began to seek cultural explanations for the special features of the Nordic countries, placing emphasis on Lutheranism, a state church, the concept of the free peasant and local democracy.
“A great deal of research relying on this tradition has been conducted, but the research probably also contributed to people beginning to see the welfare model as an almost apolitical creation.”
Cultural explanations benefit neoliberalism
According to Johan Strang, the definition of the Nordic countries as a cultural phenomenon has coincided with the rise of neoliberalism.
“The cultural model for explaining the welfare state has given more room for neoliberalism and populism. According to this explanation, we can make cuts to structures and forms of support as much as we want and still retain the welfare state because it’s in our genes and because the dominant system and politics have nothing to do with it.”
Also compatible with neoliberalism is the idea that the Nordic brand is easier to convert into products that can be sold abroad than the welfare state which is weighed down by ideological decisions and complicated structures. The demand for such exports has surged in recent years as the Nordic countries have been attracting interest through ranking at the top of several international comparisons measuring wellbeing, happiness and equality.
But the rise of neoliberalism has also provoked counter-reactions. The emergence of populist movements can be seen as one such response. Paradoxically, both neoliberals and populists explain the special nature of the Nordic countries with culture, but for different reasons.
“Professor Mary Hilson was probably the first to point out, in her book The Nordic Model, that it was no coincidence that while research has focused on cultural explanations of the welfare state, right-wing populist parties also see the Nordic welfare state as a phenomenon of culture and genetics and claim that closing borders is the only way to defend the welfare state. I believe that Hilson was right in her observation,” Strang states.
“If we say that the welfare state is a manifestation of Nordic culture, there is but a short step to claiming that people who move here from another region are incapable of understanding our welfare culture.”
But Strang says that the populists are guilty of faulty reasoning.
“The major fault in their argument is connected to the belief that culture is about genes or some other immutable characteristic and has simply always existed. Many forget that what we now call Nordic culture is a consequence of historical events and political decisions made in different periods. If all Nordic countries had had a non-socialist government in the 1930s when the development of the welfare state began, Nordic culture would be quite different today.”
However, Strang points out that a shift away from neoliberalism and towards the repoliticisation of the Nordic welfare state has been observed in recent years. In conjunction with the latest parliamentary elections in the Nordic countries, traditional political issues were discussed for the first time in a long while.
“The left/right distinction again emerged, and many politicians talked about taxes and welfare rather than immigration. The climate crisis was also framed more clearly as an issue of economic policy.”
The victories of the Social Democrats in the recent Finnish and Danish elections led to a change of government in both countries.
Traditional politics back in the spotlight?
What does the welfare state look like from a contemporary political perspective? According to Strang, a battle is being waged over the Nordic welfare state. Although everyone sings its praises, they emphasise different things.
“You could say that there are as many interpretations of the welfare state as there are political trends in our new, two-dimensional political landscape,” Strang notes.
On the left you find the socialist welfare state that stresses equality and solidarity, while on the right is the capitalist welfare state that stresses competitiveness and the necessity of baking the pie before sharing it. There is also the progressive welfare state represented by the Greens and the liberals as well as a national conservative interpretation that emphasises national identity and harks back to the ‘people’s home’ (folkhemmet) and a pastoral, pre-industrial idyll.
Although the welfare state may have returned to the political conversation, the traditional left/right axis used to make compromises easier. When cultural values are added to the mix, compromises become much harder. Strang ponders whether it is again time to emphasise the Nordic welfare state as an economic model.
“We are living in a time of major changes. It may be that in 30 years we will look back to the early 2020s as an equally groundbreaking period as the 1990s now appear to us. Both the academic and wider community are seeking new perspectives. I’m happy that I have the opportunity to participate in this work as a researcher,” Strang says.
Nordic countries shared best practices with each other even before the concept was established
The Nordic welfare state was formed by mutual interaction among the Nordic countries, which is why the social and welfare models of these countries are fairly similar.
Specialists in various fields and politicians are used to meeting, holding joint conferences and comparing systems and solutions with each other. Nordic legal scholars have been meeting since the 1870s, while experts in social policy have collaborated since the 1920s. From the 1950s onwards, the Nordic countries have concluded a range of cooperation agreements, such as a social security agreement, a labour market agreement and an agreement on passport freedom.
People have found it easy to move from one Nordic country to another, with the relatively similar functioning of societies being an important factor.
As the role of the European Union began assuming greater importance in Nordic politics in the 1990s, Nordic cooperation started to wane.
“As the previous cooperation ended, the countries made their own decisions. They began to go their separate ways in the 1990s when they failed to establish effective cooperation on issues involving Europe,” states Johan Strang.
However, he says that Nordic politicians have rediscovered Nordic cooperation in recent years, and there are signs that they wish to bolster such cooperation. Politicians are now keen to ensure that the countries do not drift too far apart and that they, for example, apply EU directives consistently. Strang considers this important.
“If we don’t cooperate, we will have not one Nordic model, but several national systems. The strengths of the Nordic countries have included a comparative approach and cooperative development. The Nordic countries shared best practices with each other even before the concept was established.”