Prosperity in Welfare States
One of the great challenges of sustainable development is to combine society's desires for economic prosperity and social security. For decades economists and politicians have debated how to reconcile the undoubted power of markets with the reassuring protections of social insurance.
Not coincidentally, the low-tax, high-income countries are mostly English-speaking ones that share a direct historical lineage with 19th-century Britain and its theories of economic laissez-faire. These countries include Australia, Canada, Ireland, New Zealand, the U.K. and the U.S. The high-tax, high-income states are the Nordic social democracies, notably Denmark, Finland, Norway and Sweden, which have been governed by left-of-center social democratic parties for much or all of the post–World War II era. They combine a healthy respect for market forces with a strong commitment to antipoverty programs.
On average, the Nordic countries outperform the Anglo-Saxon ones on most measures of economic performance. Poverty rates are much lower there, and national income per working-age population is on average higher. Unemployment rates are roughly the same in both groups, just slightly higher in the Nordic countries. The budget situation is stronger in the Nordic group, with larger surpluses as a share of GDP.
Apparently, a welfare state can be well-off. This flies against the fact that the socialists in Sweden were recently voted out after 12 years in power because their economy wasn't doing so well. Despite this, Swedish economist Andreas Bergh points out:
...these nations make up for any deleterious effects of social programs on growth by taking advantage of globalization and by embracing the market economy in other areas.
And I thought globalization was evil. Finally, this article discusses how the cultures in Anglo-nations are against dole-bludgers. Reminds me of my days at Woolies when I was criticised for not working hard enough.