The Transformation of the Nordic Models

Abstract

With reference to an extensive comparative study of the Nordic economic political models, this article discusses some perspectives for the 1990s. Five economic political models developed as the Nordic area was integrated into the postwar world economy. They emerged as the Nordic countries — on the basis of their specific geo-economic and political-institutional conditions — emulated the Fordist growth model, which originated in the US. The downturn of the Western world economy was a crisis for the Fordist mass consumption/mass production model. We trace the consequences of this crisis for the Nordic models. Policy makers first tried to maintain the established routines of the 1960s, but failed, fumbled and finally turned to more austere, neo liberal economic policies. As a result, there seems to be a certain convergence between the five models, a specific Nordic version of neo-liberalism. Despite this, we doubt that continued neoliberal policies will prove able to cope with the challenges that the Nordic countries face as the world heads into the 1990s. Neoliberal policies aim to promote flexibility by reducing the impact of the state, by liberalizing labour markets and by relying on full integration within the world economy. Alternatively, we argue in our last section that policies should aim to promote flexible specialization by making the welfare state a comparative advantage in connection with industrial policies, by extending efforts at democratization of decisions concerning labour process organ ization and work environment, and by stimulating Nordic integration.