Calm, classless, striving for beauty: Yes, Scandinavia really is all it's cracked up to be

British commentators have been dismissing Scandinavian culture and politics using selective statistics and un-contextualised observations. But from smart young people to art and happiness: the qualities of Nordic life are well established.

Maybe it’s just sour grapes. I’ve been waiting years for a beautiful Scandinavian to whisk me off my feet and suggest we return to her homeland to live happily ever after, and it seems to have happened to Michael Booth by accident. And yet I couldn’t help feeling Booth’s lambasting of Denmark, Finland, Sweden and Norway in his "grim truth" assessment of life in the Nordic countries was more than a little cynical.

Booth was doing nothing more than indulging the time-honoured tradition of deflating something that’s been over-hyped – even if he did so via a smörgåsbord of selective statistics and un-contextualised observations. And he’s not alone. Those who believe our interest in Scandinavian ideals has gone too far have some potent new ammunition to play with: riots in Sweden, the downgrading of Finland’s education system and Norway’s excessive wealth wrought from its natural resources are all sticks with which we can beat those conceited Scandinavians, attempting to re-boot our own sense of moral worth in the process.

Most Finns and Scandinavians would feel pretty uneasy if they knew how their countries were so idolised elsewhere. Which is a good thing. Booth isn’t the first to cite the Nordic unease with "displays of success, ambition and wealth" as a weakness and he won’t be the last. But it’s precisely those qualities – yes, qualities – which give the Nordic countries their egalitarian atmosphere, entrenched liberalism and distinct lack of a ruling class in politics, the media and elsewhere.

History would suggest it isn’t a new thing. The Nordic countries were among the first in Europe to abolish the death penalty, give votes to women, legalise gay marriage and reach something like a consensus on green issues. Then there’s the inbuilt regard for foreigners. I was gobsmacked when I sat sweating in a Norwegian sauna a few years ago only for the wooden box to be overrun by a group of unruly teenagers on the equivalent of a stag weekend. When they’d done with the headlocks and towel-whips, they introduced themselves to me one by one, shaking me by the hand, welcoming me to their country, and offering me a potted history of the small town we were in.

Sure, that’s another un-contextualised observation. But the difference is, in the UK we’re taught to assume certain styles of behaviour will be forthcoming only from certain sectors of society. In the Nordic countries – particularly in Norway and Finland where there’s no discernable class system and private education is virtually non-existent – what you see is what you get: a society in which everyone really is in it together. The so-called "Nordic Model" of high taxes, principled social welfare provision and high community spending may be under strain (despite the gloomy reports, Scandinavian countries still accept a higher per capita proportion of immigrants and refugees than the vast majority of their European counterparts, and according to the 2013 European Social Survey those immigrants feel more welcomed, too) but the fact that the Nordic Model remains in operation is inseparable from that sense of togetherness.

Such "togetherness" might be indescribable, but it’s the indescribable qualities of the Nordic spirit that don’t show up on those statistics the Scandi-bashers love to cite. We talk of smart Nordic design as if it’s a commodity tied to wealth and status. But a striving for beauty is a central, instinctive and classless Nordic ideal induced by so many factors including hostile weather and a sometimes lonely exploration of what it is to be a human. It’s all over the place up there: from the emancipated typeface on railway station signage to the modernist domestic furniture and proliferation of bold architecture. These things aren’t about social signaling or financial security. They’re about making life fundamentally more sensible, and their residue is what we’d optimistically call civilization.

Which in turn might explain why Scandinavians are among the happiest people on the planet. Social security and an emphasis on creativity (and major government support for the arts) make for the very opposite of the repression described by Booth. They actually create societies in which people are content because they have a voice and are willing to use it. True, many in Norway are uneasy with the country’s huge wealth, but that wealth has been consciously placed in the public domain by the Norwegian government – so everyone can benefit, yes, but also so everyone feels involved in the discussion. When I was in Stavanger in September, a spontaneous and open debate broke out in a café on the subject of oil wealth, corrupting capitalism and damage to the environment. Naturally, it was conducted in English for the benefit of the one non-Norwegian speaker in the room (me).

And now the political dialogue has its ugly side. UKIP equivalents have found themselves with support in Norway and Finland, and only a fool would dismiss their rise as transitory. Sweden’s failure to integrate its large immigrant population is more connected to technical detail than cultural will, but it is a failure nonetheless. The debate appears more raw because these are countries in which authority is naturally questioned, democracy is cleaved-to and voter engagement and activism is unusually high. The Nordic people – in the case of Norway and Finland, a young people occupying young countries which have changed fast in the last decade – voice their opinions in plain terms; sometimes it’s ugly, never is it avoided.

And rarely, in truth, does it embrace the ignorant and prejudiced. You can observe unsightly political posturing in the Nordic countries, you can even knock Finland for having dropped a few places in the worldwide educational leagues (though it still has the best schools in Europe according to the Pisa rankings). But recent political history does not a fair overview make. The Nordic countries are still the best examples of progressive societies in Europe, and it’s something you feel even more than you clock from statistics. I wouldn’t mind betting that progressiveness will overcome political fads, because it’s hard-wired into the way Danes, Norwegians, Swedes, Finns and even Icelanders carry themselves – in their natural modesty, their intense connection to the earth and their remarkable dance with capitalism which sees them touched by it but absolutely not defined by it. Spend some time in the Nordic countries and you may notice those things. You might also discover that Finns are more talkative, Norwegians less xenophobic and Swedes more emotionally open than their stereotypes would suggest ... and that there’s a little more to quality Danish TV than just The Killing.

Andrew Mellor is editor of Nordic culture website Moose Report, moosereport.net 

Swedish youth: polite and politically engaged. Photograph: Getty Images.
Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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