Model worth emulating

President Donald Trump is desperate to disparage the Scandinavian model – to the extent of propagating “fake news” of attack in Sweden as a result of its liberal immigration system. Picture: Susan Walsh / AP

President Donald Trump is desperate to disparage the Scandinavian model – to the extent of propagating “fake news” of attack in Sweden as a result of its liberal immigration system. Picture: Susan Walsh / AP

Published Feb 24, 2017

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Scandinavian countries seem to have struck the right balance in managing inequalities, results of global competition, writes Shannon Ebrahim.

Globalisation and Islam are increasingly blamed for the ills of the struggling middle classes in the West. Marine Le Pen’s battle cry as she campaigns for the French presidency is “financial globalisation and Islamist globalisation are helping each other out.” While these declarations garner votes from the frustrated middle classes, the blame is misplaced and will fail to move us forward.

This formed part of the message that Lord Peter Hain brought to South Africa last week in an address he gave at Wits University on Trump, Brexit and Globalisation. Hain moved to Britain from South Africa as a teenager, and was a noted anti-apartheid campaigner.

After a long career as a politician in the British Labour Party, he is now in the House of Lords.

Hain believes the decision to leave the EU by British voters was a rejection of globalisation, and will be deeply destabilising for Britain and Europe.

Populist politicians across the Western world are denouncing globalisation without offering viable means to manage what is an irreversible process. Globalisation is the reality we will have to live with for generations to come, as technology has ensured that we can no longer retreat from the reality of the global village. The world is becoming more interdependent not less, and protectionism will only make national economic crises worse.

What the West needs instead, is to adopt the Scandinavian model of ethnic tolerance, inclusivity, and a strong state that will provide protection for those who have not reaped the benefits of globalisation.

In Scandinavia, strong social safety nets do not undermine labour markets or productivity. Emphasis on education and re-training have reaped handsome rewards and immigrants and refugees have brought much-needed entrepreneurial innovation. This has been Germany’s experience as well.

US President Donald Trump is so desperate to disparage the Scandinavian model that he engaged this week in the propagation of “fake news” that he claims to deride, saying Sweden had just suffered a terrorist attack as a result of its liberal immigration system. No such attack ever occurred, leaving the world stunned that the leader of the world’s superpower could manufacture news about such false events in an attempt to validate his reactionary policies.

There is no question that globalisation has brought about inequality, has been associated with low wages, insecure employment and stateless corporations. But as Hain reminded us last week, what has squeezed living standards is austerity measures, a lack of adequate social security and slow growth.

It is the neo-liberal ideology that has dominated the policies of the EU that is at fault, as it ruled out serious efforts at redistribution and imposed harsh austerity measures. But the solution that British Prime Minister Theresa May and Trump purport – of deregulating the free market and lowering taxes – will only make the situation of the middle classes worse.

I fully concur with Hain when he argues that we can’t turn our backs on globalisation, but we can find ways to share the gains fairly. The solution is to revive the role of the state in acting on behalf of society to promote the common good. The West needs to abandon austerity policies, and urgently needs public investment in housing, infrastructure, social safety nets, education and skills. Trade protectionism is not the answer in the age of globalisation. Even when it was invoked in the 1930s in response to the Great Depression, it only made the depression worse.

Scandinavian countries seem to have struck the right balance in managing the inequalities inherent in the global capitalist system, and the consequences of global competition which leaves massive unemployment in its wake.

As Hain has warned, it is ultimately the global elites that must respond and ensure that government policies are changed.

It is not acceptable that the top 10% of earners have done very well while the other 90% have struggled. Britain and America are richer than they ever have been, but average working people do not have decent pensions or houses. Even IMF chief Christine Lagarde has acknowledged that there is an urgent need for action to tackle the middle class crisis, as inequality and a lack of hope is fuelling populism.

According to Peter Mandelson, the former European Commissioner for Trade, globalisation does not make strong social protections untenable, if anything it makes them more essential. The flexicurity models of Scandinavia – enabling workers to participate in the labour market and move confidently between jobs – have kept unemployment levels low. Taxpayer funds – spent to protect citizens against life-destroying unemployment or ill health – hedges against higher costs of long-term unemployment.

* Shannon Ebrahim is Independent Media's foreign editor.

** The views expressed here are not necessarily those of Independent Media.

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