Can Scandinavian Economies Survive Globalization?


Politicians in Scandinavian countries should go on vacation for six months to study the impact of global digital economy on respective countries, says Lene Rachel Andersen the co-author of The Nordic Secret and the director of Next Scandinavia. She indicates, otherwise there is a threat to the sovereign nation states’ political freedom and in sustaining the economic models where public welfare and social obligations of the state are paramount.

“The Danes buy twice as much online outside of Denmark than the rest of the world buys online in Denmark,” Lene Rachel Andersen says. “Citizens in Denmark send twice as much as money out of Denmark through internet than the Danish companies make on global trade bought on Danish websites. So that is not sustainable.” She points out that the 27 million Scandinavians are spending money on global market via online but not making money on global market then this can affect the domestic economies in the future and in sustaining the welfare economies built by taxpayers. She says, “We do not have a model for that, it just doesn’t exist in the political debate and in the public sphere as the topic for discussion.” In an interview with she expresses her dismay over lack of debate on this issue in the public sphere especially among the political parties and politicians and partly blames the media for failing to highlight the impact of global digital economy on domestic markets. She says if this continues, the countries will end up sacrificing their political freedoms to global companies both online and offline.

The Nordic Secret: A European Story of Beauty and Freedom is written by Lene Rachel Andersen and Tomas Björkman. The book is receiving critical acclaim for the authors and the attention of political establishments across the (Scandinavian and) Nordic countries and other parts of the world in addition to academia. Tomas Björkman is the founder of Ekskäret Foundation consisting of future-oriented thinkers and change-makers.

INABILITY TO FORESEE A FUTURE: Lene Rachel Andersen identifies that the Scandinavian countries are not gearing up for the future that will be dictated by digitization and flight of capital and flight of profits of global companies operating in the domestic economies. “The way things are going right now we are not really preparing for the future. We are really good at handling industrialized societies and industrialised economies but technological development is changing everything. To follow the track around now it doesn’t look bright now but we have the best circumstances … knowledge and educational systems available to actually gear up for the future.”

“The way we understand welfare state is based on workers and capitalists and middle class being citizens in the same sovereign nation state and you have your welfare social services, welfare payments, tax for retirements within the same nation state,” notes Lene. “The capitalists in the industrialized nation states were making their money their profit in the same economy paying their taxes where they were living as citizens and that’s how it worked until twenty or thirty years ago… now the capital is global. The profit they make is not necessarily coming back into the society where the profit is made. We do not have any models for that. So we need to have global institutions, at least stronger continental institutions that can handle and ensure where everybody pays their fair share of taxes of the money.”

GLOBALIZATION IS A REALITY: Flight of profits made out of capital investment or taking away the profits on global digital sphere to the respective company or country is a reality. In this background, Lene observes that selling political freedoms to markets is also happening. She says the countries (nation states) are selling the infrastructure services such as public transport, power and energy supply among others to private international companies and ending up not owning any infrastructure anymore.

IMMIGRANTS SHOULD BE PART OF WELFARE CONTRIBUTIONS: Lene says she is not against immigrants and immigration but there should be ways to make them part of the contributions for the welfare state. “Now the money is global, lot of the workforce is global and but we can’t have open borders and welfare state that is tax-based because who is going to pay for all those immigrants. This matters if you are leaving the country and like paid taxes for twenty years and then you move somewhere else where you are not part of that welfare state or we have a welfare state here and people coming here from non-welfare state and have not been adding money to the system. So the welfare state works when it is a sovereign nation state of the industrialized era – unless we re-think the welfare model and how you become a member of the receiving side. You have to be part of the paying side of the welfare system as well … and we have not figured out that yet … and I am not saying you cannot do that or you should stop immigration.”

The author says that the governments should take note and set out measures for these ‘old fashioned industrialised economies’ where once goods and services were taxed at the borders and price difference between domestic goods and foreign goods were identified but this is not the case in an era of borderless borders and global digital economy.

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The Nordic Secret