In Focus: Is Inequality Inevitable? The ‘Northern European Model’ Suggests Not
| Published date | 01 December 2023 |
| DOI | http://doi.org/10.1177/20419058231218321 |
| Author | Benjamin D. Hennig,Danny Dorling |
| Date | 01 December 2023 |
20 POLITICAL INSIGHT • DECEMBER 2023
In Focus
Is Inequality Inevitable?
The ‘Northern European
Model’ Suggests Not
The Nordic model of capitalism has
garnered substantial attention for
its approach to economic and social
organisation. While the ve Nordic
nations – Denmark, Finland, Iceland, Norway
and Sweden – may initially appear similar,
a more in-depth examination reveals great
dierences both between and within them
on a host of indices. The Nordic states remain
most similar in reporting much lower than
usual rates of income inequality. However, just
how low are these rates and how distinctive
are the ve countries today?
The Organization for Economic Co-
operation and Development (OECD) provides
valuable data on income inequality, shedding
light on the economic structures of various
nations. Their data shows the Nordic countries
clustered together due above all else to low
levels of income inequality, resulting in more
equitable economic conditions for their
citizens compared to many other auent
nations such as the UK, USA, Russia and Israel,
which have almost identical levels of high
income inequality. However, it's crucial to
acknowledge that the collection of consistent
data is predominantly undertaken by auent
countries.
Consequently, when we discuss dierent
models of capitalism, our focus primarily
revolves around the auent world. Here we
aim to provide a mainly European perspective.
One key takeaway from the available data is
the dynamic nature of capitalism. A look at
statistics on inequality over a short timeframe
may suggest that nothing substantial is
changing. However, when we broaden our
perspective and examine data spanning
from over a longer period, we can observe a
dierent narrative. Over this 14-year period, the
Nordic countries appear to have consistently
maintained economic equity.
Our timeframe represents just a fth of
normal human life expectancy, a fraction
of human history or even of more recent
economic history. The Nordic countries cover
a small part of the world's population. Indeed,
just how unusual are the Nordics? If we
look across Europe we can see another, less
cohesive, cluster of nations all exhibiting lower
income inequality than the most equitable
Nordic country, including Czechia, Slovakia
and Slovenia. This prompts the question of
why we don't consider these countries as a
similar model or template for a better world.
Dierences in shared history and
geographical proximity can be suggested, but
the latter cannot be the sole explanation, as
these countries are just as contiguous as the
Nordic nations. In contemporary discussions
concerning the Nordic model of capitalism,
it is crucial to acknowledge the increasing
similarities between these Northern European
countries and many other European nations,
including larger states such as France and
Germany. In terms of income inequality,
they are increasingly resembling the Nordic
countries.
So, is the term ‘Nordic model’ still suitable?
Perhaps we should consider rebranding it as
the ‘Northern European model’? The Nordic
ve are increasingly dissimilar from each
Benjamin D. Hennig and Danny Dorling examine the Nordic model
of capitalism, and find that its high levels of income equality can be
found across a broad swathe of Europe – but not the UK.
other while also gradually becoming part of a
broader group of 15 countries, encompassing
those slightly more and slightly less equitable.
In terms of population, this represents a more
substantial grouping, or ‘Nordic+.’
Within the Nordic+ cluster, there are
countries that share borders with remarkably
unequal states. Immediately to the west of
Nordic+ is the UK and to the east is Russia,
both characterised by high levels of inequality
and challenges for the less fortunate. Bulgaria,
the most unequal country in Europe, and
Turkey, which is even more unequal and
partially situated in Europe, bordering the
southeast. These countries also boast outsized
capital cities, further illustrating their historical
signicance as former centres of empires.
Other nearby countries without recent
imperial legacies, such as Estonia, Italy,
Portugal, Spain and Switzerland, are closer to
joining Nordic+ having only slightly higher
levels of inequality. Inclusion of these nations
would expand the group to a club of 20
countries, making it almost all of Europe.
This discussion also highlights the ever-
evolving nature of capitalism. Capitalism is
not a static ‘system’ but rather an ongoing
transformation, often challenging the human
imagination because of our lifespan. The
change is over a 400-year period, not within
one lifetime.
While some argue that capitalism is a
singular concept, it is becoming increasingly
apparent that we live in a world characterised
by plural capitalisms. These systems share
some ideological aspects but exhibit
substantial local variations. We are currently in
a phase where we are more attuned to these
distinctions, particularly between the United
States and Europe, where the disparities
have grown more pronounced. Growing
Political Insight December 2023 BU.indd 20Political Insight December 2023 BU.indd 20 10/11/2023 11:4010/11/2023 11:40
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