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Prosperity Ahead: Sweden’s Past Points Minnesota Forward

July 20, 2010 By Lee Egerstrom, Economic Development Fellow
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Minnesotans should draw on ancestral and immigrant ties to Sweden to find ways to rebuild the economy after the Great Recession, just as an earlier generation of Americans did 80 years ago during the Great Depression.

This is argued in the accompanying report, Prosperity Ahead: Sweden's Past Points Minnesota Forward. It recommends ways Minnesotans can shape a new, prosperous economy and society in the days and years ahead by adapting models now found in Sweden and throughout Northern Europe.

Back during the Great Depression, American author and journalist Marquis Childs wrote Sweden: The Middle Way (1936), a best selling book that brought attention to what Sweden was doing to avoid the worst ravishes of the global depression. It influenced President Franklin D. Roosevelt and Congress, and contemporary leaders in Europe and the United States are still drawing on that experience to cope with the current financial crisis.

But Scandinavian scholars in Europe and at Gustavus Adolphus College in Minnesota note that Sweden's successful public policies came second; first, there was agreement on a cultural approach to meeting societal needs for all citizens. This concept, called folkhemmet, or "the people's home," meant that Swedish political parties and interest groups swore off alignments with international movements and extremes of capitalism and communism then emerging in Europe.

What resulted was a "Middle Way" approach that combined safety net protections for people and institutions within Sweden even as its business and industry remained dependent on international trade. This dual approach to markets has been duplicated throughout Northern Europe, and variant forms of the Swedish model can be found in Norway, Denmark, Finland, the Netherlands and post-reunification Germany.

These countries now enjoy among the highest standards of living in the world, by various international measures. Poverty has been eliminated; health care and educational opportunities are available for all, and international business studies show these countries have policies that assist entrepreneurs and cooperatives to start and operate ventures more easily than in the United States.

For these reasons, the report calls on Minnesotans to adopt a "Minnesota Way" approach to guide public policy and societal behavior going forward, to make Minnesota a "home for the people" and for business in the coming, post-recession period.

Drawing on our historic ties to Northern Europe, Minnesotans should demand that their public officials adhere to five criteria:

  • No special interest pledges, such as tax giveaways to interest groups that prevent sound public policies.
  • Folkhemmet impact statements, just like environmental impact statements, to determine how proposed public policies will impact people's lives and opportunities.
  • Anticipate consequences, to insure that public policies neither enhance nor harm some people at the expense of others.
  • Rationalize resources for common good, recognizing that Minnesota doesn't have unlimited resources to operate within legal limits of state and local governments' authority.
  • Encourage entrepreneurship and cooperative development, building on our ties to Northern Europe. It's already apparent in our use of cooperative business models and in creative entrepreneurship for developing new products and technologies.
Even the most conservative among us should be able to recognize economic benefits for choosing a Minnesota Way patterned after Northern Europe's experiences. The Minnesota economy closely tracks with the larger U.S. economy; 70 percent of U.S. Gross Domestic Product (GDP) is based on individual and household consumption.

Poverty in our presence is not good for business. Denied educational and health care opportunities deprive us all of commerce, labor and entrepreneurial development. What the Nordic countries have taught us is that we can all grow together, or fight over what remains of a shrinking economy.


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