What exactly is the Nordic model?

Before more articles appear like the Jeffrey Sachs article I pulled apart in my last post I think it is important for people to realize that this socalled Nordic model is not anything particularly unique to the Nordic countries.

Just about every single EU country follows it. Canada follows it, the US (to an extent) follows it, Japan, Australia, Singapore, New Zealand and many Latin American and Caribbean countries follow it. In most cases they have been obvious failures like Panama’s Caja de Seguro Social swindle, but there is not one example of a welfare state that isn’t rotting away somewhere in the core.

What is true of almost all of these “Nordic Models” is that they were designed as a pyramid scheme. Pyramid schemes are games or “investments” where payout is provided to early entrants based on pay ins by late entrants. The payouts to players/”investors” are paid entirely by the growth of new members. Pyramid schemes collapse when there aren’t enough new members to maintain payments to old members.

The Nordic Model depended on two things. A growth economy and a growing population. The Nordic countries currently have shrinking populations and only a slight growth.

What does this mean throughout the Nordic Model world? These systems are obviously failing. It is hard to do something about it because large groups of people (the baby boomers) are hitting payout time, but very few people are there to become new members to pay them. Obviously the same people who are already retired or reaching retirement age are the very same people who voted for the pyramid system in the first place. They still maintain control with their vote, so there is little to do for the young generation but pay the older and somehow figure out what to do for them selves in the future.

Many young people in Denmark are now taking the attitude of why should I work to pay for them? In Panama as well, most young people prefer working freelance so they don’t have to pay to the Caja Seguro Social for these very same reasons. They know they will never see a penny of what they pay.

So lets forget about this god damn Nordic model or the UK model, the Canada model, the FDR model, the LBJ model, the Caja Seguro Social model or whatever. Call it what it really is, the Pyramid model.