“The Nordic model is a term coined to capture the unique
combination of free market capitalism and social benefits that have given rise
to a society that enjoys a host of top-quality services, including free
education and free healthcare, as well as generous, guaranteed pension payments
for retirees." [1]
The Scandinavian model of capitalism followed by Denmark,
Finland, Norway, Iceland, Greenland, Faroe Islands and Sweden is called the “Nordic
capitalism’ or ‘Nordic social democracy’. The model is characterized by a
socialist as well as a capitalist structure. An emphasis on social welfare,
high rate of taxes, public and private spending on R&D, childcare,
education and promotion of labor market institutions such as labor unions are
the socialist features, whereas, low levels of government intervention in markets,
greater monetary and financial freedom, low levels of regulation, low levels of nationalization
of industry, as well as less barriers to free trade are the capitalist
features. The level of development and standard of living varies within these
countries, but, it is widely observed that income inequalities are lower in
Scandinavian countries as compared to countries in the rest of the world such
as some European countries, there is low poverty and a higher standard of living.
We can thus, say that Scandinavian model puts Keynes theory of
Third Way in to practice to a great extent where the left wing social policies
and right wing economic polices are merged together . However, it is crucial to
analyze whether other countries around the world can follow this model given the
demographics, resources and cultural norms that vary around the world.
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