Thursday, August 30, 2018

No Utopia but are Nordic countries happiness superpowers?

Top 10, World Happiness Report, Better Life Index and Social Progress Index 

Sir Thomas More (1478-1535), the English lawyer, scholar, writer, member of parliament and chancellor in the reign of Henry VIII, who died by public execution, was the first person to write of a 'utopia', a word used to describe a perfect imaginary world. According to the British Library, More's book, 'Utopia' imagines a complex, self-contained community set on an island, in which people share a common culture and way of life. He coined the word 'utopia' from the Greek ou-topos meaning 'no place' or 'nowhere.'

Nordic countries in particular, Denmark, Finland, Norway, and Sweden, are often cited for their quality of life, material standard of living, strong economies, work-life balance, high entrepreneurship, education, low inequality, transparency and high participation in politics coupled with low levels of corruption.

The region has a population of about 25m people including Icelanders and this month the *Nordic Council of Ministers published a report compiled by the Happiness Research Institute, on persistent high positions in world happiness rankings. It shows that happiness is by no means a given for all. "On the contrary, happiness in all of the Nordic countries is unevenly distributed; an average for all age groups reveals that 12.3% of Nordic citizens do not perceive themselves to be happy."

Also in August, an ignorant Fox Business Network host named Trish Regan warned of the dangers of socialism citing Denmark along with Venezuela. 

“But you know what? Democrats say ‘we’re not talking about Venezuela’ when they talk about socialism, they say ‘we’re talking about Denmark!’,” Regan goes on to say, before continuing, “as Shakespeare said, ‘there’s something rotten in Denmark’”— the correct quote is "Something is rotten in the state of Denmark" (Marcellus says to Horatio in 'Hamlet.')

“Denmark’s freebies are anything but free,” the cable news host said before claiming the Scandinavian country’s “top federal tax rate [sic.]” is 56%.

“In other words, everyone in Denmark is working for the government!” Regan then claimed.

According to the Local dk news service, while taxes in the Scandinavian country were last year reported to be the highest of any developed country by the OECD’s economic think-tank, they are not as high as reported by Fox Business.

Top earners — those with an annual income of over 542,283 kroner — pay an increased tax rate known as topskat on earnings over this amount, which can take taxation over 50% on top-end earnings (but is still not the overall income tax rate).

The average total income tax is around 34% of earnings, according to Danish Ministry of Tax figures from 2016.

Kristian Jensen, the Danish finance minister tweeted:

According to the ‘In the Shadow of Happiness’ report for the Nordic Council of Ministers, the least happy groups are those aged between 18 and 23, and the elderly above 80 years of age, in which 14 and 16%, respectively, state that they are not happy. Psychological problems are the main reason why young people describe themselves as struggling or suffering, and the overall pattern is that this applies more to young women than to young men. This is true of all the Nordic countries with the exception of Denmark, where young men dominate the picture.

“We expected to see that differences in physical and mental health would have the greatest impact on well-being, but I was very surprised to see that the influence was so much greater than that of income level or work,” says Michael Birkjær, an analyst at the Happiness Research Institute.

Another group who are often struggling or suffering are the unemployed. Every third unemployed person is not thriving in the Nordic countries; among those in work, this applies to every tenth person. Men, in particular, tend to be hard hit when they are unemployed.

Of the five individual countries included in the study, Denmark tops the report, with a full 91.9% of respondents ‘thriving’ — defined as rating their life satisfaction between seven and ten on the scale.

Sweden has the biggest number of unhappy people. According to the report, 4.6% of Swedes are ‘suffering’ while another 10.3% are ‘struggling’. Both figures are above the Nordic-wide average and almost 15% of Swedes who are ‘struggling’ or ‘suffering’ is almost double the rate in Denmark.

The report notes:

"Since the Bretton Woods Conference in 1944 (when it was agreed to establish the International Monetary Fund (IMF) and the World Bank), it has been common practice to interpret an increase in a country’s gross domestic product (GDP) as the equivalent to an increase in the welfare and development of a country. However, within the past few years a new approach has been adopted to determine the level of progress: Since 2012, both the UN and the OECD have chosen to break with the historic one-dimensional economic approach, and have instead chosen to include progress in subjective well-being as a measure of a country’s welfare and development. These calculations are based, inter alia, on the population’s subjective experience of happiness and quality of life."

World happiness and Dystopia

The World Happiness Report began in 2012 as a United Nations project, and while there is no Utopia in the world, there are Dystopias. 

Factors tracked are real GDP per capita, generosity, healthy life expectancy, caring, honesty, social support, freedom to make life choices, good governance and perceptions of corruption. These variables are measured on a scale running from 0 to 10. The parameters are tracked over time and compared against data collected from other countries. Each country is also compared against Dystopia, an imaginary nation that represents the lowest national averages for each key parameter.

This year Finland takes the top spot as the happiest country as measured by surveys undertaken by Gallup from 2015-2017. Rounding out the rest of the top ten in order of overall happiness are Norway, Denmark, Iceland, Switzerland, Netherlands, Canada, New Zealand, Sweden, and Australia. The US ranked 18th, dropping down four spots from last year. In addition, Finland’s immigrants are also the happiest immigrant population in the world, based on the available data from 117 countries. World Happiness Report 2018

“Governments are increasingly using indicators of happiness to inform their policy-making decisions,” notes co-editor Prof Jeffrey D. Sachs of Columbia University. “US policymakers should take note. The US happiness ranking is falling, in part because of the ongoing epidemics of obesity, substance abuse, and untreated depression.”

The World Happiness Report 2018, ranks 156 countries by their happiness levels, and 117 countries by the happiness of their immigrants.

“The most striking finding of the report is the remarkable consistency between the happiness of immigrants and the locally born,” said co-editor Prof John Helliwell of the University of British Columbia. All of the top ten countries for overall happiness 2015-2017 are in the top 11 countries for immigrant happiness based on surveys covering 2005-2015. 

Burundi is last at rank 156 and Ireland is at rank 14 ahead of Germany. Singapore and Malaysia at 34 and 35 are ahead of Spain. Italy is at 47 and Japan at 54.

Ireland's GDP per capita at $62,400 (2011 international dollars adjusted for price differences) is 7th highest in the world ahead of Switzerland but more accurate Irish data would be similar to UK's GDP per capita ranking of 23 ($39,000). The UK has an overall ranking of 19.

While material prosperity is very important for well-being, there are countries e.g. the US and Japan, that are both richer than the Nordic countries and at the same time less happy.

Consumption of antidepressant drugs has doubled in OECD countries between 2000 and 2015. The Health at a Glance 2017 report says this may reflect improved recognition of depression, availability of therapies, guidelines and changes in patient and provider attitudes (Mars et al., 2017). However, there is significant variation in consumption of antidepressants between countries. Iceland reports the highest level of consumption of antidepressants in 2015, twice the OECD average, followed by Australia, Portugal and the United Kingdom. Latvia, Korea and Estonia report the lowest consumption levels of antidepressants.

There are no data for the United States and Ireland.

The Irish Times reported last April that Dr Matthew Sadlier, consultant psychiatrist to the Dublin north city mental health service, said that there was a lack of firm data regarding about 3m private patients in Ireland while about 390,000 out of about 1.6m people covered by the medical card scheme were being prescribed antidepressants.

High Nordic rankings in range of measures

The chart on top shows that the OECD’s Better Life Index and the Social Progress Index from the Social Progress Imperative, have  Nordic countries consistently ranked among the top ten countries in the world. 

Ireland was at rank 15 and 11  in the respective indexes.

Sweden is one of the top performers for tech startups. This is a 2017 report from The Atlantic

[Sweden excels in promoting the formation of ambitious new businesses, on a level that’s unexpected for a country whose population of roughly 10 million puts it at 89th in the world in population size. Global companies like Spotify, the music-streaming service; Klarna, the online-payment firm; and King, the gaming company, were all founded here. Stockholm produces the second-highest number of billion-dollar tech companies per capita, after Silicon Valley, and in Sweden overall, there are 20 startups—here defined as companies of any size that have been around for at most three years—per 1,000 employees, compared to just five in the United States, according to data from the Organization for Economic Cooperation and Development (OECD). “What you see is that start-ups have a high survival rate in Sweden, and they have relatively fast growth,” Flavio Calvino, an OECD economist, told me. Sweden also ranks highest in the developed world when it comes to perceptions of opportunity: Around 65% of Swedes aged 18 to 64 think there are good opportunities to start a firm where they live, compared to just 47% of Americans in that age group.] 

Finland, Denmark, and Norway are also active in new business firm creation.

What American critics don't get is that they think the welfare state is just support for low-income people. In Scandinavia, the good work-life balance coupled with free education and healthcare, support entrepreneurship by giving workers an incentive to leave a good paying job.

In contrast with Ireland, they also have robust occupational pension systems.

The UK Independent writes that for Sam Manaberi, founder of Gothenburg-based startup Trine, "Sweden’s social safety net and wealth equality are at the very heart of what makes his country so innovative."

“Sweden is an awesome place to start a business and an awesome place to raise a family,” he says.

Denmark has the best work-life balance. Here’s why: "Only 2% of employees regularly work very long hours, which isn't much when you compare it with the OECD average of 13%. Instead, they spend around two-thirds of their day (16 hours) eating, sleeping and indulging in leisurely pursuits."

Trish Cotter, a senior lecturer; executive director of the Martin Trust Center for MIT Entrepreneurship and Entrepreneur-in-Residence at MIT (Massachusetts Institute of Technology) wrote in April 2018 on a trip to Norway:

"Although Americans are known for our entrepreneurial spirit and the 'American dream,' Nordic countries are also embracing entrepreneurship. Interestingly, according to The World Bank Economy Rankings, Sweden is ranked #13, Norway #19, and Denmark #34 for ease of starting a business, as compared to the US at #49. (New Zealand is in the #1 slot.)

Oslo, Norway is seen as one of the world’s best startup hubs even though it’s one of the most expensive cities in the world. Entrepreneurs can expect a refreshingly balanced approach to work/life and a great environment to base tech or communication startups. Norway’s startup scene is also starting to blossom in terms of investment, and these articles in Shifter and Medium show how other Nordic countries, specifically Finland and Sweden, are doing particularly well in terms of investments, with Denmark also catching up."

The Nordic countries also have high rankings for the best countries to start a business. 

Best countries in the world to start or run a business in 2018

Material standard of living per capita and GDP per capita in EU 2017

Ireland had a material standard of living per capita in 2017, based on consumption of public and private goods and services, adjusted for price differences, that was 6% below the EU average while Norway was 32% above; Iceland was 17%+; Finland was 13%+; Denmark was 12%+ and Sweden was 9% above.

Norway and Iceland are not EU members.

Ireland has a very low employer firm startup rate- UK's is 4 times bigger

On civic participation, Sweden, Denmark, and Ireland held general elections in 2014, 2015 and 2016 respectively.

The turnout rate of the voting age population was 83%, 80%, and 58%.  

Immigration

Sweden will hold a general election on September 9 and the populist Sweden Democrats (SD), which more than doubled their vote share in 2014, may rise above a 20% share this year. 

In 2015 when a large number of migrants and war refugees entered Europe about 163,000 asylum-seekers arrived in Sweden before the country introduced border controls. The numbers have fallen to about 26,000 annually but the issue is a potent one for some voters.

The foreign-born population according to Eurostat, was at a ratio of 17.8% in Sweden on January 1, 2017, and 12.4% were born outside the EU. The ratios in Denmark were 11.6%/7.6%; Finland 6.3%/4.1% and Norway 15.2%/8.5%.

In Switzerland, 28.4% of the population is foreign-born and 11.6% are from a non-EU country.

Sweden Statistics reported in 2018 that the foreign-born population was at 18.5% of the 10.1m population compared with 9.2% in 2000.

There is evidence from the Brexit vote in the UK that areas which had a rapid rise in the number of migrants were more likely to have a majority Leave vote.

Cultural integration has been a problem and a poll this year found that Swedish people’s attitudes to cultural diversity are more negative than ever. In the University of Gävle’s Diversity Barometer, negative attitudes among women have grown, nevertheless, the number of people with good experiences at school and at work of colleagues with a background in other countries is at a record high.

The Economist reported this month: "Immigrants commit a disproportionate number of crimes, but criminologists say they are not much different from Swedes with comparably low incomes. Despite lurid headlines, there is no clear upward trend in most categories of offence, though sexual assaults have risen in the past year. Dan Windt, a police chief in the Gothenburg area, says crime is somewhat lower this year than last."

Sweden gets an 8th ranking for the happiness of its foreign-born population — see chart in Chapter 2 here. 

Bloomberg reported this week: "Facing what could be the most tumultuous election in a century, the nation’s institutions and political groups have come under increasing cyberattacks that are threatening to disrupt the outcome. There has been a proliferation of new 'bots' on Twitter that are primarily stumping for the nationalist, anti-immigration Sweden Democrats and attacking the ruling Social Democrats."

The report adds "As a beacon of social democracy, Sweden is a welcome target for conservatives across the world. Over the past years, it has become a frequent punching bag on social media and amid so-called alt-right news sources over its efforts to absorb a record number of immigrants. Even US President Donald Trump has used his pulpit to portray Sweden as a nation in crisis from an overload of immigrants, largely based on his reliance on Fox News for information."

The Economist Intelligence Unit reports "that the Nordics (by which we mean Denmark, Norway and Sweden) have a long experience with nascent populist parties, but they have come to prominence since the 2000s. The Danish People's Party (DF) was founded in 1995 as a splinter from the Danish Progress Party (founded in 1972). Its predecessor ran on an anti-tax platform, but the DF moved to focus primarily on immigration, as well as elderly care and opposition to the EU. Its support almost doubled in Denmark's 2001 general election, to 12% of the total vote, boosted by fears of extreme Islamism after the September 2001 terrorist attacks in the US. The DF received another boost in the wake of the 2015 migration crisis, after it intensified its anti-migration rhetoric. It became the second-largest party in parliament."

"In Norway the Progress Party (FrP), formed in 1973, has its roots in an anti-tax and anti-bureaucracy movement. However, unlike the DF, the party has maintained its right-wing, neo-liberal approach to economic policy, but it has also focused on migration and Islamism. The FrP has been fairly popular since its formation, but its support peaked in 2005-13, when it called for greater spending of "oil money" for improving infrastructure and public services.

"The SD is the youngest populist party in the region. Originally launched in 1988, the SD has changed a lot over the years, but has found it hard to escape from its past neo-Nazi associations. The Swedish prime minister, Stefan Lofven, called it a 'Nazi and racist party' in a TV debate in 2016, but later corrected his statement. Support for the SD took almost two decades to pick up. In the 2010 general election, the SD won 5.7% of the vote, and this doubled to about 13% in 2014. Rising support for the party was driven by a popular backlash against Sweden's refugee policy (at the time one of the most generous in the world), high youth unemployment, and an increasingly pronounced divide between rural and non-rural areas. The SD looks up to the DF, as the two parties are similar: immigration is at the core of its agenda, although they are not fully single-issue parties."

*Denmark, Finland, Iceland, Norway and Sweden have been members of the Nordic Council of Ministers since 1971. In addition, Greenland, the Faroe Islands and Åland have also had increased representation and more prominent roles in the Nordic Council of Ministers, with the same representation as the other member countries.

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