When you lay out the impressive economic indicators of the Nordic countries, naysayers come out of the woodwork to harp on their small size. These arguments never explain what small population sizes have to do with anything. Apparently it is supposed to be self-evident that smaller countries can do this kind of stuff more easily.
But the exact opposite is true. Small populations should make it way harder to do what Nordic countries do.
Smaller countries are much more reliant on the global economy than bigger countries. One easy way to see this is to look at a countrys exports as a percent of GDP.
The Nordic countries export 3 to 4 times as much as the US exports. They have to because their smaller domestic market means that the only way they can grow businesses to any scale is to sell on the global market. If their exports become uncompetitive because of their high taxes and labor costs, then that is a much bigger problem for them than it is for a country like the US, which is less dependent on exports for its GDP.
Additionally, the small size of these countries should also mean that it is a lot easier for people to avoid investing capital in the countries if the economic environment becomes too unfavorable. Companies or individuals looking for places to park their capital can easily afford to skip over the Nordic countries without missing out on much. But it is much harder to skip over the US, again because of its large market size.
Unrelated to its population size, the Nordic countries also face unique challenges owing to their integration into Europe and the EU. A rich person in a Nordic country who is fed up with high taxation can easily slip into lower tax areas elsewhere in Europe. Immigration from one country to another is not very difficult. The same is not true of the US where disgruntled rich people have a much harder time emigrating elsewhere than their Nordic peers.
Whats so remarkable about the Nordic countries is that they manage to pull off their systems despite the considerable handicap of small populations and small market sizes. Despite all the pressures being small puts on having lower wages and lower taxes in order to remain competitive, the Nordics consistently post the highest unit labor costs in Europe and highest taxes in the developed world. Yet they flourish.
When you lay out the impressive economic indicators of the Nordic countries, naysayers come out of the woodwork to harp on their small size. These arguments never explain what small population sizes have to do with anything. Apparently it is supposed to be self-evident that smaller countries can do this kind of stuff more easily.
But the exact opposite is true. Small populations should make it way harder to do what Nordic countries do.
Smaller countries are much more reliant on the global economy than bigger countries. One easy way to see this is to look at a countrys exports as a percent of GDP.
The Nordic countries export 3 to 4 times as much as the US exports. They have to because their smaller domestic market means that the only way they can grow businesses to any scale is to sell on the global market. If their exports become uncompetitive because of their high taxes and labor costs, then that is a much bigger problem for them than it is for a country like the US, which is less dependent on exports for its GDP.
Additionally, the small size of these countries should also mean that it is a lot easier for people to avoid investing capital in the countries if the economic environment becomes too unfavorable. Companies or individuals looking for places to park their capital can easily afford to skip over the Nordic countries without missing out on much. But it is much harder to skip over the US, again because of its large market size.
Unrelated to its population size, the Nordic countries also face unique challenges owing to their integration into Europe and the EU. A rich person in a Nordic country who is fed up with high taxation can easily slip into lower tax areas elsewhere in Europe. Immigration from one country to another is not very difficult. The same is not true of the US where disgruntled rich people have a much harder time emigrating elsewhere than their Nordic peers.
Whats so remarkable about the Nordic countries is that they manage to pull off their systems despite the considerable handicap of small populations and small market sizes. Despite all the pressures being small puts on having lower wages and lower taxes in order to remain competitive, the Nordics consistently post the highest unit labor costs in Europe and highest taxes in the developed world. Yet they flourish.
Fucking wrecked
Not really, the blogger gets shot down by the commenters, who point out the obvious flaws in this analysis. ---
When you lay out the impressive economic indicators of the Nordic countries, naysayers come out of the woodwork to harp on their small size. These arguments never explain what small population sizes have to do with anything. Apparently it is supposed to be self-evident that smaller countries can do this kind of stuff more easily.
But the exact opposite is true. Small populations should make it way harder to do what Nordic countries do.
Smaller countries are much more reliant on the global economy than bigger countries. One easy way to see this is to look at a countrys exports as a percent of GDP.
The Nordic countries export 3 to 4 times as much as the US exports. They have to because their smaller domestic market means that the only way they can grow businesses to any scale is to sell on the global market. If their exports become uncompetitive because of their high taxes and labor costs, then that is a much bigger problem for them than it is for a country like the US, which is less dependent on exports for its GDP.
Additionally, the small size of these countries should also mean that it is a lot easier for people to avoid investing capital in the countries if the economic environment becomes too unfavorable. Companies or individuals looking for places to park their capital can easily afford to skip over the Nordic countries without missing out on much. But it is much harder to skip over the US, again because of its large market size.
Unrelated to its population size, the Nordic countries also face unique challenges owing to their integration into Europe and the EU. A rich person in a Nordic country who is fed up with high taxation can easily slip into lower tax areas elsewhere in Europe. Immigration from one country to another is not very difficult. The same is not true of the US where disgruntled rich people have a much harder time emigrating elsewhere than their Nordic peers.
Whats so remarkable about the Nordic countries is that they manage to pull off their systems despite the considerable handicap of small populations and small market sizes. Despite all the pressures being small puts on having lower wages and lower taxes in order to remain competitive, the Nordics consistently post the highest unit labor costs in Europe and highest taxes in the developed world. Yet they flourish.
Fucking wrecked
Not really, the blogger gets shot down by the commenters, who point out the obvious flaws in this analysis.
Didn't see any good comments there, but the article itself is just an unsupported assertion. ---
