As socio-political systems go, one rises above all others, trading on a now-dirty word to create the happiest, healthiest people on Earth. So why aren’t we all following their lead?
Our tendency in the West, as children of capitalism, is to measure costs, rather than value. Similarly, we more often focus on quantity than we do on quality.
These are critical distinctions, because the first of these favors whittling away at a thing until it is picked clean, while the other one favors building a thing up, so that it is robust and resilient.
Capitalism trades on one impetus above all others: how much can one squeeze out of a person or thing — a measure we call efficiency — to maximize profitability for the personal benefit of employers or owners, before we discard the spent resource, and find a fresh one to start the process anew. Whether we apply this philosophy to a human being, the land, a company or another sovereign nation with riches, capitalism can’t afford to grow a conscience.
In the free market, consciences are costly.
This is the antithesis of collectivism, whose primary goal is to build up increasing levels of broad-based, inclusive resilience and strength by applying the principle of personal accountability in the name of community, to maximize the long-term health of the whole. Paradoxically, by focusing on the whole, the wellbeing of every individual asset within it — human and otherwise — thrives. Collectivism necessitates the cultivation of consciences.
In the communal environment, it is individualism that is costly.
To distinguish these systems, we can say that one is parasitic, while the other is symbiotic.
One is reductive; the other, additive.
The only way that capitalism works for the community is in a mode of altruistic or collectivist governance. That is, with governing structures in which virtues and ethics are baked into the DNA of an enterprise.
NPOs and NGOs
In the capitalist market, these enterprises are called not-for-profit organizations, or NPOs. They are typically set up by individuals who are inclined to care primarily about the common good. In NPOs, profit is forsaken for the greatest good the efforts of its members can generate for their target audience, while using just enough of the capital to maintain, or expand, its sphere of influence.
In other words, the entire point of the NPO is to grow impact, based on a moral, ethical or virtue-based imperative.
These forces represent the best of human nature, dressed up as companies, so that they can “play ball” within the confines of the capitalist game’s rulebook.
Some NPOs are called NGOs — or non-governmental organizations. Oxfam (hunger), Greenpeace (nature) and World Wildlife Fund (fauna) are NGOs most of us know well. All of them aim human energy tirelessly to either prevent the things on which we depend from being ravaged by the forces of capitalism, or by protecting people themselves whom capitalism has cast off or squeezed, from being kept down or destroyed, for our conveniences.
Often, people are so motivated by the purity of NPOs’ missions that they volunteer their time — often tons of it — for free, without concern for personal benefit. Some of these people recognize their position of relative privilege or influence; others feel a personal connection to a mission, or a people, and thus devote themselves to what can only be called “a cause”.
Each NPO shares a common ideology, whether or not it is aware of this: that of collectivism.
Some use a less technical term: “human decency”.
But not everyone sees the mission of an NPO as purely. Some capitalists are less generous in their appraisal. They will tell you that the only reason NPOs have the ability to exist is because capitalism funds them, as though the invention of capitalism was a prerequisite for humans to grow a conscience — or to tap into their inner kindness.
If anything, we have maintained our innate birthright — our inner virtue — in spite of the toxic systems, capitalism among them, that we have created in order to wage war against one another, in a free-for-all for control and resources.
The Human Problem
For as long as we’ve looked inward, philosophers have asked, “What is human nature?” The closest totem we’ve invented to illustrate the complexity of human essence is the symbol of the Yin and Yang. It illustrates the fundamental dualism inherent in not just our internal lives but everything we experience: the interconnectedness and interdependence of opposite and complementary forces, such as winter and summer, day and night, action and rest, depletion and recharging, or male and female — reproductively. It also refers to the balancing of forces, such as man-made systems of chaos and order, or kindness and evil. Moreover, the contrasting dots at the center of each opposing half-symbol indicate that within each force, the germ of its opposite resides. That there is no “pure” thing, as such. That duality and complexity are at the very root of what it means to be human; or , for that matter, simply a part of the universe.
Every human is capable of both altruism and self-absorption. Even the greediest capitalists, one imagines, can find an inner generosity for “them and theirs” — their children or parents, or a loved one. And every collectivist, one equally imagines, is capable of avarice — or greed — in the wanting of something or someone, or in feeling anger toward those who hoard while they sacrifice.
It is human to do both: to be, alternatively, our best and our worst selves — and every gradient in between, to boot. Life is mostly a continual volley between two poles, while admittedly each of our ranges is somewhat different, in breadth and in frequency.
So what does this mean for economic systems? For doing good for others from within a dominant capitalist system that rewards competition, above all else? Of being collectivist within an individualist paradigm?
Can that work? How, exactly?
A Hybrid Solution
As go human dualities, so go political and economic ones. The so-called Nordic model is perhaps the most successful socio-economic system we have yet invented, to marry self-interest with the greater good. Somehow, it manages to cultivate both the universally humane and unifying notions of ethics and equity, generosity and altruism (collectivism) with the fragmenting system of winners and losers, haves and have-nots, predators and prey, conquerors and conquered (capitalism).
Investopedia describes the Nordic model as a “combination of social welfare and economic systems… embracing [both] a welfare system and globalization — two approaches to government that can be seen at times as opposites.” More pointedly, it refers to the Nordic model as combining “elements of capitalism and socialism”.
If, as the Yin and Yang posits, human beings are given to administering to both self-interest and greater good at times, doesn’t it follow that a socio-political system that recognizes and allows for both, while preventing either from completely taking over, is the kind of system we should all be championing, if a shared end goal is to live in a truly sustainable community, over the long term?
Scandinavians sure seem to think so; as does every single poll, or list, or study that aims to uncover the “best places to live”.
The Democracy Index, about which I’ve written before, ranks nations according to that which upholds and strengthens the foundational principles of pluralism, functional government, political participation, political culture and civil liberties. All five autonomous Scandinavian countries are among the top seven democracies on our planet (including the top 3 spots), with New Zealand and Ireland rounding them off, and Canada sharing spot 7 with Denmark.
The United States languishes at number 25, having been stripped of its “full democracy” label, in 2016. Its lowest score? The functioning of its government, for which America is now considered a “flawed democracy.”
The 2020 Best Countries Ranking assesses 75 metrics. Those very same Nordic countries top the list here, too, as they do every year, trailing only… Canada. On that list, the U.S. — again — limps in at spot 15. The primary reason it ranked that high was due to “job prospects” (i.e.: income); though ironically, it is ranked 56th for “affordability.”
This shouldn’t be surprising. In one illustration, the American free-market system of privatized health and education costs its citizens far more than it would if — say — the government funded and guaranteed these things to all of its citizens. In fact, the U.S. spent $3.8 trillion — or 17.7% of its GDP — on healthcare in 2019, more than any other developed nation, with worse results.
Commonwealthfund.org uses health data from the OECD to assess spending and outcomes among “high-income” nations. It concludes:
“The U.S. spends more on health care as a share of the economy — nearly twice as much as the average OECD country — yet has the lowest life expectancy and highest suicide rates among the 11 nations.”
“The U.S. has the highest chronic disease burden and an obesity rate that is two times higher than the OECD average.”
Citizens of Sweden and Norway, both among the OECD countries, live on average 4 years longer than Americans do, while in the process outlaying just $20–70 annually, per capita, against the US’s $4,100 — a 50- to 200-fold difference! Not only do the Scandinavians live longer, they suffer less than one third of Americans’ obesity burden, 50% less of its chronic disease burden, and they are roughly one third as likely to be hospitalized from preventable causes.
Social scientists all agree that material wealth is not the most important factor in assessing a life well lived. With that said, from a pure capitalist standpoint, most champions of unchecked free markets would argue that a significant spend on public good eats into profits that could bolster an economy through healthy competition, and in the process generate maximum wealth. This philosophy works well, if the end goal is to create a world of staggering inequality. As I wrote for Data-Driven Investor:
“Just 8 mega-rich men now have as much wealth as half of the planet’s humans. The wealthiest 1% now hold as much of it as the other 99%. The top 10% enjoy 85% of global wealth. The bottom 90% share just 15% of it. The top 30% own 97% of all wealth. And the bottom 70% share just 3%.”
But. If the goal of society is not to create that monster, but rather to create thriving and growing communities of engaged, empowered and healthy citizens, then capitalism “isn’t your jam,” and the Nordic model could prove to be the best version of democratic participation we have yet created.
All five Scandinavian countries rank among the top 15 in global GDP per capita. One — Norway — tops the U.S. in pure capitalistic income. But beyond GDP, these are all great places to live because while some may make less absolute cash than Americans do, they are nonetheless thriving economically, while simultaneously living longer, more healthy, and happier lives while doing it.
The World Happiness Report is just what it says: “…an indispensable tool for policymakers looking to better understand what makes people happy and thereby to promote the wellbeing of its citizenry,” according to Jeffrey Sachs, the American economist widely considered one of the world’s leading experts on sustainable development.
Guess what? Finland and Denmark top that list, too, unsurprisingly. Iceland and Norway come fourth and fifth. And Sweden ranks seventh. The U.S.? 18th. So, it seems that the social scientists and Jeffrey Sachs are right: the almighty dollar (or yuan, or euro) isn’t the path to maximal happiness. Rather, that route seems to be through a commitment to balancing economics and social good.
That is, a fusion of capitalism and socialism… just like in Scandinavia.
Socialism has somehow become one of the dirtiest words in America. I’ve been gobsmacked as long as I’ve heard people use it as a pejorative, which is often. And while I am American, I am also Canadian, and formed much of my view toward societal accountability while growing up there. Socialism always seemed to me to be representative of the kind of just society that I knew and loved: where people cared about one another’s wellbeing; that shared participation in the economic burden of creating broad-based opportunity for as many people as possible was a good idea; and that together, we were stronger than we were apart. This last point is the central idea behind socialism: that “we” trumps “me”.
Socialism’s Wiktionary definition calls it “a range of economic and social systems characterized by social ownership of the means of production and democratic control of workers’ self-management of enterprises.”
How is that not a good thing??
A list of “the world’s most socialist states” includes: China, Denmark, Finland, Netherlands, Canada, Sweden, Norway, Ireland, New Zealand and Belgium. All of these countries (apart from China) rank, on all the lists I referenced above, among the top democracies in the world and the happiest nations, host to the healthiest and most long-lived citizens, who simultaneously enjoy some of the highest incomes anywhere.
So I ask:
What. Is. The. Downside?
The duality of human nature demands that both our personal needs and those of the communities in which we live be well-fed. We are capable of both greed and caring, to various degrees — often within the same hour. Within capitalist nations, NPOs and their NGOs represent a high-water mark of social enterprise because they are mission-driven, at their cores, to help humanity. Where they fail, as my wife and I were discussing just yesterday, is that most are also so chronically underfunded within their capitalist host nations that their survival mandates often drastic cost-cutting measures that undermine their very mission.
And so, NPOs, while important, cannot maximize their impact without the benevolence of wealthy patrons, like Bill Gates and Warren Buffett, or Andrew Carnegie and the Rockefellers before them. And most NPOs never find that level of patronage.
The power of mission-based grassroots organizations like Habitat for Humanity, Human Rights Watch, Doctors Without Borders, Charity:Water, Rotary International and Kiva, among scores of others, is significant. With that said, they are limited. Nations themselves are better suited to leverage the power of millions-strong citizenries to do the greatest good for the most people.
Together, they can build a world without downsides.
So, to do that, we should all look to the Nordic model to see how it not only operates successfully in the present world, but how it blows the doors off of every conceivable metric of wellbeing we are capable of measuring, coming up roses.
Socialism was never a dirty word. Its root is the term “social”. So, unless you truly believe that we are here as individuals first, and that beyond those lucky few that we personally choose to share our precious spoils with, the rest of you can go f**k off and leave me and mine alone, then you, too, understand that we live in a social world first, as part of a social species, and that to deny doing your part for the greater good of that same network is to abdicate much of what it means to be a human being.
I, for one, see no conflict between self-interest and common good. I think, frankly, one strengthens the other. Strong self-sufficiency makes for more formidable contributions, as it taps into our inner competitive nature, often bringing out our “A-game” in the process. Further, a strong sense of common purpose helps ground us, thereby bringing out the best in others, in the name of collaboration, teamwork and reach. Finally, from the moral standpoint, being “one’s brother’s keeper” unlocks yet another aspect of our inner strength: the power to give, without consideration of a return on that investment.
To give of oneself freely, without consideration of anything other than the act of giving, requires the greatest strength of all; a healthy, foundational acceptance of our inner duality—one’s Yin and one’s Yang—aimed outward.