The economy of governments covers the systems for setting levels of taxation , government budgets , the money supply and interest rates as well as the labour market , national ownership , and many other areas of government interventions into the economy.
111-462: Chronological history The Nordic model comprises the economic and social policies as well as typical cultural practices common in the Nordic countries ( Denmark , Finland , Iceland , Norway , and Sweden ). This includes a comprehensive welfare state and multi-level collective bargaining based on the economic foundations of social corporatism , and a commitment to private ownership within
222-418: A "Scandinavian model" economy, with high taxes and a robust welfare state. Socialist economists Pranab Bardhan and John Roemer criticize Nordic-style social democracy for its questionable effectiveness in promoting relative egalitarianism as well as its sustainability . They posit that Nordic social democracy requires a strong labour movement to sustain the heavy redistribution required, arguing that it
333-597: A 2017 study, economists James Heckman and Rasmus Landersøn compared American and Danish social mobility, and found that social mobility is not as high as figures might suggest in the Nordic countries, although they did find that Denmark ranks higher in income mobility. When looking exclusively at wages (before taxes and transfers), Danish and American social mobility are very similar; it is only after taxes and transfers are taken into account that Danish social mobility improves, indicating that Danish economic redistribution policies are
444-435: A broader perspective on well-being incorporating, such as social issues associated with bodily integrity or bodily citizenship, then some major forms of men's domination still stubbornly persist in the Nordic countries, e.g. business, violence to women, sexual violence to children, the military, academia, and religion. While praising the Nordic model as a "clear and compelling contrast to the neoliberal ideology that has strafed
555-678: A capitalist economy. To a large extent, that consists of using public insurance programs – government transfers and services." Nobel Prize-winning economist Joseph Stiglitz says that there is higher social mobility in the Scandinavian countries than in the United States and posits that Scandinavia is now the land of opportunity that the United States once was. American author Ann Jones , who lived in Norway for four years, posits that "the Nordic countries give their populations freedom from
666-414: A government may say it intends to raise interest rates indefinitely to bring inflation under control, but then relax its stance later. This makes policy non-credible and ultimately ineffective. A rule-based policy can be more credible, because it is more transparent and easier to anticipate. Examples of rule-based policies are fixed exchange rates , interest rate rules , the stability and growth pact and
777-413: A market-based mixed economy – with Norway being a partial exception due to a large number of state-owned enterprises and state ownership in publicly listed firms . Although there are significant differences among the Nordic countries, they all have some common traits. The three Scandinavian countries are constitutional monarchies , while Finland and Iceland have been republics since
888-498: A normal workday, protective legislation, minimum wages." Arguing against those to their left, the party favored moderatism and wanted to help workers in the here and now, and followed the Fabian argument that the policies were steps on the road to socialism, which would not come about through violent revolution but through the social corporative model of welfare capitalism , to be seen as progressive in providing institutional legitimacy to
999-400: A predominant issue in the 19th century, as it became clear that industrial output, employment, and profit behaved in a cyclical manner. One of the first proposed policy solutions to the problem came with the work of Keynes , who proposed that fiscal policy could be used actively to ward off depressions, recessions and slumps. The Austrian School of economics argues that central banks create
1110-470: A quarter of the country's gross domestic product . In Sweden, the grand compromise was pushed forward by the Saltsjöbaden Agreement signed by employer and trade union associations at the seaside retreat of Saltsjöbaden in 1938. This agreement provided the foundation for Scandinavian industrial relations throughout Europe's Golden Age of Capitalism . The Swedish model of capitalism developed under
1221-705: A reduction of 10.9 p.p., the effects of tax and transfers on poverty in all the Nordic countries are substantially bigger. In comparison to France (27 p.p. reduction) and Germany (24.2 p.p. reduction), the taxes and transfers in the Nordic countries are smaller on average. The term 'peasant republic' is sometimes applied to certain communities in Scandinavia during the Viking Age and High Middle Ages , especially in Sweden , where royal power seems to have been initially somewhat weak, and in areas of modern day Sweden that were not under
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#17330852291661332-549: A review by Emanuele Ferragina and Martin Seeleib-Kaiser of works about the different models of welfare states, apart from Belgium and the Netherlands, categorized as "medium-high socialism", the Scandinavian countries analyzed (Denmark, Norway, and Sweden) were the only ones to be categorized by sociologist Gøsta Esping-Andersen as "high socialism", which is defined as socialist attributes and values (equality and universalism) and
1443-459: A robust work ethic and considerable social cohesion". According to Luciano Pellicani , the social and political measures adopted in countries like Sweden and Denmark are the same that some other European left-wing politicians theorised to combine justice and freedom , referring to liberal socialism and movements like Giustizia e Libertà and Fabian Society . According to Naomi Klein , former Soviet leader Mikhail Gorbachev sought to move
1554-422: A similar alliance with either Embraer with its E-jet E2 or Mitsubishi Heavy Industries and its MRJ . On 21 December, Boeing and Embraer confirmed to be discussing a potential combination with a transaction subject to Brazilian government regulators, the companies' boards and shareholders approvals. The weight of Airbus and Boeing could help E2 and CSeries sales but the 100-150 seats market seems slow. As
1665-508: A special program to restore U.S. competitiveness across all U.S. industries, Project Socrates , contributed to employment growth as the U.S. aerospace industry captured 72 percent of world aerospace market. By 1999 U.S. share of the world market fell to 52 percent. In the European Union , aerospace companies such as Airbus , Safran , BAE Systems , Thales , Dassault , Saab AB , Terma A/S , Patria Plc and Leonardo are participants in
1776-446: A variant of capitalism based on the predominance of private property and market allocation mechanisms alongside a set of policies for promoting economic security and opportunity within the framework of a capitalist economy as opposed to a political ideology that aims to replace capitalism. While many countries have been categorized as social democratic , the Nordic countries have been the only ones to be constantly categorized as such. In
1887-529: A very high tariff on foreign trade. By the early modern age, more policy choices had been developed. There was considerable debate about mercantilism and other restrictive trade practices like the Navigation Acts , as trade policy became associated with both national wealth and with foreign and colonial policy. Throughout the 19th century, monetary standards became an important issue. Gold and silver were in supply in different proportions. Which metal
1998-451: A weakening of the influence of organized labor." In the 1950s, Olof Palme and the prime minister Tage Erlander formulated the basis of Swedish social democracy and what would become known as the "Swedish model", drawing inspiration from the reformist socialism of party founder Hjalmar Branting , who stated that socialism "would not be created by brutalized...slaves [but by] the best positioned workers, those who have gradually obtained
2109-456: Is Japan ), strong transportation infrastructure (#5, #1 is Hong Kong ), a healthy economy (#10, #1 is China ), but high costs (#7, #1 is Denmark ) and average tax policy (#36, #1 is Qatar ). Following were Canada , Singapore , Switzerland and United Kingdom . Within the US, the most attractive was Washington state , due to the best Industry (#1), leading Infrastructure (#4, New Jersey
2220-403: Is #1) and Economy (#4, Texas is #1), good labor (#9, Massachusetts is #1), average tax policy (#17, Alaska is #1) but is costly (#33, Montana is #1). Washington is tied to Boeing Commercial Airplanes , earning $ 10.3 billion, is home to 1,400 aerospace-related businesses, and has the highest aerospace jobs concentration. Following are Texas, Georgia , Arizona and Colorado . In the US,
2331-414: Is a high technology industry. The aircraft industry is the industry supporting aviation by building aircraft and manufacturing aircraft parts for their maintenance . This includes aircraft and parts used for civil aviation and military aviation . Most production is done pursuant to type certificates and Defense Standards issued by a government body. This term has been largely subsumed by
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#17330852291662442-522: Is a broader term that includes also institutional reforms and actions that do not require causal claims to be neutral under interventions. Such policy decisions can be grounded in, respectively, mechanistic evidence and correlational (econometric) studies. Aerospace manufacturer An aerospace manufacturer is a company or individual involved in the various aspects of designing , building, testing, selling, and maintaining aircraft , aircraft parts , missiles , rockets , or spacecraft . Aerospace
2553-598: Is a set of policies that are imposed by an international body. This can occur (for example) as a result of intervention by the International Monetary Fund . The first economic problem was how to gain the resources it needed to be able to perform the functions of an early government: the military , roads and other projects like building the Pyramids . Early governments generally relied on tax in kind and forced labor for their economic resources. However, with
2664-517: Is based on a "welfare-to-work" (see workfare ) model while part of Finland's welfare state includes the voluntary sector playing a significant role in providing care for the elderly. Norway relies most extensively on public provision of welfare. When it comes to gender equality, the Nordic countries hold one of the smallest gaps in gender employment inequality of all OECD countries, with less than 8 points in all Nordic countries according to International Labour Organization standards. They have been at
2775-511: Is based. Several consolidations took place in the aerospace and defense industries over the last few decades. Airbus prominently illustrated the European airliner manufacturing consolidation in the late 1960s. Between 1988 and 2010, more than 5,452 mergers and acquisitions with a total known-value of US$ 579 billion were announced worldwide. In 1993, then United States Secretary of Defense Les Aspin and his deputy William J. Perry held
2886-445: Is characterized by flexibility and openness to innovation in the provision of welfare. The Nordic welfare systems are mainly funded through taxation . Despite the common values, the Nordic countries take different approaches to the practical administration of the welfare state. Denmark features a high degree of private sector provision of public services and welfare, alongside an assimilation immigration policy. Iceland's welfare model
2997-705: Is idealistic to think similar levels of redistribution can be accomplished in countries with weaker labour movements. They say that even in the Scandinavian countries social democracy has been in decline since the weakening of the labour movement in the early 1990s, arguing that the sustainability of social democracy is limited. Roemer and Bardham posit that establishing a market-based socialist economy by changing enterprise ownership would be more effective than social democratic redistribution at promoting egalitarian outcomes, particularly in countries with weak labour movements. Historian Guðmundur Jónsson said that it would be historically inaccurate to include Iceland in one aspect of
3108-420: Is most extensive in Norway and Sweden, where employer federations and labour representatives bargain at the national level mediated by the government. Labour market interventions are aimed at providing job retraining and relocation. The Nordic labour market is flexible, with laws making it easy for employers to hire and shed workers or introduce labour-saving technology. To mitigate the negative effect on workers,
3219-471: Is the successor company to numerous British aircraft manufacturers which merged throughout the second half of the 20th century. Many of these mergers followed the 1957 Defence White Paper . Marconi Electronic Systems , a subsidiary of the General Electric Company plc , was acquired by British Aerospace for US$ 12.3 billion in 1999 merger, to form BAE Systems . In 2002, when Fairchild Dornier
3330-639: Is wrong, saying that "the success of Nordic countries like Sweden – as measured by relatively high living standards accompanied by low poverty, with government-funded education through university, universal health coverage, generous parental-leave policies and long life spans – precedes the contemporary welfare state.", adding that "Research has suggested that the Northern European success story has its roots in cultural rather than economic factors. The Scandinavian countries ... historically developed remarkably high levels of social trust,
3441-500: The Airbus A380 , less than 100 major suppliers outsource 60% of its value, even 80% on the A350 . Boeing embraced an aggressive Tier 1 model for the 787 but with its difficulties began to question why it was earning lower margins than its suppliers while it seemed to take all the risk, ensuing its 2011 Partnering for Success initiative, as Airbus initiated its own Scope+ initiative for
Nordic model - Misplaced Pages Continue
3552-567: The Bombardier Global Express pioneered the "Tier 1" supply chain model inspired by automotive industry , with 10-12 risk-sharing limited partners funding around half of the development costs. The Embraer E-Jet followed in the late 1990s with fewer than 40 primary suppliers. Tier 1 suppliers were led by Honeywell , Safran , Goodrich Corporation and Hamilton Sundstrand . In the 2000s, Rolls-Royce reduced its supplier count after bringing in automotive supply chain executives. On
3663-474: The CSeries partnership between Airbus and Bombardier Aerospace could trigger a daisy chain of reactions towards a new order. Airbus gets a new, efficient model at the lower end of the narrowbody market which provides the bulk of airliner profits and can abandon the slow selling A319 while Bombardier benefits from the growth in this expanded market even if it holds a smaller residual stake. Boeing could forge
3774-648: The Chinese way of doing things before the Chinese', says Torger Reve of the Norwegian Business School." The government also operates a sovereign wealth fund, the Government Pension Fund of Norway , whose partial objective is to prepare Norway for a post-oil future but "unusually among oil-producing nations, it is also a big advocate of human rights – and a powerful one, thanks to its control of
3885-647: The Department of Defense and NASA are the two biggest consumers of aerospace technology and products. The Bureau of Labor Statistics of the United States reported that the aerospace industry employed 444,000 wage and salary jobs in 2004, many of which were in Washington and California, this marked a steep decline from the peak years during the Reagan Administration when total employment exceeded 1,000,000 aerospace industry workers. During that period of recovery
3996-614: The European Union in the 1970s, reflecting the different political approaches to it among the Nordic countries. The early 1990s recession affected the Nordic countries and caused a deep crisis in Finland, and came amid the context of the dissolution of the Soviet Union and collapse of trade from the Eastern Bloc . Like in Sweden, Finland's universalistic welfare state based on the Nordic model
4107-554: The Global Peace Index as well as being ranked in the top 10 on the World Happiness Report . The Nordic model was originally developed in the 1930s under the leadership of social democrats , although centrist and right-wing political parties, as well as labour unions, also contributed to the Nordic model's development. The Nordic model began to gain attention after World War II and has transformed in some ways over
4218-679: The Golden Rule . Some policy rules can be imposed by external bodies, for instance, the Exchange Rate Mechanism for currency. A compromise between strict discretionary and strict rule-based policy is to grant discretionary power to an independent body. For instance, the Federal Reserve Bank , European Central Bank , Bank of England and Reserve Bank of Australia all set interest rates without government interference, but do not adopt rules. Another type of non-discretionary policy
4329-538: The Soviet Union in a similar direction to the Nordic system, combining free markets with a social safety net, but still retaining public ownership of key sectors of the economy – ingredients that he believed would transform the Soviet Union into "a socialist beacon for all mankind." The Nordic model has also been positively received by various social scientists and economists. American professor of sociology and political science Lane Kenworthy advocates for
4440-461: The Thing or Moot . The Nordic model traces its foundation to the "grand compromise" between workers and employers spearheaded by farmer and worker parties in the 1930s. Following a long period of economic crisis and class struggle, the "grand compromise" served as the foundation for the post-World War II Nordic model of welfare and labour market organization. The key characteristics of the Nordic model were
4551-532: The arms industry . In 2013, The Economist described its countries as "stout free-traders who resist the temptation to intervene even to protect iconic companies", while also looking for ways to temper capitalism's harsher effects and declared that the Nordic countries "are probably the best-governed in the world." Some economists have referred to the Nordic economic model as a form of "cuddly capitalism", with low levels of inequality, generous welfare states, and reduced concentration of top incomes, contrasting it with
Nordic model - Misplaced Pages Continue
4662-582: The labour movement by recognizing the existence of the class conflict between the bourgeoisie and the proletariat as a class compromise within the context of existing class conflict. This Swedish model was characterized by a strong labour movement as well as inclusive publicly funded and often publicly administered welfare institutions. By the early 1980s, the Swedish model began to suffer from international imbalances, declining competitiveness and capital flight. Two polar opposite solutions emerged to restructure
4773-448: The money supply to prevent excessive inflation. Policy is generally directed to achieve particular objectives, like targets for inflation , unemployment , or economic growth . Sometimes other objectives, like military spending or nationalization are important. These are referred to as the policy goals : the outcomes which the economic policy aims to achieve. To achieve these goals, governments use policy tools which are under
4884-432: The social cohesion in the Nordic countries. Among political scientists and sociologists, the term social democracy has become widespread to describe the Nordic model due to the influence of social democratic party governance in Sweden and Norway, in contrast to other classifications such as liberal or Christian democratic. According to sociologist Lane Kenworthy , the meaning of social democracy in this context refers to
4995-490: The social liberal paradigm, which was followed by the neoliberal paradigm by the 1980s and 1990s. According to Phillip O'Hara, "Sweden eventually became part of the Great Capitalist Restoration of the 1980s and 1990s. In all the industrial democracies and beyond, this recent era has seen the retrenchment of the welfare state by reduced social spending in real terms, tax cuts, deregulation and privatization, and
5106-503: The "Last Supper" at the Pentagon with contractors executives who were told that there were twice as many military suppliers as he wanted to see: $ 55 billion in military–industry mergers took place from 1992 to 1997, leaving mainly Boeing , Lockheed Martin , Northrop Grumman and Raytheon . Boeing bought McDonnell Douglas for US$ 13.3 billion in 1996. Raytheon acquired Hughes Aircraft Company for $ 9.5 billion in 1997. BAE Systems
5217-455: The 1990s reforms was the substantial growth of mutual fund savings, which largely began with the government subsidizing mutual fund savings through the so-called Allemansfonder program in the 1980s; today 4 out of 5 people aged 18–74 have fund savings. The state of Norway has ownership stakes in many of the country's largest publicly listed companies, owning 37% of the Oslo stock market and operating
5328-462: The 2019 Nobel Prize laureates exemplifies the gold type of evidence. However, the emphasis put on experimental evidence by the movement of evidence-based policy (and evidence-based medicine ) results from the narrowly construed notion of intervention, which encompasses only policy decisions concerned with policymaking aimed at modifying causes to influence effects. In contrast to this idealized view of evidence-based policy movement, economic policymaking
5439-503: The 20th century, governments adopted discretionary policies like demand management designed to correct the business cycle . These typically used fiscal and monetary policy to adjust inflation, output and unemployment. However, following the stagflation of the 1970s , policymakers began to be attracted to policy rules . A discretionary policy is supported because it allows policymakers to respond quickly to events. However, discretionary policy can be subject to dynamic inconsistency :
5550-424: The 20th century. All the Nordic countries are however described as being highly democratic and all have a unicameral legislature and use proportional representation in their electoral systems . They all support a universalist welfare state aimed specifically at enhancing individual autonomy and promoting social mobility , with a sizable percentage of the population employed by the public sector (roughly 30% of
5661-693: The CSeries, renamed A220, and E-jet E2 are more capable than their predecessors, they moved closer to the lower end of the narrowbodies . In 2018, the four Western airframers combined into two within nine months as Boeing acquired 80% of Embraer's airliners for $ 3.8 billion on July 5. On April 3, 2020, Raytheon and United Technologies Corporation (except Otis Worldwide , leaving Rockwell Collins and engine maker Pratt and Whitney ) merged to form Raytheon Technologies Corporation , with combined sales of $ 79 billion in 2019. The most prominent unions between 1995 and 2020 include those of Boeing and McDonnell Douglas;
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#17330852291665772-818: The French, German and Spanish parts of EADS; and United Technologies with Rockwell Collins then Raytheon, but many mergers projects did not went through: Textron-Bombardier, EADS-BAE Systems, Hawker Beechcraft-Superior Aviation, GE-Honeywell, BAE Systems-Boeing (or Lockheed Martin), Dassault-Aerospatiale, Safran-Thales, BAE Systems-Rolls-Royce or Lockheed Martin–Northrop Grumman. The largest aerospace suppliers are United Technologies with $ 28.2 billion of revenue, followed by GE Aviation with $ 24.7 billion, Safran with $ 22.5 billion, Rolls-Royce Holdings with $ 16.9 billion, Honeywell Aerospace with $ 15.2 billion and Rockwell Collins including B/E Aerospace with $ 8.1 billion. Electric aircraft development could generate large changes for
5883-510: The Nobel peace prize." Norway is the only major economy in the north of Europe where younger generations are getting richer, with a 13% increase in disposable income income for 2018, bucking the trend seen in other european-northern nations of Millennials becoming poorer than the generations which came before. Social democrats have played a pivotal role in shaping the Nordic model, with policies enacted by social democrats being pivotal in fostering
5994-909: The Nordic countries, arguing that these countries, in particular Sweden, have failed to handle immigration effectively. George Lakey , author of Viking Economics , says that Americans generally misunderstand the nature of the Nordic model, commenting: "Americans imagine that "welfare state" means the U.S. welfare system on steroids. Actually, the Nordics scrapped their American-style welfare system at least 60 years ago, and substituted universal services, which means everyone – rich and poor – gets free higher education, free medical services, free eldercare, etc." Economic policy Most factors of economic policy can be divided into either fiscal policy , which deals with government actions regarding taxation and spending , or monetary policy , which deals with central banking actions regarding
6105-496: The Nordic countries, it retains national-level sectoral bargaining unlike Denmark and Iceland , with over 650 national-level bargaining agreements, it retains the Ghent system unlike Norway and Iceland and consequently has the second-highest rate of unionization in the world. Despite being one of the most equal OECD nations, from 1985 to the 2010s Sweden saw the largest growth in income inequality among OECD economies. Other effects of
6216-462: The Nordic model in Sweden and Norway, whereas in Iceland and Finland, right-wing political parties played a much more significant role in shaping their countries' social models. However, even in Iceland and Finland, strong labour unions contributed to the development of universal welfare. Social security and collective wage bargaining policies were rolled back following economic imbalances in the 1980s and
6327-465: The Nordic model is "the proof that modern capitalism can be combined with decency, fairness, trust, honesty, and environmental sustainability." The Nordic combination of extensive public provision of welfare and a culture of individualism has been described by Lars Trägårdh of Ersta Sköndal University College as " statist individualism ." A 2016 survey by the think tank Israel Democracy Institute found that nearly 60 percent of Israeli Jews preferred
6438-516: The Nordic model to a kind of "hybrid" system which features a blend of capitalist economics with socialist values, representing an alternative to American-style capitalism . Vermont Senator Bernie Sanders has pointed to Scandinavia and the Nordic model as something the United States can learn from, in particular with respect to the benefits and social protections the Nordic model affords workers and its provision of universal healthcare. Scandinavian political scientist Daniel Schatz argued that Sanders
6549-402: The Nordic model's parentage also stems from a mixture of mainly social democratic, centrist , and right-wing political parties, especially in Finland and Iceland, along with the social trust that emerged from the "great compromise" between capital and labour. The influence of each of these factors on each Nordic country varied as social democratic parties played a larger role in the formation of
6660-582: The Nordic model, that of consensus democracy . Addressing the time period from 1950 to 2000, Jónsson writes that "Icelandic democracy is better described as more adversarial than consensual in style and practice. The labour market was rife with conflict and strikes more frequent than in Europe, resulting in strained government–trade union relationship. Secondly, Iceland did not share the Nordic tradition of power-sharing or corporatism as regards labour market policies or macro-economic policy management, primarily because of
6771-658: The Swedish economy, the first being a transition to socialism by socializing the ownership of industry and the second providing favorable conditions for the formation of private capital by embracing neoliberalism. The Swedish model was first challenged in 1976 by the Meidner Plan promoted by the Swedish Trade Union Confederation and trade unions which aimed at the gradual socialization of Swedish companies through wage earner funds. The Meidner Plan aimed to collectivize capital formation in two generations by having
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#17330852291666882-1085: The United States ( Boeing ), Montreal and Toronto in Canada ( Bombardier , Pratt & Whitney Canada ), Toulouse and Bordeaux in France ( Airbus , Dassault , ATR ), Seville in Spain and Hamburg in Germany ( Airbus ), the North-West of England and Bristol in Britain ( Airbus and AgustaWestland ), Komsomolsk-on-Amur and Irkutsk in Russia ( Sukhoi , Beriev ), Kyiv and Kharkiv in Ukraine ( Antonov ), Nagoya in Japan ( Mitsubishi Heavy Industries Aerospace and Kawasaki Heavy Industries Aerospace ), as well as São José dos Campos in Brazil where Embraer
6993-430: The United States to make a gradual transition toward a social democracy similar to those of the Nordic countries, defining social democracy as such: "The idea behind social democracy was to make capitalism better. There is disagreement about how exactly to do that, and others might think the proposals in my book aren't true social democracy. But I think of it as a commitment to use government to make life better for people in
7104-420: The United States, in order to "stand as a beacon for the rest of the world in the 21st century." Swedish economist John Gustavsson, writing for American conservative magazine The Dispatch , criticized the Nordic model for its high taxation rates, including on the middle class and poor people. Political scientist Michael Cottakis has noted the rise of right-wing populist and anti-immigration sentiment in
7215-506: The aerospace suppliers. On 26 November 2018, United Technologies announced the completion of its Rockwell Collins acquisition, renaming systems supplier UTC Aerospace Systems as Collins Aerospace , for $ 23 billion of sales in 2017 and 70,000 employees, and $ 39.0 billion of sales in 2017 combined with engine manufacturer Pratt & Whitney . Before the 1980s/1990s, aircraft and aeroengine manufacturers were vertically integrated . Then Douglas aircraft outsourced large aerostructures and
7326-541: The auspices of the Swedish Social Democratic Party which assumed power in 1932 and retained uninterrupted power until 1976. Initially differing very little from other industrialized capitalist countries, the state's role in providing comprehensive welfare and infrastructure expanded after the Second World War until reaching a broadly social democratic consensus in the 1950s which would become known as
7437-552: The bottom of the Sustainable Development Index. He argues that the model needs to be updated for the Anthropocene , and reduce overconsumption while retaining the positive elements of progressive social democracy including universal healthcare and education, paid vacations and reasonable working hours, which have resulted in much better health outcomes and poverty reduction compared to overtly neoliberal countries like
7548-432: The business cycle. After the dominance of monetarism and neoclassical thought that advised limiting the role of government in the economy in the second half of the twentieth century, the interventionist view has once more dominated the economic policy debate in response to the 2007-2008 financial crisis, A recent trend originating from medicine is to justify economic policy decisions with best available evidence. While
7659-546: The centralized coordination of wage negotiation between employers and labour organizations , termed a social partnership, as well as providing a peaceful means to address class conflict between capital and labour. Magnus Bergli Rasmussen has challenged that farmers played an important role in ushering Nordic welfare states. A 2022 study by him found that farmers had strong incentives to resist welfare state expansion and farmer MPs consistently opposed generous welfare policies. Although often linked to social democratic governance,
7770-522: The control of the government. These generally include the interest rate and money supply , tax and government spending, tariffs, exchange rates , labor market regulations, and many other aspects of government. Government and central banks are limited in the number of goals they can achieve in the short term. For instance, there may be pressure on the government to reduce inflation, reduce unemployment, and reduce interest rates while maintaining currency stability. If all of these are selected as goals for
7881-427: The country's largest non-listed companies, including Equinor and Statkraft . In January 2013, The Economist reported that "after the second world war the government nationalised all German business interests in Norway and ended up owning 44% of Norsk Hydro's shares. The formula of controlling business through shares rather than regulation seemed to work well, so the government used it wherever possible. 'We invented
7992-472: The development of money came the first policy choice. A government could raise money through taxing its citizens. However, it could now also debase the coinage and so increase the money supply . Early civilizations also made decisions about whether to permit and how to tax trade . Some early civilizations, such as Ptolemaic Egypt adopted a closed currency policy whereby foreign merchants had to exchange their coin for local money. This effectively levied
8103-410: The dominant traditional religion of the Nordic countries, had an effect on the development of social democracy there. Schröder posits that Lutheranism promoted the idea of a nationwide community of believers and led to increased state involvement in economic and social life, allowing for nationwide welfare solidarity and economic co-ordination. Esa Mangeloja says that the revival movements helped to pave
8214-452: The effects of taxes and transfers stood at 24.7% in Denmark, 31.9% in Finland, 21.6% in Iceland, 25.6% in Norway, and 26.5% in Sweden. After accounting for taxes and transfers, the poverty rates for the same year became 6%, 7.5%, 5.7%, 7.7% and 9.7% respectively, for an average reduction of 18.7 p.p. Compared to the United States, which has a poverty level pre-tax of 28.3% and post-tax of 17.4% for
8325-501: The end of the post-war boom. The Social Democrats adopted monetarist and neoliberal policies, deregulating the banking industry, and liberalizing currency in the 1980s. The economic crisis of the 1990s saw greater austerity measures, deregulation, and the privatization of public services. Into the 21st century, it greatly affected Sweden and its universalistic welfare state, although not as hard as Finland. Sweden remained more Eurosceptic than Finland, and its struggles affected all
8436-706: The exception of Norway which includes a large number of state-owned enterprises and state ownership in publicly listed firms. The Nordic model is described as a system of competitive capitalism combined with a large percentage of the population employed by the public sector , which amounts to roughly 30% of the work force, in areas such as healthcare and higher education . In Norway, Finland, and Sweden, many companies and/or industries are state-run or state-owned like utilities , mail , rail transport , airlines , electrical power industry , fossil fuels , chemical industry , steel mill , electronics industry , machine industry , aerospace manufacturer , shipbuilding , and
8547-523: The financial crises of the 1990s which led to more restrictive budgetary policies that were most pronounced in Sweden and Iceland. Nonetheless, welfare expenditure remained high in these countries, compared to the European average. Social welfare reforms emerged from the Kanslergade Agreement of 1933 as part of a compromise package to save the Danish economy. Denmark was the first Nordic country to join
8658-400: The forefront of championing gender equality and this has been historically shown by substantial increases in women's employment. Between 1965 and 1990, Sweden's employment rate for women in working-age (15–64) went from 52.8% to 81.0%. In 2016, nearly three out of every four women in working-age in the Nordic countries were taking part in paid work. Nevertheless, women are still the main users of
8769-480: The front of the implementation of policies that promote gender equality; the Scandinavian governments were some of the first to make it unlawful for companies to dismiss women on grounds of marriage or motherhood. Mothers in Nordic countries are more likely to be working mothers than in any other region and families enjoy pioneering legislation on parental leave policies that compensate parents for moving from work to home to care for their child, including fathers. Although
8880-513: The global aerospace industry and research effort. In Russia , large aerospace companies like Oboronprom and the United Aircraft Corporation (encompassing Mikoyan , Sukhoi , Ilyushin , Tupolev , Yakovlev , and Irkut , which includes Beriev ) are among the major global players in this industry. Important locations of the civil aerospace industry worldwide include Seattle , Wichita, Kansas , Dayton, Ohio and St. Louis in
8991-560: The government labour market policies are designed to provide generous social welfare, job retraining and relocation services to limit any conflicts between capital and labour that might arise from this process. The Nordic welfare model refers to the welfare policies of the Nordic countries, which also tie into their labour market policies. The Nordic model of welfare is distinguished from other types of welfare states by its emphasis on maximising labour force participation, promoting gender equality , egalitarian , and extensive benefit levels,
9102-451: The key drivers of greater mobility. Additionally, Denmark's greater investment in public education did not improve educational mobility significantly, meaning children of non-college educated parents are still unlikely to receive college education, although this public investment did result in improved cognitive skills amongst poor Danish children compared to their American peers. There was evidence that generous welfare policies could discourage
9213-421: The large magnitude of income redistribution and liberal use of expansionary fiscal policy. While there are differences among the Nordic countries, they all share a broad commitment to social cohesion , a universal nature of welfare provision in order to safeguard individualism by providing protection for vulnerable individuals and groups in society, and maximising public participation in social decision-making. It
9324-623: The largest industrial bases in 2017 were the United States with $ 408.4 billion (representing 49% of the whole), followed by France with $ 69 billion (8.2%), then China with $ 61.2 billion (7.3%), the United Kingdom with $ 48.8 billion (5.8%), Germany with $ 46.2 billion (5.5%), Russia with $ 27.1 billion (3.2%), Canada with $ 24 billion (2.9%), Japan with $ 21 billion (2.5%), Spain with $ 14 billion (1.7%) and India with $ 11 billion (1.3%). These ten countries represent $ 731 billion or 87.2% of
9435-413: The last few decades, including increased deregulation and expanding privatization of public services . However, it is still distinguished from other models by the strong emphasis on public services and social investment. The Nordic model has been characterized as follows: The Nordic model is underpinned by a mixed-market capitalist economic system that features high degrees of private ownership, with
9546-530: The lowest poverty rate in the OECD of only 4.9%. Norway's "grand compromise" emerged as a response to the crisis of the early 1930s between the trade union confederation and Norwegian Employers' Association , agreeing on national standards in labour–capital relations and creating the foundation for social harmony throughout the period of compromises. For a period between the 1980s and the 1990s, Norway underwent more neoliberal reforms and marketization than Sweden during
9657-408: The market by using capitalism as a tool to benefit everyone" whereas in the United States " neoliberal politics puts the foxes in charge of the henhouse, and capitalists have used the wealth generated by their enterprises (as well as financial and political manipulations) to capture the state and pluck the chickens." Economist Jeffrey Sachs is a proponent of the Nordic model, having pointed out that
9768-460: The money supply and interest rates. Such policies are often influenced by international institutions like the International Monetary Fund or World Bank as well as political beliefs and the consequent policies of parties. Almost every aspect of government has an important economic component. A few examples of the kinds of economic policies that exist include: Stabilization policy attempts to stimulate an economy out of recession or constrain
9879-437: The more "cut-throat capitalism" of the United States, which has high levels of inequality and a larger concentration of top incomes, among other social inequalities. As a result of the Sweden financial crisis of 1990–1994 , Sweden implemented economic reforms that were focused on deregulation and the strengthening of competition laws . Despite this however, Sweden still has the highest government spending-to-GDP ratio of all
9990-762: The more encompassing term: " aerospace industry". In 2015 the aircraft production was worth US$ 180.3 billion: 61% airliners , 14% business and general aviation , 12% military aircraft , 10% military rotary wing and 3% civil rotary wing; while their MRO was worth $ 135.1 Bn or $ 315.4 Bn combined. The global aerospace industry was worth $ 838.5 billion in 2017: aircraft & engine OEMs represented 28% ($ 235 Bn), civil & military MRO & upgrades 27% ($ 226 Bn), aircraft systems & component manufacturing 26% ($ 218 Bn), satellites & space 7% ($ 59 Bn), missiles & UAVs 5% ($ 42 Bn) and other activity, including flight simulators , defense electronics, public research accounted for 7% ($ 59 Bn). The Top 10 countries with
10101-555: The only Nordic country to become a Eurozone member state after fully adopting the euro as its official currency in 2002. According to analyst Harpa Njálsdóttir, Iceland in the late 2010s moved away from the Nordic model towards the economic liberal model of workfare . She also noted that with the large changes having been made to the social security system, "70% of elderly people now live well below national subsistence criteria, while about 70% of those who live alone and in bad conditions are women." Despite this, as of 2021, Iceland has
10212-461: The other Nordic countries, as it was seen as "the guiding star of the north", and with Sweden fading away, other Nordic countries also felt like they were losing their political identities. When the Nordic model was then gradually rediscovered, cultural explanations were sought for the special features of the Nordic countries. The Nordic model has been positively received by some American politicians and political commentators. Jerry Mander has likened
10323-430: The previous approaches have been focused on macroeconomic policymaking aimed at sustaining promoting economic development and counteracting recessions, EBP is oriented towards all types of decisions concerned not only with anti-cyclical development but primarily with the growth-promoting policies. To gather evidence for such decisions, economists conduct randomized field experiments. The work of Banerjee, Duflo, and Kremer,
10434-613: The pursuit of higher-level education due to decreasing the economic benefits that college education level jobs offer and increasing welfare for workers of a lower education level. Some welfare and gender researchers based in the Nordic countries suggest that these states have often been over-privileged when different European societies are being assessed in terms of how far they have achieved gender equality. They posit that such assessments often utilise international comparisons adopting conventional economic, political, educational, and well-being measures. By contrast, they suggest that if one takes
10545-448: The reliance on family and market." According to Johan Strang, since the 1990s, politicians, researchers and the media have shifted to explaining the Nordic model with cultural rather than political factors. These cultural explanations benefit neoliberalism , whose rise this cultural phenomenon coincided with. By the 2010s, politics has been re-entering the conversation on the Nordic model. Some academics have theorized that Lutheranism ,
10656-400: The rest of the world with inequality, ill-health and needless poverty," economic anthropologist Jason Hickel sharply criticizes the "ecological disaster" that accompanies it, noting that data shows the Nordic countries "have some of the highest levels of resource use and CO2 emissions in the world, in consumption based terms, drastically overshooting safe planetary boundaries," and rank towards
10767-518: The rule of the Swedish king yet, as well as in Iceland where the Icelandic Commonwealth serves as an example of an unusually large and sophisticated peasant republic building on the same democratic traditions. Some historians have also argued that Gotland was a peasant republic before the attack by the Danes in 1361 . Central for the old Scandinavian democratic traditions was the assemblies called
10878-633: The same time frame, while still holding to the traditional foundations of the "social democratic compromise" that was specific to Western capitalism from 1945 to 1973. Norway was the Nordic country least willing to join the European Union . While Finland and Sweden suffered greatly from the 1990s recession, Norway began to earn enough revenue from their oil. As of 2007, the Norwegian state maintained large ownership positions in key industrial sectors, among them petroleum, natural gas, minerals, lumber, seafood and fresh water. The petroleum industry accounts for around
10989-438: The shareable parental leave (fathers use less than 30% of their paid parental-leave-days), foreign women are being subjected to under-representation, and Finland still holds a notable gender pay-gap; the average woman's salary is 83% of that of a man, not accounting for confounding factors such as career choice. The Nordic model has been successful at significantly reducing poverty. In 2011, poverty rates before taking into account
11100-522: The short term, then policy is likely to be incoherent, because a normal consequence of reducing inflation and maintaining currency stability is increasing unemployment and increasing interest rates. This dilemma can in part be resolved by using microeconomic supply-side policy to help adjust markets. For instance, unemployment could potentially be reduced by altering laws relating to trade unions or unemployment insurance , as well as by macroeconomic ( demand-side ) factors like interest rates. For much of
11211-434: The social democratic model, which is characterized by "a high level of decommodification and a low degree of stratification. Social policies are perceived as 'politics against the market.'" They summarized the social democratic model as being based on "the principle of universalism, granting access to benefits and services based on citizenship. Such a welfare state is said to provide a relatively high degree of autonomy, limiting
11322-616: The specifics of gender equality policies in regards to the work place vary from country to country, there is a widespread focus in Nordic countries to highlight "continuous full-time employment" for both men and women as well as single parents as they fully recognize that some of the most salient gender gaps arise from parenthood. Aside from receiving incentives to take shareable parental leave, Nordic families benefit from subsidized early childhood education and care and activities for out-of-school hours for those children that have enrolled in full-time education. The Nordic countries have been at
11433-490: The subject focuses on "historical specificity", with the centralized structure of the Lutheran church being but one aspect of the cultural values and state structures that led to the development of the welfare state in Scandinavia. The Nordic countries share active labour market policies as part of a social corporatist economic model intended to reduce conflict between labour and the interests of capital. This corporatist system
11544-479: The wage earner funds own predominant stakes in Swedish corporations on behalf of workers. This proposal was supported by Palme and the Social Democratic party leadership, but it did not garner enough support upon Palme's assassination and was defeated by the conservatives in the 1991 Swedish general election . Upon returning to power in 1982, the Social Democratic party inherited a slowing economy resulting from
11655-469: The way for the modern Finnish welfare state. During that process, the church lost some of its most important social responsibilities (health care, education, and social work) as these tasks were assumed by the secular Finnish state. Pauli Kettunen presents the Nordic model as the outcome of a sort of mythical "Lutheran peasant enlightenment", portraying the Nordic model as the result of a sort of "secularized Lutheranism"; however, mainstream academic discourse on
11766-458: The weakness of Social Democrats and the Left in general. Thirdly, the legislative process did not show a strong tendency towards consensus-building between government and opposition with regard to government seeking consultation or support for key legislation. Fourthly, the political style in legislative procedures and public debate in general tended to be adversarial rather than consensual in nature." In
11877-459: The whole industry. In 2018, the new commercial aircraft value is projected for $ 270.4 billion while business aircraft will amount for $ 18 billion and civil helicopters for $ 4 billion. In September 2018, PwC ranked aerospace manufacturing attractiveness: the most attractive country was the United States , with $ 240 billion in sales in 2017, due to the sheer size of the industry (#1) and educated workforce (#1), low geopolitical risk (#4, #1
11988-399: The work force in areas such as healthcare , education, and government), and a corporatist system with a high percentage of the workforce unionized and involving a tripartite arrangement , where representatives of labour and employers negotiate wages and labour market policy is mediated by the government. As of 2020, all of the Nordic countries rank highly on the inequality-adjusted HDI and
12099-500: Was bankrupt , Airbus, Boeing or Bombardier declined to take the 728JET /928JET large regional jet program as mainline and regional aircraft manufacturers were split and Airbus was digesting its ill-fated Fokker acquisition a decade earlier. On September 4, 2017, United Technologies acquired Rockwell Collins in cash and stock for $ 23 billion, $ 30 billion including Rockwell Collins' net debt, for $ 500+ million of synergies expected by year four. The Oct. 16, 2017 announcement of
12210-604: Was adopted influenced the wealth of different groups in society. With the accumulation of private capital in the Renaissance, states developed methods of financing deficits without debasing their coin. The development of capital markets meant that a government could borrow money to finance war or expansion while causing less economic hardship. This was the beginning of modern fiscal policy . The same markets made it easy for private entities to raise bonds or sell stock to fund private initiatives. The business cycle became
12321-457: Was weakened and no longer based on the social-democratic middle ground, as several social welfare policies were often permanently dismantled; however, Finland was hit even harder than Sweden. During the crisis, Finland looked to the European Union , which they were more committed and open to joining than Sweden and especially Norway, while Denmark had already joined the EU by the 1970s. Finland is, to date,
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