The Scandinavian model of social democracy, particularly in Norway, has proven to be highly successful. It combines a strong welfare state with regulated market forces to achieve both economic growth and top social outcomes. However, many Scandinavian countries adopted neoliberal policies in the 1990s, which led to economic crisis in Iceland. Iceland was able to recover by rejecting neoliberalism and returning to the social democratic model of state intervention and social protections. The success of Scandinavian social democracy demonstrates it is the most just and viable alternative to liberalism and neoliberalism.

1. 1
SOCIAL DEMOCRACY SCANDINAVIAN MODEL AS AN ALTERNATIVE TO
NEOLIBERALISM IN THE WORLD
Fernando Alcoforado *
Throughout history, liberalism, socialism and neoliberalism have failed in building an
economic society, socially and politically viable in countries around the world leaving
behind the barbarism that characterizes the world we live in. To end the barbarism,
promote economic and social progress and establish a civilized coexistence among all
human beings urge the building of a new model of society. By analyzing the model of
social democracy implanted in the world, it appears that it was in Scandinavia where
there was the most successful among them all despite the need for improvements to be
presented in the conclusions of this article.
1. The experience of social democracy in Scandinavia
The Nordic model or Scandinavian social democracy could best be described as a kind
of middle ground between capitalism and socialism. It is neither fully capitalist nor fully
socialist, with an attempt to fuse the most desirable elements of both in a "hybrid"
system. In 2013, magazine The Economist stated that the Nordic countries are probably
the best governed in the world. The UN World Happiness Report 2013 report shows
that the happiest nations are concentrated in Northern Europe, with Denmark at the top
of the list. The Nordic have the highest rating in real GDP per capita, the highest
healthy life expectancy, greater freedom to make choices in life and the greatest
generosity.
Among the Scandinavian or Nordic countries, Norway is the most successful in the
world, with the State Social Welfare characterized by a lot of equality and much social
justice. In Norway, does not thrive inequality, selfishness, individualism characteristics
of liberalism and neoliberalism. 100 years ago, Norway became the condition of one of
the poorest countries in Europe, living with ice and darkness for half the year to be
synonymous with wealth and social justice with a GDP (Gross Domestic Product) per
capita of US$ 100 thousand. Norway prioritizes spending on education that is
guaranteed for the entire population. In 30 years, the Norwegians have reduced their
working hours in 270 hours, earning more than ten days of vacation per year, and a
significant part of workers can now work only four days a week. According to the UN,
never a society has achieved a level of human development equal to that of Oslo, capital
of Norway. In addition, Norway translated oil in prosperity and equality [See the text
Noruega, um paraíso com muito Estado Social, serviços públicos e impostos (Norway, a
paradise with very welfare state, public services and taxes) on the website
<http://blogdotarso.com/2014/04/13/noruega-um-paraiso-com-muito-estado-social-
servicos-publicos-e-impostos/>].
Even in an age of austerity and global crisis, the State System of Social Welfare in
Norway remained intact, with a minimum salary of US$ 4800 and unemployment is
2%. Norway was the country that less felt the global crisis that erupted in 2008 in the
United States. In Norwegian elections the only debate is what to do with the money left
in the public coffers. Norway has the largest sovereign fund in the world, estimated at
US$ 815 billion and are flush in the state coffers. The Norwegian state bought 1% of
shares in exchanges around the world and invests in 3,200 companies. In Norway there
is a strong state presence in virtually all fields of economy, since after the 2nd World
War, when the government nationalized companies linked to Germany. The state got

2. 2
44% of the shares of Norsk Hydro, has a stake of 37% in the Oslo Stock Exchange and
in dozens of companies. Today the state of Norway controls the oil Statoil, the Telenor
telecommunications group, the manufacturer of Yara fertilizers, and the largest bank in
the country DnBNor.
Norway unions negotiate their salaries every year, depending on the needs of the export
sector and to ensure that the national product to remain competitive in the global
market. In Norwegian elections political parties promise not to cut taxes. In the State of
Social Welfare in Norway men take care of their babies and each year the government
allocates 2.8% of GDP to support families everything they need to have children.
Parents who decide not to take the kids to daycare centers receive, every month, a check
for US$ 200 to help in spending. There citizens receiving social benefits from the state
are not called bums. It is a legitimate right [See the text Noruega, um paraíso com muito
Estado Social, serviços públicos e impostos (Norway, a paradise with very welfare
state, public services and taxes) on the website
<http://blogdotarso.com/2014/04/13/noruega-um-paraiso-com-muito-estado-social-
servicos-publicos-e-impostos/>].
Norway maternity leave is 9 months for the mother and four months for parents. In
these months the state pays the salary of the parents. The government estimates that
these incentives for women and laws to ensure gender equality are positive for the
economy. Companies are required to give 40% of the places in their advice to women.
75% of women work out and the government that is more activity in the economy and a
greater number of people paying taxes. In Norway the income tax reaches 42% that is
higher than in Brazil. There is consensus that the value is just to keep the system. The
state pays from the nursery to the funeral, finance students and even holiday. The
Norwegian model of society is the minimum expected for a just society. The rest is
barbarism.
For these reasons, Scandinavia, particularly Norway, is the birthplace of more
egalitarian model that capitalism has ever known. It dates back to Sweden of the 1930s,
more precisely 80 years ago, when concretized the social democratic hegemony in the
Nordic country government, setting off a series of social and economic reforms that
would usher in a new kind of capitalism, as opposed to liberalism of previous decades
whose final act was the crisis of 1929. It was the birth called the Scandinavian model,
which quickly exceed the Swedish borders to become influential in northern Europe, but
also an important reference in the formulation of heterodox economic policies
(progressive) throughout the planet. The success of this model is due to the combination
of a large State of Social Welfare to strict regulatory mechanisms of market forces, able
to put the economy on a dynamic path, while reaching to the best health social
indicators between capitalist countries.
2. The Scandinavian social democracy in the face of neoliberalism climbing
According to Immanuel Wallerstein, American sociologist and university professor,
social democracy had its heyday in the period between 1945 and the late 1960s. At that
time, represented an ideology and a movement that advocated the use of state resources
to ensure some redistribution in favor of the majority of population by several concrete
ways: expansion of health and education systems, income levels guaranteed lifelong
through support programs to the needs of jobless groups, particularly children and the
elderly and programs to minimize unemployment. Social democracy promised a future
always better for future generations, a sort of permanent increase in the national income

3. 3
and families. It was called this a "state of social well-being." It was an ideology that
reflected the point of view that capitalism could be “reformed” and acquires a more
human face [WALLERSTEIN Immanuel. A ilusão social-democrata (The social
democratic illusion). Published on the website <http://www.esquerda.net/ opinion /
AU% C3% A3o-social Democrat />].
According to Wallerstein, the Social Democrats were particularly powerful in Western
Europe, in Britain, Australia and New Zealand, Canada and the United States (where
they were called the New Deal Democrats) - in short, in the rich countries of the world
system, those that constituted what might be called the pan-European world. Its success
was so vast that in the rest of the world, many countries to go up in this carriage,
through projects of national "development". Social democracy was a very successful
project during this period. It was supported by two realities of that time: the incredible
expansion of the world economy, which created the resources that made possible social
redistribution and the United States hegemony in the world system, which ensured its
relative stability and, in particular, the absence of serious violence within this rich area.
This would come, however, to finish. The world economy failed to expand and entered
in a long stagnation in which we still live; and the United States began their long, albeit
slow, decline as the hegemonic power. These new realities have accelerated
considerably in the 21st century.
From the 1990s, a new wave of liberalism reaches the world with the advent of
neoliberalism that spilled over the planet. The orthodox recipe (conservative)
implemented in the Scandinavian countries, starting with Sweden itself, essentially
aimed at financial deregulation and the flexibility of the labor market. The logic of these
reforms was, as usual, remove the chains present in the economy in the form of rules
and institutions so that the market could allocate resources (capital and labor) in the
most efficient way possible. As occurred in all capitalist countries, preached to wage
cuts, reduced taxation and capital controls as a way to resume the stimulation of
business activity. Neoliberal economists thought they had found the magic formula to
remove the capitalism of stagnation that existed all over the world [See the text Modelo
nórdico (Nordic model) published on the website
<http://pt.m.wikipedia.org/wiki/Modelo_n%C3 B3rdico%>].
Coincidentally, a small Scandinavian country social democrat, Iceland, faced one of the
worst crises in its history. There, the chronic economic and social situation caused by
neoliberal policies led to an unprecedented challenge in Western Europe of the
deregulation of markets strategy. It should be noted that Iceland was the first country to
feel the effects of the global capitalist financial meltdown. Its main banks were strangers
and put the Icelandic economy in a financial maelstrom that anticipate, small-scale, the
effects of the global crisis that erupted in 2008 in the United States. The speculative
bubble produced with the savings of the population finally broke when it was revealed
that banks would not be able to guarantee the deposits because they had invested in the
notorious United States mortgage securities. The collapse brought the country to ruin.
As a result, unemployment exploded and an impressive number of Icelanders left the
country.
3. Rescuing the social democracy in Scandinavia after the neoliberal catastrophe
in Iceland
After the crisis, it was erupted in Iceland a organized civil resistance movement. The
results were not long: the Conservative government was defeated at the polls and

4. 4
replaced by another social Democratic majority that decided to break with neoliberal
orthodox view of the free market. The new government began to intervene directly in
the exchange, producing a devaluation of the local currency, were resumed the controls
on capital and investments in the social security system, and the banks were
nationalized to ensure liquidity citizens. Iceland was thus able to avoid a greater evil
and, above all, to draw attention to the need to rescue the Scandinavian social democrat
model. The key to this model was the ability to establish between civil society and elites
a national pact in which they would give up the unjustified abundance in living to
contribute to a larger goal, the well-being of the population.
For such a turnaround, had been decisive the initiative of Swedish economists, led by
Gunnar Myrdal, who in the early twentieth century would provide the theoretical
foundation for a social democratic alternative economic policy. The School of
Stockholm, as would be named this branch of heterodox economic thought, denounced
the evils of liberalism and demonstrated the primacy of household demand to resume
cycles of economic boom, in contrast to innocuous stimuli supply that characterized
(and still feature) liberal and neo-liberal conservative view. Today, the Scandinavian
once again alert the world to free market forces equivalent to open a real "Pandora's
box" catastrophic. For those who still fall into this temptation, is the message of the
Icelandic experience. Iceland revolution rescued the heterodox tradition of Scandinavian
economists, whose reflections inspired the writing of a new constitution in the country,
aiming at the resumption of social control over economic resources as the essential path
to independence and prosperity. To argue otherwise is to support an injured dogma of
death with the global crisis.
4. Conclusions
Despite the success of Scandinavian social democracy, the new social democratic model
should result from the improvement of what is called social democracy Nordic or
Scandinavian practiced in Denmark, Norway, Sweden and Finland. Despite their
differences, they share some common features: state of well-being and social
universalist that is geared to enhance individual autonomy, promoting social mobility
and ensuring universal provision of basic human rights and stabilizing the economy. Is
distinguished also by its emphasis on the participation of the workforce, promoting
gender equality, reducing social inequality, extensive levels of benefits to the population
and large magnitude of redistribution of wealth [See the text Modelo nórdico (Nordic
model) published on the website <http://pt.m.wikipedia.org/wiki/Modelo_n%C3
B3rdico%>].
It was social democracy ever built, especially in Scandinavian countries, the only model
of society that allowed economic, social and political simultaneous advances with the
State, even of the service of capital, acting as a mediator of conflicts between the
interests of capital and Civil Society. It is no accident that the Scandinavian countries,
in addition to presenting great economic and social achievements, are leaders in HDI
(Human Development Index) in the world. Unlike, liberalism and neoliberalism where
the State is always in the service of capital and civil society is marginalized, and
socialism where the state is at the service of a party or a group in power and civil
society is also marginalized, the social democracy of the Scandinavian countries
avoided the occurrence of the excesses of liberalism, socialism and neoliberalism.
Despite the great success of social democracy practiced in Scandinavia, the social
democracy of the future should result from the improvement of the current model that

5. 5
would operate with a tripod structured on the basis of a neutral State, civil society
organizations active and productive sector (state and private) efficient and effective. The
neutral State would seek to reconcile the interests of the productive sector (state and
private enterprises) with Civil Society mediating their conflicts in several instances of
executive and legislative powers and, when not achieved consensus, the final decision
would be up to the people who would decide democratically by plebiscite and / or
referendum. In the new social democracy, should not be allowed the action of monopoly
groups and private cartels in the economy. Private companies would act only in
economic sectors where there is competition. State or mixed enterprises occupy the
economic sectors where it was not possible to have competition.
Brazil that suffer the adverse effects of the devastation produced on the Brazilian
economy by the neoliberal model introduced by Fernando Collor in 1990 and
maintained by Itamar Franco, Fernando Henrique Cardoso, Lula and Dilma Rousseff
governments should be inspired by the Scandinavian social democracy to reverse the
situation current, whose balance is extremely negative from every angle. The current
stagnation of the Brazilian economy that is at the moment will deepen in the coming
years should take place simultaneously with the rise in inflation rates which result the
stagflation phenomenon. Most likely, it will grow the deficit in the balance of payments
due to the fall in export revenues and an increase in remittances of profits and dividends
by multinational companies that have grown dramatically in recent years, far outpacing
the value of interest remittances of foreign debt.
As far as dollar inflows to cover the deficit in the balance of payments, foreign direct
investment, in turn, tends to also fall due to likely decline in the growth of the Brazilian
economy. No foreign investor would invest in Brazil with a stagnant economy as it is
right now. The stagnation of the Brazilian economy will cause there are also
government revenues fall at all levels so that there is no public resources for investment
in sufficient quantity to invest in economic and social infrastructure, as well as to
maintain the social income transfer programs as the "Bolsa Familia".
The maintenance of the neoliberal model in Brazil will result in deepening
denationalization of what remains of public assets in Brazil and, consequently, a greater
subordination of the country from the outside. The results are in: meager economic
growth, inflation above-target, external imbalances, economic stagnation, and now also
kick in the social achievements. A seriously government committed to the defense of
national sovereignty, the progress of Brazil and the social welfare of its population have
to necessarily repel this scenario replacing the neoliberal economic model by social
democrat model of selective and controlled opening of national economy that would
certainly make the country less vulnerable to attack by speculative foreign capital with
the government exercising effective control of the economy, and help to revive the
national development. The neoliberal revolution of Iceland should inspire the writing of
a new Constitution in Brazil, as did the Icelandic, in order resumption of social control
over economic resources of the country as the indispensable way to independence and
national prosperity.
*Fernando Alcoforado, member of the Bahia Academy of Education, engineer and doctor of Territorial
Planning and Regional Development from the University of Barcelona, a university professor and
consultant in strategic planning, business planning, regional planning and planning of energy systems, is
the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova
(Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São
Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado.
Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e

6. 6
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX
e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of
the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe
Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e
combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011),
Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012) and
Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV,
Curitiba, 2015).