How America made Scandinavian social democracy possible

Ed Comment:Interesting stuff. A lot going on there. For me it's pretty simple. The long term name research shows poverty (and stupidity I'm guessing) last for centuries within families. No surprise, selective mating is powerful. I fear we are taking on immigrants who will be poor generations. WSJ today says there is a shortage of labor. I say: at what price? Serious men ask: who will pick the peaches? Should we flood the country with poor dumb labor until the wage is low enough that we can again manufacturing garments here instead of in Guatemala? Why not grow the peaches in Chile? Why do we want that labor here? Is it really cheaper to do it here than there when we give poor workers a safety net that works for people who can earn $75k/yr but demotivates those who can only earn $35k? If properly trained talent and supervision are today's binding constraints to growth, we ought to pick our supervisees very thoughtfully.

George Borjas Comment:How fascinating. This is exactly the point I make in my model of open borders. And that's why those trillion dollar bills on the sidewalk are full of s**t. I might blog about this if I ever come up from air. We are literally in the midst of downsizing and moving from Lexington to Cambridge. Thanks again.

Steve Comment: interesting"...The researchers suggest the migration flows, which were small relative to the native population of America but equivalent to about 25 per cent of the total population of Scandinavia, changed the character of Norwegian and Swedish society by removing the most ambitious and independently-minded people...."

It’s not inconceivable to believe the victory of the campaign to leave the European Union, with its heavy focus on the supposed costs of immigration, was a backlash to the rise of individualism by a collectivist rearguard as much as anything else. Whether this resurgent collectivism will make the median Briton any better off is less clear.

The UK might be the most striking case. In the decades since Thatcherclaimed“there is no such thing as society”, the composition of the UK population has changed markedly thanks to a large wave of immigration. The boom in inflows can only be partly explained by migration from southern and eastern Europe enabled by common EU membership. Regardless of the cause, over the same period, the UK became both far richer and far more unequal than it had been before.

Perhaps it’s no coincidence that America’s greatest period of social conformity and social democracy occurred when immigration was essentially zero. Similarly, you have to wonder about the connection between the strength of anti-immigrant parties in Scandinavia — part of the ruling coalitions inFinlandandNorway, propping up the minority government inDenmark— and the strength of their social market tradition. (Swedenseems to have fared somewhat differently but even there, the anti-immigrant party is one of the largest in parliament.)

If you want a highly individualistic society, with all the benefits and pitfalls that entails, you should want large-scale immigration, particularly from places that are far away. If you prefer more tight-knit communities and a large welfare state, you might prefer to avoid taking in ambitious nonconformists from abroad and instead try to get your own “troublemakers” to leave.

This presents interesting questions for policy.

Had it not been for America’s willingness to embrace enterprising nonconformist Scandinavians, “individualism” in Norway and Sweden would have been much greater and their particularly successful form of social democracy might never have been able to take root.

Individualistic types are more prone to migrate as they feel less attached to their surrounding social environment. In the sending population, this self-selection generates a push towards collectivism.

This wasn’t just a coincidence. Focusing on the people who actually left Norway and Sweden for America, it turns out they were much more likely to have “unusual” names for their region than those who remained in Scandinavia. As the authors conclude:

They found that while “individualism” rose modestly overall, the places with more emigration became relatively more “collectivist” than those regions with less emigraton. Here’s a simple version:

The researchers have access to all the names of people who lived in Norway and Sweden throughout the great migration wave, as well as all the names of the people who left for America. They also have the same information broken down by locality for a more fine-grained analysis.

The methodology centres on names. Psychologistshave long foundthat people with relatively rare names are more likely to be “unique”, presumably because parents who consciously choose rare names for their children would be more likely to raise them to be nonconformists.

In other words, Scandinavian social democracy might not be possible without America’s historic willingness to absorb those who refused to follow the “Law of Jante”

The researchers suggest the migration flows, which were small relative to the native population of America but equivalent to about 25 per cent of the total population of Scandinavia, changed the character of Norwegian and Swedish society by removing the most ambitious and independently-minded people.

Research presented at theannual conference of the Economic History Societysuggests the stereotype fairly describes the outcome of migration from Norway and Sweden to the United States in the second half of the 19th century. (Thanks to Romesh Vaitilingam for pointing it out to us.

Hence the not-unreasonable stereotype that places largely populated by voluntary migrants and their descendants — such as the United States — are more entrepreneurial, wealthier, and more unequal than source countries, such as Europe.

Migration waves of that scale and concentration are quite rare, of course. More common is for relatively small groups to move from one place to another, with the adventurous leavers generally quite different in temperament and ability than those who stay behind. Rather than transferring their native societies’ virtues and vices wholesale, these migrants bring with them a far more individualistic version of their culture than wherever they came from.

If everyone in Mexico (about 130 million people) moved to Texas (current population: about 28 million people) tomorrow, it would be reasonable to imagine that life in Texas would become somewhat more like life in Mexico is today.

Change enough of the people in a society and you end up with different one.