Why Can't America Be Sweden?

(Tons of interesting stuff in the news today. Writing a series of short blog posts without too much commentary.)

Thomas Edsall summarizes a debate among economists about whether or not America could provide government benefits that Scandinavian counties provide, like universal healthcare, paid maternity leave, and generous pensions.

Daron Acemoglu, an eminent economist at M.I.T., writes that if the America moved from cutthroat capitalism to cuddily capitalism, the entire global economy would suffer. Innovation and cutthroat capitalism go together like peanut butter and chocolate.

In a more detailed paper, “Can’t We All Be More Like Scandinavians?” Acemoglu, Robinson and Verdier expand on their argument that the world is dependent on American leadership in technology and innovation to sustain global growth. In order to maintain its position at the forefront of global innovation, the authors contend, the United States must maintain an economic system that provides great rewards to successful innovators, which “implies greater inequality and greater poverty (and a weaker safety net) for a society encouraging innovation.”

Edsall, of course, thinks that the status quo in America is unacceptable. He writes that we are no longer an egalitarian country, despite our rhetorical insistence that we’re the land of equality. Perhaps there is some way to provide a greater safety net for those at the bottom, while maintaining the incentives for innovation at the top.