Post Brexit, Let's Capitalize on the Nordic Model

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Brexit did not really come as a shock to those who understood the undercurrent of disappointment and constant fear of millions of Brits regarding their future, driving them to protest through their support for leave. Living a life in fear long term is not an option, there comes a moment when one says, enough is enough, it is better to act, than live in continued uncertainty. At that moment reason easily gives way to irrationality. It is now commonplace that the Leave vote was mostly about the clash between the winners and losers of globalization, technological progress and openness, between the elites and the left-behinds. Brexit became an obvious possibility when all of the above was combined with the botched handling of the migration crisis and the bad solutions that transpired from Europe's leaders.

Now the bashing of the Brits is beyond any imagination. But be careful and be responsible: we need Britain for the future of "Europe", even in the context of the urgent and inevitable rethinking of the European Union. Gut reaction to a complex and geostrategically serious moment in history is dangerous. Politicians who are rushing to punish the Brits say they are "saving Europe", but in fact a great number of them are only looking to taking advantage of a bad situation. They must put their honest or faked disappointment behind them as soon as possible and get on with figuring out what's next. Brexit should be a warning to us all in the West, including America, about the dangers lying ahead.

The problems we face are not just about the U.K. Brexit is a symptom of social discontent, the weakness of our democratic institutions, the lack of leadership. The transatlantic community must very quickly move into a mode of serious and deep reflection. As an immediate task it needs to concentrate on localizing the "fire", in order to prevent a full blown and devastating wildfire, which would destroy everything in its path. The danger of contagion is real. We cannot avoid deep structural changes in our societies, in the economy, in social policies, in the partnership between capital and labor, redistribution of wealth, ones we were not willing to take in the past. We must look for mindsets, solutions and models that might just help save our way of life. For have no doubt, going down the road of populism leads to autocratic regimes, even dictatorships, which will also lead to the destruction of the transatlantic community as we know it. It would undermine the foundations of democratic societies, the only ones to provide the freedoms so important to finding lasting answers to global economic, scientific, climate and technological challenges.

The Nordic countries immediately come to mind as sources of inspiration. Denmark, Finland, Iceland, Norway and Sweden are countries which have found ways to balance wealth and compassion, capitalism and the welfare state, remaining industrious and competitive, but caring for the weakest, providing opportunities and a decent life for the vast majority in their societies. Theirs are models based on an understanding, that before you can distribute wealth, you have to produce wealth. They are "capitalism with a heart", but certainly no socialist-utopia. There is a reason why they are first-in-class by many measurements.

I am well acquainted with each one of them and I have no illusions about the problems they have, the decisions they need to take in order to adjust their enviable social-political model, which is being tested by European and global challenges. They are not immune to threats from within and abroad. I see their struggles, I see the tensions within their societies, even the stress among them as a group. But then there is a reason why the U.S. President treated them to a summit as a group in Washington in May this year: because of their successes, because of their pragmatism, because of their exceptional ability to find solutions.

The Nordic countries must not back down on their model. Facing the above, they should push harder than ever to achieve to the fullest the goals of those who created the "social-democratic dream", maintaining the benefits of a market economy for healthy competition, wealth creation, and innovation but with a desire for equal opportunity and a level playing field for all. They should look back at their wise leaders who early on understood that excessive inequality in society will not only lead to unrest but it could lead to paralysis, to dangerous social experiments and political developments. These are models which, as history shows, were devastating to democracy at home and peace internationally.

Three Nordic countries are members of NATO and three are members of the European Union, an interesting asymmetry of memberships, with only Denmark being a member of both. But have no doubt; they are all an important pillar of the transatlantic community. They are very well positioned to be a solid bridge between Europe and the United States, during a time when other links are weakened. They have been told frequently by U.S. leaders that they punch above their weight. Well, this is a good moment to show how much their punch is worth. They can help keep the negative tendencies among members of the EU in check. They can help strengthen the EU and NATO. But they could also become a center of gravity for other countries, not first and foremost geographically, but in thinking and values. They are proof, that embracing openness in a globalized world, and not isolationism is the solution.

Perhaps there are two axioms the Nordic countries have understood: socialism as experienced in Eastern Europe did not work and capitalism cannot be wiped out. Therefore the solution is not killing capitalism, but giving it a strong social streak. Very few countries have done a great job in combining both.

The Nordic countries are among those few.