Does big government actually act as a facilitator of globalization, free trade, and open economies? The answer on this one is supposed to be no, of course not. Government mucks everything up, and burns your money in their big money chimney, and blah blah blah. But Denmark, Sweden, and other Nordic countries have, in recent times, acted as contrary evidence to this thesis. Their model, where an expansive social safety net reduces economic insecurity and thus reduces public fear of a dynamic economic system, has acted as a useful social democratic alternative to our system, where the losers of globalization are unprotected and uncompensated, and globalization is kept politically viable mainly through the support of elites. Among these two alternatives, the Nordic model has been painted as quirky and unsustainable. New research, however, suggests that the Nordic model is actually the historic norm for globalizing countries, while our approach is actually something of an aberration.
Which makes sense. Individuals are risk averse. When offered a new economic system which will increase their risk, but offer random and concentrated economic gains to people who likely aren't them, they're not generally terribly interested in switching over. If those economic gains however, were channeled into programs or institutions that protected them, and even made their lives better, things might be a bit different. That's what the Nordic countries have found, where social spending creates the political environment that facilitates a dynamic economy. America's found that elite support can trump popular anxiety, and so globalization can be furthered that way. But it' sprobably not the most sustainable approach.
