Watchdog Blog

Carolyn Lewis: Government as a Spur to Innovation

Posted at 5:57 pm, March 8th, 2009
Carolyn Lewis Mug

True confessions up front: I have a soft spot for Scandinavia. It began when I spent a post-college summer studying at the University of Oslo. Later I married an Australian whose father was a Norwegian sea captain. We have lots of relatives living in Norway who keep me informed about what’s going on there. I’ve also traveled the byways of Norway, Sweden and Denmark, and have come to admire the sane and balanced lifestyle of the people who live there.

So when I hear some Americans – usually conservative Republicans – crying in alarm about “European-style socialism,” I know they haven’t the faintest idea what they’re talking about. They use the label to demonize a way of life they don’t understand and to short-circuit serious consideration of its pluses as well as its minuses.

It isn’t just that these countries provide democratic freedoms and a high standard of living to their citizens; they also offer a valuable safety net that includes childcare, healthcare, and eldercare. The rich may be less rich than the American rich, but there is less poverty. The countries are as wealthy as ours but the people measure their wealth in a different way. John McCain called Obama’s plans during the campaign “spreading the wealth” as though that was some kind of odious project. The other day Rush Limbaugh sneered that Obama believes in “community – and you know what THAT is – com-mune.” They use the language of fear when the truth is there’s no monster under the bed.

One argument put forward, that government intrusion into the markets stifles innovation, should be put to rest. The March 16 issue of Time magazine spotlights how little Denmark, population 5.5 million, is miles ahead of the U.S. in the employment of green power – and much of its success can be traced to strong government leadership. While our own free markets dithered, twenty years ago the Danish government “began a program of subsidies and loan guarantees to build up its nascent wind industry and mandated that utilities purchase wind energy at a preferential price – thus guaranteeing a customer base,” according to Time. Furthermore, “energy taxes were channeled into research centers.”

Today Denmark gets 19 percent of its electricity from wind and Danish companies control at least one-third of the global wind market.

The point is, governments can guide the market in ways that individuals may be too busy making a profit to see for themselves. This doesn’t have to crush innovation; it can inspire and support it. In the Scandinavian mindset, Time says, “cooperation is as important as competition.”

It’s a mindset we may need to copy in these days when the wild, unfettered free markets appear to be failing us. Of course capitalism will live on, but at the end of these long, dark years, it may look very different from the old form. It might even look like what they have in Scandinavia, and we would be damned lucky if that comes to pass.

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