While many economists judge Germany’s strategy the worst and America’s the best, the Scandinavian strategy can be considered a second-best strategy. Indeed, it is better to let people clean public parks, nurse children, and take care of the old in government facilities than have them do nothing, as in Germany. Even though GDP is artificially inflated, some useful activities are carried out.
Nevertheless, it might be better to let the market decide what kinds of products the low-skilled and less motivated part of the workforce should and could reasonably produce, which speaks for the American way of subsidizing wages. Thus, the Scandinavian way is more than a mere accounting trick, but it is also less than a truly recommendable strategy for coping with the challenges of globalization.
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