World econ strengthens in December

The big 5 PMI rose sharply in December, mostly because of a jump in the USA's services component, but the other components also ticked up.  Remember, these are "flash" estimates, and could be revised.  The big 5 PMI covers economies representing just over 50% of world GDP, and is a GDP-weighted average of the USA, the Euro zone (EA), UK, Japan and India.   "Flash" estimates for China, Brazil and Russia are not released.  As usual, to calculate the big 5 totals, each country's PMI for manufacturing and for services is extreme-adjusted, and then weighted by that country's GDP, before being added up.  The total (i.e., average) PMI for the big 5 correlates well with GDP for the these countries.  If the index is above 50%, GDP is expanding, and the higher it is above 50%, the faster it is expanding.  

Asia booming

 This chart shows the average (GDP-weighted) PMI for Asia, i.e., Japan, China, India, Indonesia, Taiwan, Korea, Malaysia.  Still to add Thailand and Vietnam to the calculations.

Asia (+-30% of the world economy) is picking up nicely, rebounding from the impact of draconian Chinese covid lockdowns.

The implications for Central Bank policy are obvious.  

China's industrial production is picking up

 At least, if you trust the official data.   I know GDP data are massaged.  Is China now starting to "improve" other time series too?  I don't know.  For what it's worth, here's what IP looks like.  There are other indicators which are starting to hint at a Chinese economic recovery, such as the iron ore price and the Chinese steel price and paper pulp price, as well as a recovery in the stock market.  But other indicators, such as retail sales and car sales, are weak.

My estimate is that China makes up something like 15% of the world economy, but it's hard to be sure, because official GDP data are clearly materially overstated.

Nigeria PMI recovers after bizarre bank note crisis

 Nigeria is big relative to Africa, but small relative to the world, making up just 0.45% of world IP.  

Africa has become much more interesting over the last few years because its growth rate has increased.

And Nigeria's bank note crisis is very bizarre.

Anyway, Nigeria's growth is likely to pick up.  Although the US and Europe are sliding into recession, not all countries are following them down.  So far.

Note: the chart shows the merged time series of the Central Bank's eco survey and the PMI survey, hence the scale.

Africa: growth outperforms

 As far as I know, no one else actually calculates quarterly GDP or monthly industrial production for Africa.   I've used higher frequency official data, where available, for industrial production and GDP, and annual data before that.  In some cases, I have estimated quarterly/monthly data using my variant of the Chow-Lin technique.  Ethiopia, for example, publishes no monthly or quarterly GDP or IP time series, so I have used annual GDP/IP time series and estimated quarterly series using the dollar value of imports as estimator.   My variant of the Chow-Lin technique forces the quarterly data to add up to the annual data (a kind of benchmarking), so the quarterly data should show similar rates of change and growth to the annual data, but they will give a clearer idea of cyclical turning points.

The countries included are the 10 largest (in terms of GDP) plus a couple of others, covering 78% of Africa's GDP.  Weighting is a problem, one I've been meaning to address for a while.  I have used PPP GDP for 2007, but I would like to switch to a system of variable weights and a chain-linked calculation, which will be much easier to do using constant price dollar-valued GDP (using the Maddison Project GDP estimates).   The variable weights calculation involves wrestling with the maths, the coding and the data, so I keep on postponing the evil day.  I'll get there eventually.  

As the first chart shows, GDP is less volatile than industrial production, which is what you'd expect.  It also suggests (since IP is more up to date) that GDP will likely go negative this year.  However, Africa's IP spiked up in May as Nigeria rebounded after a bizarre bank note crisis, but this spike has been removed by my extreme-adjustment algorithm.  So the decline in IP is not as fierce as it appears from the chart*.  Watch this space,

The second chart shows GDP for Africa relative to my calculation of world GDP.  (My world GDP calculation is a couple of quarters out of date --- I haven't updated it yet.)  African GDP has been outperforming world GDP since 2000, though before that growth in Africa was less than in the world as a whole.   Since the chart uses a log scale, a straight line would show a constant growth rate.  Note how, even though Africa continues to grow faster than the world as a whole, its growth rate slowed as world growth slowed after the GFC.  I'll talk more about this slowdown in world growth in later posts.

Africa makes up only a small percentage of world GDP (±2.5%), at least based on 2007 PPP weights, but its rapid growth means that that is more like 4% today, putting Africa as a whole as big as Germany.  This rapid growth is one of the reasons why I would like to move to calculations using moving weights.

The chart will be clearer if you click on it.
Note logarithmic scale.

In a sense, both the GDP and IP calculations are experimental, or at least, likely to be amended as I improve both the data and my programs.  However, the broad conclusions are unlikely to change.

* [Update:  see this post, which shows both the original and the extreme-adjusted year-on-year percentage changes in African industrial production]

The big movers in the world economy

 This chart shows the countries responsible for 80% of world economic output.  The weights are getting a bit old, and these days, China is prolly bigger, with the others proportionately each a little smaller.  Nevertheless, it still gives one a good idea of which economies to watch to see what's happening in the world.  

I'm in the process of adjusting my programs to allow for variable GDP weights when I calculate things like world industrial production or the 'Big 8' PMI.  But it's a big task, and I'm wrestling with the maths and the coding.  Don't hold your breath.

What on earth is happening in China?

From The Age

China’s lurch from extreme zero-Covid to extreme herd immunity is a watershed moment in the global ideological struggle of our age, an unanswerable illustration of why autocratic regimes are less successful in the end than messy liberal democracies.

Leadership cults and totalitarian media control can at times enable breathtakingly destructive policies, and it is hard to think of a policy more unhinged than suddenly exposing a “naive” population with inadequate vaccination to mass infection in mid-winter, and just before the great internal migration of Chinese New Year.

What was the purpose of lockdown torment - and the economic slippage that came with it - a full 18 months after the rest of the world had reopened and moved on?

Most regional governments are suppressing COVID data but Zhejiang province south of Shanghai, with a population the size of England, says it faces a million new cases a day. It expects the figure to double again this week. Sichuan is in the eye of the storm already.

China’s National Health Commission fears that up to 37 million people a day are being infected and that 248 million caught the virus over the first 20 days of December, according to leaked but unverified minutes posted online.

To the extent that successful COVID management has been mobilised over the last three years in the beauty contest of the new cold war, this portends a public relations disaster for China’s authoritarian model. The breakdown of the Chinese hospital system cannot be hidden. To rub salt in the wound, wealthy Chinese have been converging on Macau in search of a Western mRNA vaccine.

President Xi Jinping brooks no questioning of his policy pirouettes from within the Communist elites. “We should resolutely toe the Party’s line. We must never deviate from the notes,” he told the Politburo at a “self-criticism” session this week, a Maoist practice back in vogue.

The Party’s briefing “notes” in this episode state that dynamic zero-Covid was an unqualified success and demonstrated the superiority of China’s Communist system over the feckless and immoral West, but that it can now be cast aside because omicron is “just like the flu”.

This is scientific malpractice and the Chinese authorities know it. A high-powered US study by Johns Hopkins University found that the risk of severe disease or death from omicron was “similar to ancestral lineages” (other than delta) among those either unvaccinated or never exposed to the disease.

This would include the original Wuhan strain but also the Kent variant that killed large numbers in the UK’s second wave just as the vaccine rollout was starting.

A new preprint from Queensland’s Berghofer Institute says omicron’s BA.5 sub-lineage attacks the brain and “shows increased neurovirulence compared to earlier omicron sub-variants” in mice. It is not yet reproduced in human studies.

To throw open the borders at this moment and disgorge planeloads of infected travellers on the world comes close to a hostile act, given the known risk of new variants arising. Tests found that 62 of the 120 passengers on a flight from Beijing to Milan on Dec 26 were positive.

The British Government is taking a major gamble by letting in any flights from China at a time when the National Health Service is already stretched and at the peak of the viral season. This has echoes of those first fatal weeks of insouciance after the Wuhan outbreak in early 2020.

The astounding feature of China’s big bang reopening is the near-total lack of preparation. The regime has gone overnight from welding people into their apartment blocks to stamp out a single urban case, to the opposite absurdity of compelling infected workers to return to the factory floor for the higher cause of GDP.

Little was done in advance to plug the vaccination gaps. As of mid-December, almost a quarter of the over-80s had never had a single jab. A third of the over-60s had the original two doses of patriotic vaccines but no booster. None has received Western vaccines with better efficacy and cell memory, even as part of a mix and match.

“If China had said that zero-Covid was only a temporary measure to buy time until people got vaccinated, and communicated the policy accordingly, they would be in a far better position right now,” said Prof Ben Cowling from Hong Kong University in an analysis for The Lancet.

But Xi’s government did not do so. It claimed instead to have defeated the virus by tracking every infection with omnipotent surveillance. It led people to think that vaccination was not necessary. China has just 3.6 intensive care beds per 100,000 people, compared to 34 in America, or 29 in Germany. The ratio of nurses is a quarter of Western levels. The regime has spent heavily on testing, isolation camps, and quarantine facilities - mostly useless at this point - and neglected the hospitals.

Fifteen years ago, I attended a panel session in Davos with a leading Chinese demographer who predicted that his country’s ageing crisis would prove so overwhelming that the elderly would be sent onto the ice to die - figuratively speaking, he meant mass euthanasia.

Let us hope that we are not seeing this Darwinian cull in action. Consultants Airfinity concluded last month that 1.3 million to 2.1 million could die, but that was based on maximum infections of 279 million. Feng Zijian, ex-deputy director of China’s Centre for Disease Control, thinks infections are more likely to top 800 million, or 60 per cent of the population.

Whatever the grim tally, the coming weeks are going to change the world’s view of Xi’s China, and it coincides with a change in economic perception: global opinion has stopped believing in the fairy tale of Chinese perma-growth. The fence-sitters of the international system - what we used to call non-aligned countries - no longer think it quite so inevitable that China will displace the US as economic and regulatory hegemon by mid-century. The Saudis may be raising their geopolitical bets on China, but others are quietly hedging.

The economic rot set in before Xi. The Party leadership misread the Lehman crisis of 2008, supposing it to be a fundamental crisis of American laissez-faire capitalism and a vindication of state-directed Leninist capitalism. But it was China that suffered the deeper damage. The effect was to side-line reformers warning that China would slip into the middle income trap if it clung too long to an exhausted catch-up model.

Xi has finished the job, more or less guaranteeing the collapse in China’s growth rate by subjecting the productive part of the economy to the same sledgehammer methods used against COVID.

His assault on tech companies and private enterprise - installing party commissars at every level of management - is systematically undermining the market dynamism nurtured by Deng Xiaoping 40 years ago. But such is the logic of a totalitarian party that lives chiefly for its own perpetuation. It cannot give up the state-owned industrial behemoths that serve as a patronage machine for the cadres and a lever of political control; nor can it allow commercial fiefdoms such as Jack Ma’s Alibaba to emerge as a rival centres of power.

It has been a bad year for China and for the alliance of autocracies. Iran is beyond the point of pre-insurrection. Russia has been exposed as a second-rate military power with a deranged political culture. The West has shown the long-reach of its economic, financial, and maritime power - almost irresistible when the whole G7 acts unison - and has shown the superiority of its military technology and signals intelligence. Oppose that if you dare.

Was Francis Fukuyama so wrong after all in The End of History? Liberal democracy may not be the end state of human political progress, but it may well have more staying power than the dictatorships this century.

Observe how, until the GFC (2008/2009), growth was accelerating,
and how since then it's been decelerating.
Note also the Covid plunge in 2020, and, an artefact of the year-on-year calculation,
the 2021 spike.

 

China will slow in the long term

From a Tweet by Michael Pettis

So why will the {Chinese] economy continue [to] slow? Because of the same old problems that have existed for over a decade and that have only intensified in recent years: an overstretched and massive property sector, substantial amounts of non-productive spending on excess infrastructure, stagnant consumption growth, an over-reliance on debt to generate economic activity, institutional rigidities that make it hard to restructure the economy, a banking system totally underpinned by moral hazard and, of course, demographic decline. China's economic slowdown is the necessary consequence of a very unbalanced economic model that generated enormous amounts of real growth before making itself obsolete. This story has happened so many times before that we don't need to explain it with sudden policy shifts.

 

Economic importance of Asia keeps on rising

 Industrial production of Asia continues to grow faster than the industrial production of the world.  Different countries have led the way over the years: Japan, then SE Asia, then China.  But on the whole (there are one or two exceptions, these days including Japan) most economies in this region have higher growth rates than Europe or America.  

This is to be expected:  as economies move from undeveloped to developed, trend growth rates fall, eventually reaching the long-term limits set by technological advance and population growth.  So Japan, which grew by 10-15% a year in the 1950s, now manages just 1-2% a year.  Chinese trend growth has already started to slow, and over the next decade, Asian growth as a whole will continue to trend lower.  

As the chart is plotted on a log scale, you can see how the relative growth rate is slowing as the slope of the line diminishes.

Note the impact of the 1998/99 Asian crisis.  

The data shown are from my calculations.

Momentum in US econ drifting lower

 The two manufacturing PMIs for pan-US activity showed opposite signs in April, the IHS Market one strengthening, the Institute of Supply Management (ISM) one falling.  As usual, my recommendation is to watch the average of the two ― the green line in the chart below.  Reminder:  any data point above 50 still shows an expanding economy, but a fall in the PMI shows that it is expanding more slowly.  But, at current levels, these indicators are still at or above previous cyclical highs.  Which shows that the economic is still expanding fast.

Whole-economy ISM still quite strong

 The whole-economy (manufacturing + non-manufacturing) ISM (Institute of Supply Management) index is down from its recent post-covid rebound, but is still at the sort of levels we've seen in the past associated with strong economic growth.  But the Fed is raising rates.  Chances are that the boom will steadily deflate over the next year.

US PMI/ISM rebounds a little.

 But only a little.  However, the average of the PMI and ISM  is still higher than at the peak of previous growth accelerations over the last 10 years.  As always, the green line is the one to watch.

2 centuries of progress, but ...

 ... still a long way to go.

From  Our World in Data  (read the whole article --- it's fascinating)

The final chart summarizes the global history of poverty. It focuses on the last two centuries when humanity left the stagnation of the past behind and achieved growth for the first time. 

The world made good progress – in the last decade the share that lives on less than $10 per day has declined by 10 percentage points – but the chart also shows that much progress is still needed. 62% live on less than $10 per day and 85% live on less than $30. 

The global data makes clear why the world needs much more growth to end poverty. The world as a whole today is in a situation not so different from Sweden a century ago. The majority of the world left extreme poverty behind, but is still far poorer than $30 a day. 

Even after two centuries of the global fight against poverty we are still in the early stages. The history of global poverty reduction has only just begun.

UK exports underperforming world exports

 From the Financial Times.  Brexit has not been good for the UK economy.

US PMI/ISM stable in November

 The usual preamble applies, about variability and estimates:

Most economic time series, in all countries, are based on sample surveys.  A group of respondents is asked  questions about the state of their business.  Because it would be prohibitively expensive to ask everybody, only a small percentage of the total is asked what is happening or what happened over the time period.  The statisticians then estimate what their small sample of actors in a sector means for the whole sector.  This introduces random errors into the data.  In addition, just like waves and ripples on the sea, there are random fluctuations in the actual economy, not just in our measurement of it. 

There are two ways to get round these issues.  The first is to 'extreme-adjust' an individual time series.  This technique measures the random error of each individual observation of the time series by comparing it with a smoothed trend (usually some version of a Henderson curve) and if an individual error term of an observation is more than 2.5 standard deviations away from the average of over, say, the last five years, that observation of the time series is replaced with the value of the moving average.  This technique removes "spikes" in the data caused by bad weather, strikes, or simple mismeasurement.

The other way is to use different surveys.  For example, retail sales data come from surveys of shops (online and brick and mortar).  Industrial production comes from surveys of factories.  If you take an average of these two time series drawn from completely different samples, you reduce the random error, and get a clearer picture of what is happening in the economy.

There are two national opinion surveys in the United States, as well as several regional surveys.  The two national opinion surveys are produced by different bodies, using different samples.  The oldest is the ISM survey, produced by the Institute of Supply Management (previously the 'National Association of Purchasing Managers', or NAPM.)  Initially the survey just covered manufacturing, but about 20 years ago, the service sector was added.  The other is produced by IHS Markit, and is called the PMI, or Purchasing Managers Index. 

Source: Mixed signals from the US

(Also, when the time series isn't seasonally adjusted, I do my own adjustment.  I do my own extreme adjustment too, both using programs I wrote.)

The signals aren't that mixed this time, but still there were slight differences in the November data―the ISM  went up a little, the PMI down.  Conclusion: no change from October, though the longer-term trend is gently down.

US growth remains strong, but slips a little

 The US manufacturing ISM and PMI surveys slipped again in October.  As ever, to get a better idea of the underlying trend, I have averaged the extreme-adjusted version of each time series.  So the green line is the one to watch.

The whole-economy version of this chart, i.e. a 50/50 average of the extreme-adjusted PMI and ISM surveys for manufacturing and services, showed a slight uptick in the latest month:

But if we look at the whole-economy ISM survey, which goes back much further than the PMI  survey, the economy is as strong as it's been in 35 years, which, given the deep covid crash recession, plus the huge monetary and fiscal stimulus,  is not in the least surprising.  I expect growth to slow gradually, as the rebound effect and fiscal stimulus ease, but it will remain strong until the Fed starts to raise rates or until a new deadlier variant of covid emerges.

Chinese emissions surge past pre-covid levels

From Carbon Brief.

China’s CO2 emissions have surged back from the coronavirus lockdown, rising by 4-5% year-on-year in May, analysis of new government data shows.

Emissions fell an estimated 25% in the six weeks following the lockdown, from early February to mid-March, before bottoming out, as factories and power plants reduced output. Road and air traffic also fell dramatically. 

But the latest data shows the rebound in emissions has been rapid, as evidenced by the return of air pollution to pre-crisis levels.

[Read the rest here]

Germany: growth as well as de-carbonisation

From a nice graph pack by Clean Energy Wire:

The German economy has grown even as emissions have fallen.
If they can do it, we can too.

Renewables started off slowly (they were very expensive), but growth in recent years has been rapid

10 years ago, renewables were under 20%, 20 years ago under 10%. 50% by 2022?  70% by 2030?

Some countries (e.g, Norway) have high renewables penetration because of hydro.  To some extent, Denmark and Sweden rely on imports from Norway.

Mixed signals from the US

Most economic time series, in all countries, are based on sample surveys.  A group of respondents is asked  questions about the state of their business.  Because it would be prohibitively expensive to ask everybody, only a small percentage of the total is asked what is happening or what happened over the time period.  The statisticians then estimate what their small sample of actors in a sector means for the whole sector.  This introduces random errors into the data.  In addition, just like waves and ripples on the sea, there are random fluctuations in the actual economy, not just in our measurement of it. 

There are two ways to get round these issues.  The first is to 'extreme-adjust' an individual time series.  This technique measures the random error of each individual observation of the time series by comparing it with a smoothed trend (usually some version of a Henderson curve) and if an individual error term of an observation is more than 2.5 standard deviations away from the average of over, say, the last five years, that observation of the time series is replaced with the value of the moving average.  This technique removes "spikes" in the data caused by bad weather, strikes, or simple mismeasurement.

The other way is to use different surveys.  For example, retail sales data come from surveys of shops (online and brick and mortar).  Industrial production comes from surveys of factories.  If you take an average of these two time series drawn from completely different samples, you reduce the random error, and get a clearer picture of what is happening in the economy.

There are two national opinion surveys in the United States, as well as several regional surveys.  The two national opinion surveys are produced by different bodies, using different samples.  The oldest is the ISM survey, produced by the Institute of Supply Management (previously the 'National Association of Purchasing Managers', or NAPM.)  Initially the survey just covered manufacturing, but about 20 years ago, the service sector was added.  The other is produced by IHS Markit, and is called the PMI, or Purchasing Managers Index. 

Right now these surveys are showing different things.  Here is the ISM manufacturing survey, with the official data and my calculation of the extreme-adjusted data:

As you can see, this indicator is still falling.  The ISM survey of services is however rising.  And this is very unusual.  Normally, because manufacturing is much more cyclical than services, it is manufacturing (and construction) that tend to drive the business cycle, with the result that upturns and downturns in services lag behind similar shifts in manufacturing.  You can see that in the chart below:

The other survey I look at, the PMI, is much stronger.  Is shows a renewed upturn.

And the average of the manufacturing and services PMIs is also rising.

Should we go with the ISM manufacturing survey?  It is the longest, with data going back, I believe, to 1937.    For the data I have available, the ISM manufacturing has called all major economic cycles and many minor ones too.  On the other hand, the PMI data are additional information, helping reduce random fluctuations when we add them to the ISM data.  Below I show the manufacturing surveys for both series, extreme adjusted, and their average, and also the whole economy series.  The balance of probabilities is that the US recovery is advancing.  I'll do some deeper analysis over the next few days.

Viking economics

Scandinavia provides an alternative vision of economics and democracy to the kind of red-in-tooth-and-claw version that the USA practices, and which neo-liberals and economists have tried to make the standard ideology around the world.  Though policies differ in detail from country to country within Scandinavia, the general picture is one of high taxes, comprehensive welfare states, low inequality, low crime, low unemployment, free education and free health, and according to surveys, some of the happiest people in the developed world.  Despite all these things that the neo-liberal right deeply despises, somehow they also manage to have reasonable per capita growth (for developed countries—developing countries tend to have higher growth).

From the Sydney Morning Herald:

I’d like to tell you I’ve been away working hard on a study tour of the Nordic economies – or perhaps tracing the remnant economic impact of the Hanseatic League (look it up) – but the truth is we were too busy enjoying the sights around Scandinavia and the Baltic for me to spend much time reading the books and papers I’d taken along.

But since I always like telling people what I did on my holidays (oh, those fjords and waterfalls we saw while sailing up the coast of Norway to the Arctic Circle!), I’ve been looking up facts and figures in a forthcoming book comparing the main developed countries on many criteria, by my mate Professor Rod Tiffen and others at Sydney University (including me).

But first, the travelogue. Prosperous countries have a lot in common but Scandinavia is different. I have seen the future and, while some might regard it as political correctness gone mad, it looked pretty good to me.

One aspect in which the Nordics (strictly speaking, Finland isn’t Scandinavian because it’s a republic rather than a monarchy and because the Finnish language bears no relation to Danish, Swedish or Norwegian) are way more advanced is the role of women.

All of them have had female prime ministers or presidents, they have loads of female politicians and we were always seeing women out at business functions with their male colleagues.

Governments spend much more on childcare and they’re big on men actually taking paid paternity leave. They have “family zones” in trains and we were struck by how many men we saw by themselves pushing prams.

They’re much more relaxed on sexual matters. These days, any new building in Sweden will have unisex toilets, with rows of cubicles and not a urinal to be seen. Neat way of sidestepping debates about which toilet transgender people should use.

The Nordics are well ahead of us on environmental matters. They’re bicycle crazy (a big health hazard for tourists who don’t know they’re standing in a bike lane) and drive small cars.

They’re obsessed with organic food and even hotel guests are expected to recycle their paper and plastic. One hotel we stayed at in Copenhagen was so concerned to save the planet its policy was to make up the rooms only every fourth day.

The Norwegians have made and, unlike the rest of us, saved their pile by selling oil to the world but you get the feeling it troubles their conscience. So, like the other Nordics, they have ambitious targets to move to renewables and, to that end, are making more use of carbon pricing than most other countries.

The truth is, I’ve long wanted to see Scandinavia for myself. It’s a part of the world that most politicians and economists prefer not to think about. Why not? Because its performance laughs at all they believe about how to run a successful economy.

Everyone in the English-speaking economies knows big government is the enemy of efficiency. The less governments do, the better things go. The lower we can get our taxes, the more we’ll grow.

Just ask Scott Morrison. As he loves to say, no one ever taxed their way to prosperity. What’s he doing to encourage jobs and growth? Cutting taxes, of course. That’s Economics 101 – so obvious it doesn’t need explaining.

Trouble is, the Nordics have some of the highest rates of government spending in the world and pay among the highest levels of taxation but have hugely successful economies.

The Danes pay 46 per cent of gross domestic product in total taxes, the Finns pay 44 per cent, the Swedes 43 per cent and the Norwegians 38 per cent (compared with our 28 per cent).

Measured by GDP per person, Norway's standard of living is well ahead of America's. Then come the Danes and the Swedes – at around the average for 18 developed democracies (as are we) – with the Finns just beating out the Brits and the French further down the list.

The Nordics are also good at managing their government budgets.

We all know unions are bad for jobs and growth and we’ve succeeded in getting our rate of union membership down to 17 per cent. Funny that, the Nordics still have the highest rates (up around two-thirds), so, do they have lots of strikes? No.

The four Nordics are right at the top when it comes to the smallest gap between rich and poor, with Canada, Australia, Britain and the United States right at the bottom.

Other indicators show that (provided you ignore the long snowy winters) the Nordics enjoy a high quality of life and not just a high material standard of living.

Note this, I’m not claiming that the Scandinavians are more economically successful because of their big government and high taxes. No, I’m saying that, contrary to the unshakable beliefs of many economists and all conservative politicians, there’s little connection between economic success and the size of government.

So how do the Scandis do it? I read this on the wall of an art museum in Aarhus, Denmark: “In a society we are mutually interdependent. Strengthening the spirit of community, we improve society for all of us as a group but we also provide each individual with better opportunities for realising his or her own potential.”

Source
Note: US population growth rates are higher than Scandinavian

Source

So deeply are the neo-liberal tenets held in Anglophone countries that no matter how much evidence is produced showing that the Scandinavian model works, I doubt that we will ever move towards their system.  Sad.