What makes a Nation Happy? 7 Learnings from Scandinavia...

Ah... the elusive but eternal pursuit of happiness! The 'self-evident', 'unalienable right' of all humanity! So then, mirror, mirror on the wall, who is the happiest of them all?

It turns out that Finland, Denmark and Norway have consistently ranked Top 3 Happiest countries in UN surveys. Sweden and Iceland (which together make up the 5 Nordic countries) have also consistently been in Top 10. Impressed and awed, and on a family vacation there this month, we asked many of our hosts what makes them tick. 

1.    There is Wealth Creation of course, with these countries enjoying one of the highest GDP/capita in the world. We know wealth correlates with a sense of well-being, taking us higher on Maslow's hierarchy. But money is often not the full story - for others in Top 25 are not as happy. Beyond a threshold wealth ($75000 per year?), the link between incremental wealth and happiness is tenuous at best. Higher salary may still add to a sense of achievement in life and perceived power to get things done, but not to happiness. [In the last decade, US real GDP/capita increased 20% but its happiness ranking slid from #3 to #19, stated reason being “declining social support”and “increased corruption”]

2.    So, beyond wealth, what gives happiness? The most common reason given by locals: Life is Secure. Nordic countries follow the model of compassionate capitalism... free markets interspersed with welfare thinking: Free school and even free university education, free healthcare, generous old age pension, generous unemployment allowance etc.; most of the usual stresses in life are taken care of by the state. There is a feeling that if you fall, the state will pick you up. This goes alongside capital market economics and private enterprise.

3.    And there is Equality. Gini index of inequality is under 30, one of the lowest in the world. Taxes are high (51% at high marginal rates) but many of my hosts mentioned that by paying high taxes they feel they are investing in their country. [For those who disdain at centralized planning, Scandinavia has consistently scored in the Top 10/Top 20 in Innovation, Healthcare, Per Capita patents etc., with the obvious caveat that these are small countries with limited population].

4.    This may require a fundamental paradigm: Society is Clean. Corruption, Crime, Pollution are literally non -existent, with one of the lowest rates in the world. Infrastructure is excellent - great roads, bridges, electricity, metros etc. Most people trust the state and political leaders (top 10 in Trust rankings) knowing their money is being put to good use.

5.    Beyond the hard factors, one intriguing ‘emotional’ feature is the Danish concept of Hygges (pronounced hyoo-ga). Loosely translated, it means Cosyness or giving yourself the little indulgences. Work hours typically end 3.30-4 pm, leaving evenings free to relax: a wine with a book, a family/friends dinner, music or theatre. A 5 week annual vacation is compulsory. Pregnancy leaves at 9 months plus paternal leave of 3 months (society believes it is critical for parents to spend time with kids). 

6.    Happiness is also an Attitude and not just circumstantial. In the frigid cold winds near the Arctic circle, the locals say there is no bad weather, only bad clothes. At 0 degree C, people were  jogging, walking and cycling (latter being like the national transport, with 2 exclusive lanes). Very well-to-do fathers would pedal a personal rickshaw while the wife and kid sit in front! As an outdoor country, general health is excellent with one of the highest health indexes per UNDP. [There is some evidence that the well-being of Scandinavians is higher even in other countries where they have emigrated like US with the cohort significantly richer than average Americans even though the ones who migrated to US were anything but elite - so attitude does matter]

7.    There is perhaps also a strong correlation with Individual Freedom. Read about the Freetown of Christiania and its famous Pushers street (open sale of weed) but in a largely empowering and responsible environment. The 1000 residents self-govern their commune through consensus and minimal interference by government. Overall, the democracy and democratic institutions are very well developed.

So, while they may have their own set of problems (given their consistent high ranking, a lot of nay-saying articles also on the web), Nordic countries at least teach us what it may take to make a country happy: Wealth creation, social security and health, egalitarian thinking, clean systems, emotional bonds, individual freedom and the right attitude. Much like Tolstoy’s famous quote, “each happy family is alike”, they may have found the perfect medley. It is not any one thing, it is a rainbow.

As I reflected on all this, there was also the sad realization of all that we still have to accomplish in my dear country India (ranked #140 out of 156 countries on the same happiness survey). Obviously, it will be naive to compare the small, homogeneous Nordic countries with the size and complexity of India. But it is still difficult to condone at least some of our self-afflicted challenges (our scores have slid further down from #117 rank in 2015; extremely long work hours make balance difficult; corruption, pollution, lack of cleanliness; failing government systems and infrastructure; massive inequality). The scores are based on Indian respondents' own feedback, so we can’t blame anyone outside. Thoughts welcome. After all, Gandhi reminded us, we have to be the change we wish to see in the world.

Meanwhile, I am reading the bestseller: The Little Book Of Hygge, The Danish Way To Live Well... Yes, with a wine in my hand! On a personal note, in our little way, my family and I are trying to bring this elusive balance in our own lives: this vacation marked the 50th country we have travelled to :)

[The views expressed in the article are personal].

PS1: Some readers asked if Nordic model would have been so successful without their natural resources. I don't agree. Their dependence on natural resources is just around OECD average, with the exception of Norway (oil). Sweden has some iron, Finland wood but Denmark hardly has any natural resources. - and all these countries were at the bottom of poverty in Europe just a hundred years ago. More importantly, the way Norway has managed to steward its oil wealth is a shining example of visionary thinking (all assets carved out as a pension fund dedicated to its citizens which government cannot use day to day, and which can, at some future point, give $200,000 to each citizen!). Also read about the Paradox of Plenty: countries with an abundance of natural resources (sad case of Africa?) unfortunately, in real life, tend to have less economic growth, less democracy and worse development outcomes.

PS2: On a lighter note, some readers asked to explain Tolstoy's famous quote ("each happy family is alike, each unhappy family is unhappy in its own way"). What he meant was that so many factors go into making a family truly happy: love, health, prosperity, relation with in-laws, sexual compatibility, time for each other, children, social support... the absence of any one - even if others are present - can derail the family's happiness (e.g. wealth but not health). Only if the entire rainbow is on track can a family be truly happy. Similarly, I suspect, a country needs most of the 7 things above to be sustainably happy.