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Lettura e ascolto intermediate in inglese: The Nordic model of Equality

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This article is republished from The Conversation under a Creative Commons licence

by
Geoffrey M Hodgson, University of Hertfordshire

Rising inequality is one of the biggest social and economic issues of our time. It is linked to poorer economic growth and fosters social discontent and unrest. So, given that the five Nordic countries – Denmark, Finland, Iceland, Norway and Sweden – are some of the world’s most equal on a number of measures, it makes sense to look to them for lessons in how to build a more equal society.

The Nordic countries are all social-democratic countries with mixed economies. They are not socialist in the classical sense – they are driven by financial markets rather than by central plans, although the state does play a strategic role in the economy. They have systems of law that protect personal and corporate property and help to enforce contracts. They are democracies with checks, balances and countervailing powers.

Nordic countries show that major egalitarian reforms and substantial welfare states are possible within prosperous capitalist countries that are highly engaged in global markets. But their success undermines the view that the most ideal capitalist economy is one where markets are unrestrained. They also suggest that humane and equal outcomes are possible within capitalism, while full-blooded socialism has always, in practice, led to disaster.

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Lettura e ascolto intermediate in inglese: How multinationals avoid tax

This article is republished from The Conversation under a Creative Commons licence

by
Miroslav Palanský, Charles University

Tax havens have become a defining feature of the global financial system. Multinational companies can use various schemes to avoid paying taxes in countries where they make vast revenues. In new research, my colleague Petr Janský and I estimate that around US$420 billion in corporate profits is shifted out of 79 countries every year.

This equates to about US$125 billion in lost tax revenue for these countries. As a result, their state services are either underfunded or must be funded by other, often lower-income taxpayers. It contributes to rising inequality both within countries and across the world.

Given the nature of the issue, it is intrinsically difficult to detect tax avoidance or evasion. To get round this, we use data on foreign direct investment (FDI) collected by the International Monetary Fund to examine whether companies owned from tax havens report lower profits in high-tax countries compared to other companies.

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