Nordic model

From Wikipedia, the free encyclopedia

The Nordic model refers to the economic and social policies common to the Nordic countries (Denmark, Finland, Norway, Iceland, Greenland, the Faroe Islands, and Sweden). This includes a comprehensive welfare state and collective bargaining at the national level with a high percentage of the workforce unionized while being based on the economic foundations of free market capitalism. The Nordic model began to earn attention after World War II.

 

The Scandinavian countries were all monarchies, with Finland and Iceland becoming republics in the 20th century. Currently, the Nordic countries have been described as being highly democratic. Although there are significant differences among the Nordic countries, they all share some common traits. These include support for a universalist welfare state aimed specifically at enhancing individual autonomy and promoting social mobility; a corporatist system involving a tripartite arrangement where representatives of labor and employers negotiate wages and labor market policy mediated by the government; and a commitment to private ownership (with some caveats), a mixed economy, and free trade.

Each of the Nordic countries has its own economic and social models, sometimes with large differences from its neighbours. As of 2018, all of the Nordic countries rank highly on the Inequality-adjusted HDI and the Global Peace Index.

Overview

Flags of the Nordic countries from left to right: Finland, Iceland, Norway, Sweden and Denmark

 

"The Nordic Model – Embracing globalization and sharing risks" characterises the system as follows:

• An elaborate social safety net, in addition to public services such as free education and universal healthcare in a largely tax-funded system.
• Strong property rights, contract enforcement and overall ease of doing business.
• Public pension plans.
• Free trade combined with collective risk sharing (social programs, labour market institutions) which has provided a form of protection against the risks associated with economic openness.
• Little product market regulation. Nordic countries rank very high in product market freedom according to OECD rankings.
• Low levels of corruption. In Transparency International's 2015 Corruption Perceptions Index, Denmark, Finland, Sweden and Norway were ranked among the top 10 least corrupt of the 167 countries evaluated.
• High percentage of workers belonging to a labour union. In 2013, labour union density was 88% in Iceland, 69% in Denmark, 67% in Sweden, 66% in Finland and 51% in Norway. In comparison, labour union density was 18% in Germany, 11% in the United States and 8% in France. The lower union density in Norway is mainly explained by the absence of a Ghent system since 1938. In contrast, Denmark, Finland and Sweden all have union-run unemployment funds.
• A partnership between employers, trade unions and the government, whereby these social partners negotiate the terms to regulating the workplace among themselves, rather than the terms being imposed by law. Sweden has decentralised wage co-ordination while Finland is ranked the least flexible. The changing economic conditions have given rise to fear among workers as well as resistance by trade unions in regards to reforms. At the same time, reforms and favourable economic development seem to have reduced unemployment, which has traditionally been higher. Denmark's Social Democrats managed to push through reforms in 1994 and 1996.
• The United Nations World Happiness Reports show that the happiest nations are concentrated in Northern Europe. The Nordics ranked highest on the metrics of real GDP per capita, healthy life expectancy, having someone to count on, perceived freedom to make life choices, generosity and freedom from corruption. The Nordic countries place in the top 10 of the World Happiness Report 2018, with Finland and Norway taking the top spots.
• The Nordic countries received the highest ranking for protecting workers rights on the International Trade Union Confederation's 2014 Global Rights Index, with Denmark being the only nation to receive a perfect score.
• Sweden at 56.6% of GDP, Denmark at 51.7% and Finland at 48.6% reflect very high public spending. One key reason for public spending is the large number of public employees. These employees work in various fields including education, healthcare and for the government itself. They often have greater job security and make up around a third of the workforce (more than 38% in Denmark). Public spending in social transfers such as unemployment benefits and early-retirement programmes is high. In 2001, the wage-based unemployment benefits were around 90% of wage in Denmark and 80% in Sweden, compared to 75% in the Netherlands and 60% in Germany. The unemployed were also able to receive benefits several years before reductions, compared to quick benefit reduction in other countries.
• Public expenditure for health and education is significantly higher in Denmark, Sweden, and Norway in comparison to the OECD average.
• Overall tax burdens (as a percentage of GDP) are high: Sweden (44.1%), Denmark (45.9%) and Finland (44.1%). The Nordic countries have relatively flat tax rates, meaning that even those with medium and low incomes are taxed at relatively high levels.

Aspects

Labor market policy

The Nordic countries share active labor market policies as part of a corporatist economic model intended to reduce conflict between labor and the interests of capital. The corporatist system is most extensive in Sweden and Norway, where employer federations and labor representatives bargain at the national level mediated by the government. Labor market interventions are aimed at providing job retraining and relocation.

The Nordic labor market is flexible, with laws making it easy for employers to hire and shed workers or introduce labor-saving technology. To mitigate the negative effect on workers, the government labor market policies are designed to provide generous social welfare, job retraining and relocation to limit any conflicts between capital and labor that might arise from this process.

Economic system

The Nordic model is underpinned by a free market capitalist economic system that features high degrees of private ownership with the exception of Norway, which includes a large number of state-owned enterprises and state ownership in publicly listed firms.

The Nordic model is described as a system of competitive capitalism combined with a large percentage of the population employed by the public sector (roughly 30% of the work force). In 2013, The Economist described its countries as "stout free-traders who resist the temptation to intervene even to protect iconic companies" while also looking for ways to temper capitalism's harsher effects, and declared that the Nordic countries "are probably the best-governed in the world". Some economists have referred to the Nordic economic model as a form of "cuddly" capitalism, with low levels of inequality, generous welfare states and reduced concentration of top incomes and contrast it with the more "cut-throat" capitalism of the United States, which has high levels of inequality and a larger concentration of top incomes.

Beginning in the 1990s, the Swedish economy pursued neoliberal reforms that reduced the role of the public sector, leading to the fastest growth in inequality of any OECD economy. However, Sweden's income inequality still remains lower than most other countries.

Norway's particularities

The state of Norway has ownership stakes in many of the country's largest publicly listed companies, owning 37% of the Oslo stockmarket and operating the country's largest non-listed companies including Equinor and Statkraft. The Economist reports that "after the second world war the government nationalised all German business interests in Norway and ended up owning 44% of Norsk Hydro's shares. The formula of controlling business through shares rather than regulation seemed to work well, so the government used it wherever possible. 'We invented the Chinese way of doing things before the Chinese', says Torger Reve of the Norwegian Business School".

The government also operates a sovereign wealth fund, the Government Pension Fund of Norway—whose partial objective is to prepare Norway for a post-oil future, but "unusually among oil-producing nations, it is also a big advocate of human rights—and a powerful one, thanks to its control of the Nobel peace prize".

Norway is the only major economy in the West where younger generations are getting richer, with a 13% increase in disposable income for 2018, bucking the trend seen in other Western nations of Millennials becoming poorer than the generations which came before.

Nordic welfare model

The Nordic welfare model refers to the welfare policies of the Nordic countries, which also tie into their labor market policies. The Nordic model of welfare is distinguished from other types of welfare states by its emphasis on maximizing labor force participation, promoting gender equality, egalitarian and extensive benefit levels, the large magnitude of income redistribution and liberal use of expansionary fiscal policy.

While there are differences among the Nordic countries, they all share a broad commitment to social cohesion, a universal nature of welfare provision in order to safeguard individualism by providing protection for vulnerable individuals and groups in society and maximizing public participation in social decision-making. It is characterized by flexibility and openness to innovation in the provision of welfare. The Nordic welfare systems are mainly funded through taxation.

Despite the common values, the Nordic countries take different approaches to the practical administration of the welfare state. Denmark features a high degree of private sector provision of public services and welfare, alongside an assimilation immigration policy. Iceland's welfare model is based on a "welfare-to-work" model while part of Finland's welfare state includes the voluntary sector playing a significant role in providing care for the elderly. Norway relies most extensively on public provision of welfare.

Poverty reduction

The Nordic model has been successful at significantly reducing poverty. In 2011, poverty rates before taking into account the effects of taxes and transfers stood at 24.7% in Denmark, 31.9% in Finland, 21.6% in Iceland, 25.6% in Norway and 26.5% in Sweden. After accounting for taxes and transfers, the poverty rates for the same year became 6%, 7.5%, 5.7%, 7.7% and 9.7% respectively, for an average reduction of 18.7 p.p. Compared to the United States, which has a poverty level pre-tax of 28.3% and post-tax of 17.4% for a reduction of 10.9 p.p., the effects of tax and transfers on poverty in all the Nordic countries are substantially bigger. However, in comparison to France (27 p.p. reduction) and Germany (24.2 p.p. reduction) the taxes and transfers in the Nordic countries are smaller on average.

Religion as a factor

Scandinavian countries have Lutheranism as their main religion. Schroder argues that Lutheranism promotes the idea of a nationwide community of believers and it promotes state involvement in economic and social life. This allows nationwide welfare solidarity and economic coordination. Currently, a large number of Scandinavians have been described as being irreligious.

Reception

The Nordic model has been positively received by some American politicians and political commentators. Jerry Mander has likened the Nordic model to a kind of "hybrid" system which features a blend of capitalist economics with socialist values, representing an alternative to American-style capitalism. Senator Bernie Sanders (I-VT) has pointed to Scandinavia and the Nordic model as something the United States can learn from, in particular with respect to the benefits and social protections the Nordic model affords workers and its provision of universal healthcare. According to Naomi Klein, former Soviet leader Mikhail Gorbachev sought to move the Soviet Union in a similar direction to the Nordic system, combining free markets with a social safety net, but still retaining public ownership of key sectors of the economy—ingredients that he believed would transform the Soviet Union into "a socialist beacon for all mankind".

The Nordic model has also been positively received by various social scientists and economists. American professor of sociology and political science Lane Kenworthy advocates for the United States to make a gradual transition toward a social democracy similar to those of the Nordic countries, defining social democracy as such: "The idea behind social democracy was to make capitalism better. There is disagreement about how exactly to do that, and others might think the proposals in my book aren't true social democracy. But I think of it as a commitment to use government to make life better for people in a capitalist economy. To a large extent, that consists of using public insurance programs—government transfers and services". Nobel Prize-winning economist Joseph Stiglitz has noted that there is higher social mobility in the Scandinavian countries than in the United States and argues that Scandinavia is now the land of opportunity that the United States once was. American author Ann Jones, who lived in Norway for four years, contends that "the Nordic countries give their populations freedom from the market by using capitalism as a tool to benefit everyone" whereas in the United States "neoliberal politics puts the foxes in charge of the henhouse, and capitalists have used the wealth generated by their enterprises (as well as financial and political manipulations) to capture the state and pluck the chickens".

Economist Jeffrey Sachs is a proponent of the Nordic model, having pointed out that the Nordic model is "the proof that modern capitalism can be combined with decency, fairness, trust, honesty, and environmental sustainability".

The Nordic combination of extensive public provision of welfare and a culture of individualism has been described by Lars Trägårdh of Ersta Sköndal University College as "statist individualism".

A 2016 survey by the think tank Israel Democracy Institute found that nearly 60 percent of Israeli Jews preferred a "Scandinavian model" economy, with high taxes and a robust welfare state.

Misconceptions

George Lakey, author of Viking Economics, asserts that Americans generally misunderstand the nature of the Nordic "welfare state":

Americans imagine that "welfare state" means the U.S. welfare system on steroids. Actually, the Nordics scrapped their American-style welfare system at least 60 years ago, and substituted universal services, which means everyone—rich and poor—gets free higher education, free medical services, free eldercare, etc. 

In his role as economic adviser to Poland and Yugoslavia in their post-socialist transitional period, Jeffrey Sachs noted that the specific forms of Western-style capitalism such as Swedish-style social democracy and Thatcherite liberalism are virtually identical:

The eastern countries must reject any lingering ideas about a “third way”, such as a chimerical “market socialism” based on public ownership or worker self-management, and go straight for a western-style market economy...The main debate in economic reform should therefore be about the means of transition, not the ends. Eastern Europe will still argue over the ends: for example, whether to aim for Swedish-style social democracy or Thatcherite liberalism. But that can wait. Sweden and Britain alike have nearly complete private ownership, private financial markets and active labour markets. Eastern Europe today [in 1990] has none of these institutions; for it, the alternative models of Western Europe are almost identical.

In a speech at Harvard's Kennedy School of Government, Danish Prime Minister Lars Løkke Rasmussen addressed the American misconception that the Nordic model is a form of socialism: "I know that some people in the US associate the Nordic model with some sort of socialism. Therefore, I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy".

Criticism

Socialist economists John Roemer and Pranab Bardhan criticize Nordic-style social democracy for its questionable effectiveness in promoting relative egalitarianism as well as its sustainability. They point out that Nordic social democracy requires a strong labor movement to sustain the heavy redistribution required, arguing that it is idealistic to think similar levels of redistribution can be accomplished in countries with weaker labor movements. They note that even in the Scandinavian countries social democracy has been in decline since the weakening of the labor movement in the early 1990s, arguing that the sustainability of social democracy is limited. Roemer and Bardham argue that establishing a market socialist economy by changing enterprise ownership would be more effective than social democratic redistribution at promoting egalitarian outcomes, particularly in countries with weak labor movements.

Historian Guðmundur Jónsson argues that it would be inaccurate to include Iceland in one aspect of the Nordic model, that of consensus democracy. He writes that "Icelandic democracy is better described as more adversarial than consensual in style and practice. The labour market was rife with conflict and strikes more frequent than in Europe, resulting in strained government–trade union relationship. Secondly, Iceland did not share the Nordic tradition of power-sharing or corporatism as regards labour market policies or macro-economic policy management, primarily because of the weakness of Social Democrats and the Left in general. Thirdly, the legislative process did not show a strong tendency towards consensus-building between government and opposition with regard to government seeking consultation or support for key legislation. Fourthly, the political style in legislative procedures and public debate in general tended to be adversarial rather than consensual in nature".

In their paper "The Scandinavian Fantasy: The Sources of Intergeneration Mobility in Denmark and the U.S.", Rasmus Landersøn and James J. Heckman compared American and Danish social mobility and found that social mobility is not as high as figures might suggest in the Nordic countries. When looking exclusively at wages (before taxes and transfers), Danish and American social mobility are very similar. It is only after taxes and transfers are taken into account that Danish social mobility improves, indicating that Danish economic redistribution policies simply give the impression of greater mobility. Additionally, Denmark's greater investment in public education did not improve educational mobility significantly, meaning children of non-college educated parents are still unlikely to receive college education, though this public investment did result in improved cognitive skills amongst poor Danish children compared to their American peers. The researchers also found evidence that generous welfare policies could discourage the pursuit of higher-level education due to decreasing the economic benefits that college education level jobs offer and increasing welfare for workers of a lower education level.

Nima Sanandaji, a libertarian, has also criticized the Nordic model, questioning the link between the model and socio-economic outcomes in works of his such as Scandinavian Unexceptionalism and Debunking Utopia: Exposing the Myth of Nordic Socialism.

Political ideologies in the Nordic countries

According to sociologist Lane Kenworthy, in the context of the Nordic model "social democracy" the ideology of the Nordic labour parties refers to a set of policies for promoting economic security and opportunity within the framework of capitalism rather than a replacement for capitalism.

Post-industrial society

From Wikipedia, the free encyclopedia

Clark's Sector model for US economy 1850–2009

In sociology, the post-industrial society is the stage of society's development when the service sector generates more wealth than the manufacturing sector of the economy. 

The term was originated by Alain Touraine and is closely related to similar sociological theoretical constructs such as post-Fordism, information society, knowledge economy, post-industrial economy, liquid modernity, and network society. They all can be used in economics or social science disciplines as a general theoretical backdrop in research design.

As the term has been used, a few common themes, including the ones below have begun to emerge.

1. The economy undergoes a transition from the production of goods to the provision of services.
2. Knowledge becomes a valued form of capital; see Human capital.
3. Producing ideas is the main way to grow the economy.
4. Through processes of globalization and automation, the value and importance to the economy of blue-collar, unionized work, including manual labor (e.g., assembly-line work) decline, and those of professional workers (e.g., scientists, creative-industry professionals, and IT professionals) grow in value and prevalence.
5. Behavioral and information sciences and technologies are developed and implemented. (e.g., behavioral economics, information architecture, cybernetics, game theory and information theory.)

Origins

Daniel Bell popularized the term through his 1974 work The Coming of Post-Industrial Society. Although some have credited Bell with coining the term, French sociologist Alain Touraine published in 1969 the first major work on the post-industrial society. The term was also used extensively by social philosopher Ivan Illich in his 1973 paper Tools for Conviviality and appears occasionally in Leftist texts throughout the mid-to-late 1960s.

The term has grown and changed as it became mainstream. The term is now used by admen such as Seth Godin, public policy PhDs such as Keith Boeckelman, and sociologists such as Neil Fligstein and Ofer Sharone. Former U.S. President Bill Clinton even used the term to describe Chinese growth in a round-table discussion in Shanghai in 1998.

Valuation of knowledge

The post-industrialized society is marked by an increased valuation of knowledge. This itself is unsurprising, having been foreshadowed in Daniel Bell's presumption as to how economic employment patterns will evolve in such societies. He asserts employment will grow faster in the tertiary (and quaternary) sector relative to employment in the primary and secondary sector and that the tertiary (and quaternary) sectors will take precedence in the economy. This will continue to occur such that the“impact of the expert”will expand and power will be monopolized by knowledge.

As tertiary and quaternary sector positions are essentially knowledge-oriented, this will result in a restructuring of education, at least in its nuances. The“new power… of the expert”consequently gives rise to the growing role of universities and research institutes in post-industrial societies. Post-industrial societies themselves become oriented around these places of knowledge production and production of experts as their new foci. Consequently, the greatest beneficiaries in the post-industrial society are young urban professionals. As a new, educated, and politicized generation more impassioned by liberalism, social justice, and environmentalism the shift of power into their hands, as a result of their knowledge endowments, is often cited as a good thing.

The increasing importance of knowledge in post-industrial societies results in a general increase in expertise through the economy and throughout society. In this manner, it eliminates what Alan Banks and Jim Foster identify as “undesirable work as well as the grosser forms of poverty and inequality.” This effect is supplemented by the aforementioned movement of power into the hands of young educated people concerned with social justice.

Economists at Berkeley have studied the value of knowledge as a form of capital, adding value to material capital, such as a factory or a truck. Speaking along the same lines of their argument, the addition or 'production' of knowledge, could become the basis of what would undoubtedly be considered 'post-industrial' policies meant to deliver economic growth.

Creativity culture

Similarly, post-industrial society has serviced the creative culture. Many of those most well-equipped to thrive in an increasingly technological society are young adults with tertiary education. As education itself becomes more and more oriented towards producing people capable of answering the need for self-actualization, creativity, and self-expression, successive generations become more endowed with the ability to contribute to and perpetuate such industries. This nuanced change in education, as well among the emerging class of young professionals, is itself initiated by what James D Wright identifies as an “unprecedented economic affluence and the satiation of basic material needs.” Ellen Dunham-Jones as well observes this feature of post-industrial society where “abundant goods [are] equitably distributed [in order that] laborless leisure and self-determination” can be consumed.

The post-industrial society is repeatedly stressed to be one where knowledge is power and technology is the instrument. Naturally, where one is creatively inclined, they are advantaged by such a society. The doctrine of “speed, mobility, and malleability” is well suited to a dynamic creative industry and as industries of good production decrease in precedence, the way is paved for artists, musicians, and other such types, whose skills are better utilized by the tertiary and quaternary sector. Urban geographer Trevor Barnes, in his work outlining the Vancouver experience in post-war development, evokes the post-industrial condition, citing the emergence and consolidation of a significant video games industry as a constituent of the elite service sector.

This increased faculty of the post-industrialist society with respects to the creative industry is itself reflected by the economic history of post-industrial societies. As economic activities shift from primarily primary and secondary sector-based to tertiary, and later quaternary, sector-based, cities in which this shift occurs become more open to exchanges of information. This is necessitated by the demands of a tertiary and quaternary sector: in order to better service an industry focused on finance, education, communication, management, training, engineering, and aesthetic design, the city must become points of exchange capable of providing the most updated information from across the globe. Conversely, as cities become a convergence of international ideas, the tertiary and quaternary sector can be expected to grow.

A virtual cult of 'creatives' have sprung up embodying and often describing and defending the post-industrial ethos. They argue that businesses that create intangibles have taken a more prominent role in the wake of manufacturing's decline.

Actor and then-artistic director of the Old Vic Theatre, Kevin Spacey, has argued the economic case for the arts in terms of providing jobs and being of greater importance in exports than manufacturing (as well as an educational role) in a guest column he wrote for The Times.

Critics

Post-industrialism is criticized for the amount of real fundamental change it produces in society if any at all. A mild view held by Alan Banks and Jim Foster contends that representations of post-industrial society by advocates assume professional, educated elites were previously less relevant than they have become in the new social order, and that changes that have occurred are minor but greatly embellished. More critical views see the entire process as the highest evolution of capitalism, wherein the system produces commodities as opposed to practical goods and is determined privately instead of socially. This view is complemented by the assertion that “the characteristic feature of a modern [that is, post-industrial] society is that it is a technocracy.” Such societies then become notable for their ability to subvert social consciousness through powers of manipulation rather than powers of coercion, reflective of the “ideology of the ruling class [as] … predominantly managerial.”

In line with the view that nothing fundamental has changed in the transition from industrial societies to post-industrial societies is the insistence of lingering problems from past development periods. Neo-Malthusian in essence, this outlook focuses on post-industrial society’s continuing struggle with issues of resource scarcity, overpopulation, and environmental degradation, all of which are remnants from its industrial history. This is exacerbated by a “corporate liberalism” that seeks to continue economic growth through “the creation and satisfaction of false needs,” or as Christopher Lasch more derisively refers to it, “subsidized waste.”

Urban development in the context of post-industrialism is also a point of contention. In opposition to the view that the new leaders of post-industrial society are increasingly environmentally aware, this critique asserts that it rather leads to environmental degradation, this being rooted in the patterns of development. Urban sprawl, characterised behaviourally by cities “expanding at the periphery in even lower densities” and physically by “office parks, malls, strips, condo clusters, corporate campuses, and gated communities,” is singled out as the main issue. Resulting from a post-industrialist culture of “mobile capital, the service economy, post-Fordist disposable consumerism and banking deregulation,” urban sprawl has caused post-industrialism to become environmentally and socially regressive. Of the former, environmental degradation results from encroachment as cities meet demands on low-density habitation; the wider spread of population consumes more of the environment while necessitating more energy consumption in order to facilitate travel within the ever-growing city, incurring greater pollution. This process evokes the neo-Malthusian concerns of overpopulation and resource scarcity that inevitably lead to environmental deterioration. Of the latter, “post-industrialism’s doctrine of … mobility and malleability” encourage a disconnect between communities where social belonging falls into the category of things considered by the “post-Fordist disposable consumer[ist]” attitude as interchangeable, expendable, and replaceable.

Post-industrialism as a concept is highly Western-centric. Theoretically and effectively, it is only possible in the Global West, which its proponents assume to be solely capable of fully realizing industrialization and then post-industrialization. Herman Kahn optimistically predicted the “economic growth, expanded production and growing efficiency” of post-industrial societies and the resultant “material abundance and… high quality of life” to extend to “almost all people in Western societies” and only “some in Eastern societies.” This prediction is treated elsewhere by contentions that the post-industrial society merely perpetuates capitalism.

Recalling the critical assertion that all modern societies are technocracies, T. Roszak completes the analysis by stating that “all societies are moving in the direction of technocracies.” From this, the foremost “suave technocracies” reside in the West, whereas all others are successively graded in descending order: “vulgar technocracies,” “teratoid technocracies,” and finally “comic opera technocracies.” This view importantly presumes one transition and furthermore one path of transition for societies to undergo, i.e. the one that Western societies are slated to complete. Much like the demographic transition model, this prediction does not entertain the idea of an Eastern or other alternative models of transitional development.

Neologism

When historians and sociologists considered the revolution that followed the agricultural society they did not call it a "post-agricultural society". "Post-industrial society" signifies only a departure, not a positive description.

One of the word's early users, Ivan Illich, prefigured this criticism and invented the term Conviviality, or the Convivial Society, to stand as a positive description of his version of a post-industrial society.

Social critique

A group of scholars (including Allen Scott and Edward Soja) argue that industry remains at the center of the whole process of capitalist accumulation, with services not only becoming increasingly industrialized and automated but also remaining highly dependent on industrial growth.

Some observers, including Soja (building on the theories of the French philosopher of urbanism Henri Lefebvre), suggest that although industry may be based outside of a "post-industrial" nation, that nation cannot ignore industry's necessary sociological importance.

White flight

From Wikipedia, the free encyclopedia

White flight is a term that originated in the United States, starting in the 1950s and 1960s, and applied to the large-scale migration of people of various European ancestries from racially mixed urban regions to more racially homogeneous suburban or exurban regions. The term has more recently been applied to other migrations by whites, from older, inner suburbs to rural areas, as well as from the U.S. Northeast and Midwest to the milder climate in the Southeast and Southwest. The term has also been used for large-scale post-colonial emigration of whites from Africa, or parts of that continent, driven by levels of violent crime and anti-colonial state policies.

 

Migration of middle-class white populations was observed during the Civil Rights Movement in the 1950s and 1960s out of cities such as Cleveland, Detroit, Kansas City and Oakland, although racial segregation of public schools had ended there long before the US Supreme Court's decision Brown v. Board of Education in 1954. In the 1970s, attempts to achieve effective desegregation (or "integration") by means of forced busing in some areas led to more families' moving out of former areas. More generally, some historians suggest that white flight occurred in response to population pressures, both from the large migration of blacks from the rural South to urban northern and western cities in the Great Migration and the waves of new immigrants from around the world. However, some historians have challenged the phrase "white flight" as a misnomer whose use should be reconsidered. In her study of West Side in Chicago during the post-war era, historian Amanda Seligman argues that the phrase misleadingly suggests that whites immediately departed when blacks moved into the neighborhood, when in fact, many whites defended their space with violence, intimidation, or legal tactics. Leah Boustan, Professor of Economics at Princeton, attributes white flight both to racism and economic reasons.

The business practices of redlining, mortgage discrimination, and racially restrictive covenants contributed to the overcrowding and physical deterioration of areas where minorities chose to congregate. Such conditions are considered to have contributed to the emigration of other populations. The limited facilities for banking and insurance, due to a perceived lack of profitability, and other social services, and extra fees meant to hedge against perceived profit issues, increased their cost to residents in predominantly non-white suburbs and city neighborhoods. According to the environmental geographer Laura Pulido, the historical processes of suburbanization and urban decentralization contribute to contemporary environmental racism.

United States

In the United States during the 1940s, for the first time a powerful interaction between segregation laws and race differences in terms of socioeconomic status enabled white families to abandon inner cities in favor of suburban living. The result was severe urban decay that, by the 1960s, resulted in crumbling "ghettos". Prior to national data available in the 1950 US census, a migration pattern of disproportionate numbers of whites moving from cities to suburban communities was easily dismissed as merely anecdotal. Because American urban populations were still substantially growing, a relative decrease in one racial or ethnic component eluded scientific proof to the satisfaction of policy makers. In essence, data on urban population change had not been separated into what are now familiarly identified its "components." The first data set potentially capable of proving "white flight" was the 1950 census. But original processing of this data, on older-style tabulation machines by the US Census Bureau, failed to attain any approved level of statistical proof. It was rigorous reprocessing of the same raw data on a UNIVAC I, led by Donald J. Bogue of the Scripps Foundation and Emerson Seim of the University of Chicago, that scientifically established the reality of white flight.

It was not simply a more powerful calculating instrument that placed the reality of white flight beyond a high hurdle of proof seemingly required for policy makers to consider taking action. Also instrumental were new statistical methods developed by Emerson Seim for disentangling deceptive counter-effects that had resulted when numerous cities reacted to departures of a wealthier tax base by annexation. In other words, central cities had been bringing back their new suburbs, such that families that had departed from inner cities were not even being counted as having moved from the cities.

During the later 20th century, industrial restructuring led to major losses of jobs, leaving formerly middle-class working populations suffering poverty, with some unable to move away and seek employment elsewhere. Real estate prices often fall in areas of economic erosion, allowing persons with lower income to establish homes in such areas. Since the 1960s and changed immigration laws, the United States has received immigrants from Mexico, Central and South America, Asia, and Africa. Immigration has changed the demographics of both cities and suburbs, and the US has become a largely suburban nation, with the suburbs becoming more diverse. In addition, Latinos, the fastest growing minority group in the US, began to migrate away from traditional entry cities and to cities in the Southwest, such as Phoenix and Tucson. In 2006, the increased number of Latinos had made whites a minority group in some western cities.

Catalysts

Legal exclusion

In the 1930s, states outside the South (where racial segregation was legal) practiced unofficial segregation via exclusionary covenants in title deeds and real estate neighborhood redlining–– explicit, legally sanctioned racial discrimination in real property ownership and lending practices. Blacks were effectively barred from pursuing homeownership, even when they were able to afford it. Suburban expansion was reserved for middle-class and working-class white people, facilitated by their increased wages incurred by the war effort and by subsequent federally guaranteed mortgages (VA, FHA, HOLC) available only to whites to buy new houses, such as those created by the Federal Housing Administration.

Roads

After World War II, aided by the construction of the Interstate Highway System, many White Americans began leaving industrial cities for new housing in suburbs. The roads served to transport suburbanites to their city jobs, facilitating the development of suburbs, and shifting the tax base away from the city. This may have exacerbated urban decay. In some cases, such as in the Southern United States, local governments used highway road constructions to deliberately divide and isolate black neighborhoods from goods and services, often within industrial corridors. In Birmingham, Alabama, the local government used the highway system to perpetuate the racial residence-boundaries the city established with a 1926 racial zoning law. Constructing interstate highways through majority-black neighborhoods eventually reduced the populations to the poorest proportion of people financially unable to leave their destroyed community.

Blockbusting

The real estate business practice of "blockbusting" was a for-profit catalyst for white flight and a means to control non-white migration. By subterfuge, real estate agents would facilitate black people buying a house in a white neighborhood, either by buying the house themselves, or via a white proxy buyer, and then re-selling it to the black family. The remaining white inhabitants (alarmed by real estate agents and the local newsmedia), fearing devalued residential property, would quickly sell, usually at a loss. Losses happened when they sold en masse, and would sell the properties to the incoming black families, profiting from price arbitrage and the sales commissions from both the blacks and the whites. By such tactics, the racial composition of a neighborhood population often changed completely in a few years.

Association with urban decay

Urban decay in the US: the South Bronx, New York City, was exemplar of the federal and local government's abandonment of the cities in the 1970s and 1980s; the Spanish sign reads "FALSAS PROMESAS", the English sign reads "BROKEN PROMISES".

 

Urban decay is the sociological process whereby a city, or part of a city, falls into disrepair and decrepitude. Its characteristics are depopulation, economic restructuring, abandoned buildings, high local unemployment (and thus poverty), fragmented families, political disenfranchisement, crime, and a desolate, inhospitable city landscape. White flight contributed to the draining of cities' tax bases when middle-class people left. Abandoned properties attracted criminals and street gangs, contributing to crime.

In the 1970s and 1980s, urban decay was associated with Western cities, especially in North America and parts of Europe. In that time, major structural changes in global economies, transportation, and government policy created the economic, then social, conditions resulting in urban decay.

White flight in North America started to reverse in the 1990s, when the rich suburbanites returned to cities, gentrifying the decayed urban neighborhoods.

Government-aided white flight

New municipalities were established beyond the abandoned city's jurisdiction to avoid the legacy costs of maintaining city infrastructures; instead new governments spent taxes to establish suburban infrastructures. The federal government contributed to white flight and the early decay of non-white city neighborhoods by withholding maintenance capital mortgages, thus making it difficult for the communities to either retain or attract middle-class residents.

The new suburban communities limited the emigration of poor and non-white residents from the city by restrictive zoning; thus, few lower-middle-class people could afford a house in the suburbs. Many all-white suburbs were eventually annexed to the cities their residents had left. For instance, Milwaukee, Wisconsin partially annexed towns such as Granville; the (then) mayor, Frank P. Zeidler, complained about the socially destructive "Iron Ring" of new municipalities incorporated in the post–World War II decade. Analogously, semi-rural communities, such as Oak Creek, South Milwaukee, and Franklin, formally incorporated as discrete entities to escape urban annexation. Wisconsin state law had allowed Milwaukee's annexation of such rural and suburban regions that did not qualify for discrete incorporation per the legal incorporation standards.

Desegregation of schools

In some areas, the post–World War II racial desegregation of the public schools catalyzed white flight. In 1954, the US Supreme Court case Brown v. Board of Education (1954) ordered the de jure termination of the "separate, but equal" legal racism established with the Plessy v. Ferguson (1896) case in the 19th century. It declared that segregation of public schools was unconstitutional. Many southern jurisdictions mounted massive resistance to the policy. In some cases, white parents withdrew their children from public schools and established private religious schools instead. These schools, termed segregation academies, sprung up in the American South between the late 1950s and mid-1970s and allowed parents to prevent their children from being enrolled in racially mixed schools.

Upon desegregation in 1957 in Baltimore, Maryland, the Clifton Park Junior High School had 2,023 white students and 34 black students; ten years later, it had twelve white students and 2,037 black students. In northwest Baltimore, Garrison Junior High School's student body declined from 2,504 whites and twelve blacks to 297 whites and 1,263 blacks in that period. At the same time, the city's working class population declined because of the loss of industrial jobs as heavy industry restructured. 

In Swann v. Charlotte-Mecklenburg Board of Education (1971), the Supreme Court ordered the desegregation busing of poor black students to suburban white schools, and suburban white students to the city to try to integrate student populations. In Milliken v. Bradley (1974), the dissenting Justice William Douglas observed, "The inner core of Detroit is now rather solidly black; and the blacks, we know, in many instances are likely to be poorer." Likewise, in 1977, the Federal decision in Penick v. The Columbus Board of Education (1977) accelerated white flight from Columbus, Ohio. Although the racial desegregation of schools affected only public school districts, the most vehement opponents of racial desegregation have sometimes been whites whose children attended private schools.

A secondary, non-geographic consequence of school desegregation and busing was "cultural" white flight: withdrawing white children from the mixed-race public school system and sending them to private schools unaffected by US federal integration laws. In 1970, when the United States District Court for the Central District of California ordered the Pasadena Unified School District desegregated, the proportion of white students (54%) reflected the school district's proportion of whites (53%). Once the federally ordered school desegregation began, whites who could afford private schools withdrew their children from the racially diverse Pasadena public school system. By 2004, Pasadena had 63 private schools educating some 33% of schoolchildren, while white students made up only 16% of the public school populace. The Pasadena Unified School District superintendent characterized public schools as "like the bogey-man" to whites. He implemented policies to attract white parents to the racially diverse Pasadena public school district.

Checkerboard and tipping models

In studies in the 1980s and 1990s, blacks said they were willing to live in neighborhoods with 50/50 ethnic composition. Whites were also willing to live in integrated neighborhoods, but preferred proportions of more whites. Despite this willingness to live in integrated neighborhoods, the majority still live in largely segregated neighborhoods, which have continued to form.

In 1969, Nobel Prize-winning economist Thomas Schelling published "Models of Segregation", a paper in which he demonstrated through a "checkerboard model" and mathematical analysis, that even when every agent prefers to live in a mixed-race neighborhood, almost complete segregation of neighborhoods emerges as individual decisions accumulate. In his "tipping model", he showed that members of an ethnic group do not move out of a neighborhood as long as the proportion of other ethnic groups is relatively low, but if a critical level of other ethnicities is exceeded, the original residents may make rapid decisions and take action to leave. This tipping point is viewed as simply the end-result of domino effect originating when the threshold of the majority ethnicity members with the highest sensitivity to sameness is exceeded. If these people leave and are either not replaced or replaced by other ethnicities, then this in turn raises the level of mixing of neighbors, exceeding the departure threshold for additional people.

Africa

South Africa

About 800,000 out of an earlier total population of 5.2 million whites have left South Africa since 1995, according to a report from 2009. (Apartheid, a system of segregation of whites, blacks, and people of other races, had ended in 1994.) The country has suffered a high rate of violent crime, a primary stated reason for emigration. Other causes include attacks against white farmers, concern about being excluded by affirmative action programs, rolling blackouts in electrical supplies, and worries about corruption and autocratic political tendencies among new leaders. Since many of those who leave are highly educated, there are shortages of skilled personnel in the government, teaching, and other professional areas. Some observers fear the long-term consequences, as South Africa's labor policies make it difficult to attract skilled immigrants. The migration of whites in South Africa was facilitated by the creation of immigration routes into European countries for people with European ancestry. For instance, the British government introduced the notion of patriality to ensure white people of British ancestry from Africa could settle in the UK. In the global economy, some professionals and skilled people have been attracted to work in the US and European nations.

Zimbabwe (Rhodesia)

Until 1980, the former British dependency of Rhodesia held a well-publicised image as being one of two nations in sub-Saharan Africa where a white minority of European descent and culture held political, economic, and social control over a preponderantly black African majority. Nevertheless, unlike white South Africans, a significant percentage of white Rhodesians represented recent immigrants. Initially, about three-fourths of resident whites were of British origin, with those from England and Wales predominating. After World War II there was a substantial influx of the British diaspora, including former colonials from India, Pakistan, and other British possessions in Africa. Also represented were working-class Englishmen responding to economic opportunities. In 1969 only 41% of Rhodesia's white community were natural-born citizens, or 93,600 people. The remainder were naturalised British and South African citizens or expatriates, with many holding dual citizenship.

During the Rhodesian Bush War, almost the entire white male population between eighteen and fifty-eight was affected by various military commitments, and individuals spent up to five or six months of the year on combat duty away from their normal occupations in the civil service, commerce, industry, or agriculture. These long periods of service in the field led to an increased emigration of men of military age. In November 1963, state media cited the chief reasons for emigration as uncertainty about the future, economic decline due to embargo and war, and the heavy commitments of national service, which was described as "the overriding factor causing people to leave". Of the male emigrants in 1976 about half fell into the 15 to 39 age bracket. Between 1960 and 1976 160,182 whites immigrated, while 157,724 departed. This dynamic turnover rate led to depressions in the property market, a slump in the construction industry, and a decline in retail sales. The number of white Rhodesians peaked in 1975 at 278,000 and rapidly declined as the bush war intensified. In 1976 around 14,000 whites left the country, marking the first year since Rhodesia's Unilateral Declaration of Independence in 1965 that more whites had left the country than arrived, with most leaving for South Africa. This became known as the 'chicken run', the earliest use of which was recorded the following year, often by Rhodesians who remained to contemptuously describe those who had left. Other phrases such as 'taking the gap' or 'gapping it' were also used. As the outward flow increased, the phrase 'owl run' also came into use as leaving the country was deemed by many to be a wise choice. Disfavour with the biracial Zimbabwe Rhodesia administration in 1979 also contributed to a mass exodus.

The establishment of the new Republic of Zimbabwe in 1980 sounded the death knell for white political power and ushered in a new era of black majority rule. White emigration peaked between 1980 and 1982 at 53,000 persons, with the breakdown of law and order, an increase in crime in the rural areas, and the provocative attitude of Zimbabwean officials being cited as the main causes. Political conditions typically had a greater impact on the decision to migrate among white than black professionals. Between 1982 and 2000 Zimbabwe registered a net loss of 100,000 whites, or an average of 5,000 departures per year. A second wave of white emigration was sparked by President Robert Mugabe's violent land reform programme after 2000. Popular destinations included South Africa and Australia, which emigrants perceived to be geographically, culturally, or sociopolitically similar to their home country.

From a strictly economic point of view, the departure figures were not as significant as the loss of the skills of those leaving. A disproportionate number of white Zimbabwean emigrants were well educated and highly skilled. Among those living in the United States, for example, 53.7% had a bachelor's degree, while only 2% had not completed secondary school. Most (52.4%) had occupied technical or supervisory positions of critical importance to the modern sector of the economy. Inasmuch as black workers did not begin making large inroads into apprenticeships and other training programs until the 1970s, few were in a position to replace their white colleagues in the 1980s.

Europe

Denmark

A study of school choice in Copenhagen found that an immigrant proportion of below 35% in the local schools did not affect parental choice of schools. If the percentage of immigrant children rose above this level, native Danes are far more likely to choose other schools. Immigrants who speak Danish at home also opt out. Other immigrants, often more recent ones, stay with local schools.

Ireland

A 2007 government report stated that immigration in Dublin has caused "dramatic" white flight from elementary schools in a studied area (Dublin 15). 27% of residents were foreign-born immigrants. The report stated that Dublin was risking creating immigrant-dominated banlieues, on the outskirts of a city, similar to such areas in France. The immigrants in the area included Eastern Europeans (such as those from Poland), Asians, and Africans (mainly from Nigeria).

Norway

White flight in Norway has increased in the 1970s with the immigration of non-Scandinavians from (in numerical order, starting with the largest): Poland, Pakistan, Iraq, Somalia, Vietnam, Iran, Turkey, Bosnia and Herzegovina, Russia, Sri Lanka, the Philippines, the former Yugoslavia, Thailand, Afghanistan, and Lithuania. By June 2009, more than 40% of Oslo schools had an immigrant majority, with some schools having a 97% immigrant share. Schools in Oslo are increasingly divided by ethnicity. For instance, in the Groruddalen (Grorud valley), four boroughs which currently has a population of around 165,000, the ethnic Norwegian population decreased by 1,500 in 2008, while the immigrant population increased by 1,600. In thirteen years, a total of 18,000 ethnic Norwegians have moved from the borough.

In January 2010, a news feature from Dagsrevyen on the public Norwegian Broadcasting Corporation said, "Oslo has become a racially divided city. In some city districts the racial segregation starts already in kindergarten." Reporters said, "In the last years the brown schools have become browner, and the white schools whiter," a statement which caused some minor controversy.

Sweden

After World War II, immigration into Sweden occurred in three phases. The first was a direct result of the war, with refugees from concentration camps and surrounding countries in Scandinavia and Northern Europe. The second, prior to 1970, involved immigrant workers, mainly from Finland, Italy, Greece, and Yugoslavia. In the most recent phase, from the 1970s onwards, refugees immigrated from the Middle East, Africa, and Latin America, joined later by their relatives.

A study which mapped patterns of segregation and congregation of incoming population groups found that, if a majority group is reluctant to accept a minority influx, they may leave the district, avoid the district, or use tactics to keep the minority out. The minority group in turn react by either dispersing or congregating, avoiding certain districts in turn. Detailed analysis of data from the 1990s onwards indicates that the concentration of immigrants in certain city districts, such as Husby in Stockholm and Rosengård in Malmö, is in part due to immigration influx, but primarily due to white flight.

According to researcher Emma Neuman at Linnaeus University, the white flight phenomenon commences when the fraction of non-European immigrants reaches 3-4% but European immigration show no such effect. High income earners and the highly educated move out first, so the ethnic segregation also leads to class segregation.

In a study performed at Örebro University, mothers of young children were interviewed to study attitudes on swedishness, multiculturalism and segregation. It concluded that while many expressed values as ethnic diversity being an enriching factor, but when in practice it came to choosing schools or choosing district to move to, ensuring the children had an access to a school with robust Swedish majority as they didn't want their children to grow up in a school as a minority and wanted them to be in a good Swedish language learning environment.

United Kingdom

For centuries, London was the destination for refugees and immigrants from continental Europe. Although all the immigrants were European, neighborhoods showed ethnic succession over time, as older residents (in some cases, ethnic British) moved out and new immigrants moved in, an early case of white flight (though the majority of London's population was still ethnic British).

In the 2001 census, the London boroughs of Newham and Brent were found to be the first areas to have non-white majorities. The 2011 census found that, for the first time, less than 50% of London's population were white British, and that in some areas of London white British people make up less than 20% of the population. A 2005 report stated that white migration within the UK is mainly from areas of high ethnic minority population to those with predominantly white populations. White British families have moved out of London as many immigrants have settled in the capital. The report's writers expressed concern about British social cohesion and stated that different ethnic groups were living "parallel lives"; they were concerned that lack of contact between the groups could result in fear more readily exploited by extremists. The London School of Economics in a study found similar results.

Researcher Ludi Simpson says that the growth of ethnic minorities in Britain is due mostly to natural population growth (births outnumber deaths) rather than immigration. Both white and non-white Britons who can do so economically are equally likely to leave mixed-race inner-city areas. In his opinion, these trends indicate counter urbanisation rather than white flight.

Oceania

Australia

In Sydney, the suburbs that attracted migrants were in the Greater Western Sydney region, away from the Sydney CBD, such as Fairfield, Cabramatta, Merrylands, Auburn, Bankstown and Liverpool, among others. Those areas popular with Middle Eastern and Asian migrants experienced a degree of white flight, with a concentration of Anglo-Celtic people in certain areas, such as Penrith in far-western Sydney, the Sutherland Shire and the Gosford–Wyong area of the Central Coast, north of Sydney. These suburbs remain predominantly Anglo-Australian.

According to the New South Wales Secondary Principals Council and the University of Western Sydney, public schools in that state have experienced white flight to private and Catholic schools wherever there is a large presence of Aboriginal and Middle Eastern students.

In 2018, NSW Labor Opposition leader Luke Foley talked about White flight.

New Zealand

Percentages of New Zealand school rolls occupied by certain ethnic groups in 2011, broken down by socioeconomic decile. White flight is evident with low-decile schools have a disproportionately low number of European students and high numbers of Maori and Pacifika students, while the inverse is true for high-decile schools.

 

White flight has been observed in low socioeconomic decile schools in New Zealand. Data from the Ministry of Education found that 60,000 New Zealand European students attended low-decile schools (situated in the poorest areas) in 2000, and had fallen to half that number in 2010. The same data also found that high-decile schools (which are in the wealthiest areas) had a corresponding increase in New Zealand European students. The Ministry claimed demographic changes were behind the shifts, but teacher and principal associations have attributed white flight to racial and class stigmas of low-decile schools, which commonly have majority Maori and Pacific Islander rolls.

In one specific case, white flight has significantly affected Sunset Junior High School in a suburb of the city of Rotorua, with the total number of students reduced from 700 to 70 in the early 1980s. All but one of the 70 students are Maori. The area has a concentration of poor, low-skilled people, with struggling families, and many single mothers. Related to the social problems of the families, student educational achievement is low on the standard reading test.