Flexicurity

Abstract

Abstract Some Japanese reformers claim the only alternative to economic corrosion is a harsh Anglo-American style of neoliberalism. But there is a third choice: the Nordic system of “flexicurity” (flexibility and security). Market-led creative destruction creates wealth which helps fund measures promoting equality and security. The latter, in turn, creates political support for creative destruction. For example, so-called active labor measures are used to help those who lose jobs find new ones at good pay via training and matchmaking. This approach has produced results superior to both neoliberalism and the growth-harming form of social safety net seen in southern Europe. The Nordics have generally done better on issues of wage growth, unemployment, income equality and security, GDP growth, and productivity. The cost is higher taxes. In Japan, voters resist tax hikes because they don’t trust Tokyo to use the money well. On the other hand, Japan’s universal healthcare and social security rely on government spending.