from Stephen Bezruchka at U Washington.

I recall once being asked what inequality is good for and stumbling to
support the opposite side.  It is supposed to be better for business, and
growth.  Just let the rich and business take as much as they can grab and
some will trickle down.  Kuznets wrote about this in the 1950s, but there
has been scant little evidence that it works.  The rich won't tell you
this.  But here it is in the NYT!  And notice Japan.  Stephen
**

NYT October 14, 2004 Nordic Countries Come Out Near the Top in Two
Business Surveys By ELIZABETH BECKER

WASHINGTON, Oct. 13 - Forget the stereotypes about Nordic socialism and
how its high taxes and expensive public health care systems are destroying
private enterprise.

In two reports, the Nordic countries bested some of the world's hottest
economies. The countries dominate the top ranks of a list of most
competitive economies in the world, and a new report of the best places to
do business.

In the annual global competitiveness rankings of the World Economic Forum,
released on Wednesday, Finland was the world's most competitive economy,
and Sweden, Denmark, Norway and Iceland were 3rd, 5th, 6th and 10th,
respectively.

In the "Doing Business'' report, released by the World Bank, Denmark,
Finland, Norway and Sweden were ranked near the top as well. The United
States was ranked N0. 2 on both lists.

So why don't people automatically mention Denmark and Finland when
conversations turn to development success stories or good financial bets?

"It's that old myth that social protection requires more business
regulations and hurts business," said Caralee McLeish, an author of the
World Bank survey. "In fact, we found that social protection is good for
business, it takes the burden off of businesses for health care costs and
ensures a well-trained and educated work force.''

The World Economic Forum came up with the same answer, though it was
couched in lingo.

"The Nordic countries are characterized by excellent macroeconomic
management over all - they are all running budget surpluses - they have
extremely low levels of corruption, with their firms operating in a legal
environment in which there is widespread respect for contracts and the
rule of law, and their private sectors are on the forefront of
technological innovation,'' said Augusto Lopez-Claros, director of the
global competitiveness program at the World Economic Forum.

Strong, honest and transparent public institutions with most workers
protected by labor unions are the cliches about Nordic countries. But one
of the essentials to their business successes is their supposed Achilles'
heel, taxes.

Simeon D. Djankov, one of the authors of the World Bank study, said the
governments' philosophies were to let businesses alone, taxing them at
some of the lowest levels in the world so they can be competitive and
efficient. The governments then put high taxes on personal incomes to pay
for social services that underwrite their labor forces.

"You have to look behind the numbers," Mr. Djankov said. "Ignore the
Nordic reputation for tax burdens and you'll see they have established a
system that does not distort production, that gives people an incentive to
invest in businesses and in stocks because the corporate taxes are so
low.''

Asian countries rounded out the ranks of success stories in the
competitive rankings. Taiwan, Singapore and Japan were in the top 10, a
particular jump for Japan, which ranked 21st three years ago. China
dropped to 46 from 44 on the list.

The Asian countries at the top of the list share some of the same
attributes as the Nordic countries. They place few obstacles for business
enterprises and offer strong protection of property rights. They also
 place a high premium on education.

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