A study that was published in the Newsweek did find Finland the best country to live in the world. The answer to why this happened is very simple: Finland is a good place to live because we have had wonderful ability to work out compromises after compromises after compromises.
No single ideology or political group has been able to dominate government for a longer period of time. We have been able to create a society that is quite balanced and well-behaved even if it is basically just a quite old-fashioned capitalist society. Btw. The Newsweek-survey is here.
There are people who will now scream that there are a million poor people in Finland, at least according to a recent study in Finland. However, this is mostly just relative poverty. A very small part of this is real poverty which really keeps people hungry and deprived of all amenities.
Relative poverty will simply never, ever go away, and it will always be with us. It will not go away even if general living standards of people improves ten or hundred-fold. If the poor would be living like princes, the rich would live like emperors and the relative feeling of poverty would remain all the same.
One can fight to keep the differences in income as small as possible also under this economic system. This fight needs to be maintained forever. The apparent success of Finnish society is based largely in success of curbing the general differences of income in a society-wide level. This has been achieved mainly because of success of the labor movement, the activity of the political left and also because of the leveling effect of taxation.
However, the differences in income are a quite another thing altogether than the feeling of hurt among those who have smaller income than others. In the end, one of the realities of life is that differences of income have always existed and will always exist. They existed in communist countries also, even if a conscious effort was done to prevent them.
I'm an Epicurean myself, and the Epicurean solution is not to get more but to diminish the want. The feeling of hurt that is embedded in relative poverty is a result of wanting something others have but one cannot get. This hurt prevails even after one has the basic necessities of life are fully covered, if others just have it markedly better in a society. It is simply easier to mend the feeling of hurt that is caused by relative poverty than to, for example, remove all differences in income completely.
In the end, people will always find reasons to be jealous and hurt over even if everybody would get the exactly same amount of money. All the things that are said above are applicable only the well-to-do societies, where nearly everybody has the basics covered. Real hunger and deprivation will not go away even if you not pay attention to the bigger car of your neighbor.
However, in an affluent society even one of the main causes of anxiety is the relative feeling of deprivation and poverty. The level of deprivation or even poverty one feels is, in fact, mostly not decided by the real living conditions one has, but by how a person sees that the people one chooses to compare oneself are faring.
To attain the maximum well-being for a maximum amount of people we need a two-pronged approach in a modern well-to-do society. On the other hand, we need an assault on the real life excessive differences of income that inevitably do poison a society, when they reach a critical point.
On the hand, ensuring the happiness of people would demand them to diminish envy. Most of all they need to diminish the want for larger and more expensive things. This kind of want is never fully fulfilled. The desire for more or bigger things keeps many people unhappy, even if they do not have real reasons to be unhappy.
Of course, the last point is contrary the very basic teachings of capitalism. It is very hard to combine this idea with rising of the general standard of living though economic growth. Just this process at the end has brought us the standard of living be enjoy now.
However, there just might be a point where just maintaining what we already have could just be the wisest goal. We just could set new goals which would make self-controlled and mentally enriching activity, a good social life and simple leisure as important goals in life as a bigger house and an expensive pair of shoes are now.
PS. Alain De Botton has many wonderful ideas in this field and I have commented them here: http://beinghuman.blogs.fi/2010/01/31/why-do-we-cry-in-the-front-seat-of-a-bmw-7913966/