Sweden: Socialist utopia?

Whenever rational people try to point out the failures of Socialism, people on the left always cry foul, pointing out the success stories of the Scandinavian countries, Sweden in particular. Sweden, they say, is a spectacularly successful socialist country, with universal health care, generous pensions, and good schools. We in America, they say, should adopt the socialist system so that we could experience the many joys and benefits of Democratic Socialism. Are they correct? 

The answer can be found in a 2018 documentary by Swedish economist Johan Nordberg. [Freetochoose.tv] The information that follows is presented here strictly from that presented by Mr. Nordberg and the many experts he interviewed, not from any preconceived notions of mine. I urge the reader to watch the documentary; 55 minutes of time well spent for those who want the facts. 

A concise way to sum up Sweden’s economic history: Rags to Riches to Rags to Riches. In the 1600s and 1700s, Sweden was mired in poverty, an agrarian economy with a gloomy climate. One of the poorest nations in Europe. About the time the American colonies were hatching rebellious plots against England, a Swedish priest named Anders Chydenius was a source of irritation to the monarchs of Sweden, advocating for individual freedoms and workers’ rights, things unheard of for his time. His ideas found traction and he won a seat in Parliament, a seat he eventually lost. When he died in 1803, his ideas were widely known but not yet implemented. Soon, however, the ideas of the free market began to take root. People were free to start a business. Workers could relocate and negotiate the terms of their employment. For the next century, Sweden moved steadily up the ladder of prosperity. This situation prevailed until about 1950, helped by the fact Sweden escaped the destruction of infrastructure sustained by the rest of Europe in WWII; Sweden had remained neutral, and was thus poised to provide goods and services to other countries crippled by war. Times were good indeed. 

And then… they nearly lost it all.

Around 1960, Democrat Socialists gained control, and the welfare state began. By the 1970s, Sweden had government-run healthcare, education, welfare, and retirement. Taxes began to skyrocket. In 1970, employees fees [payroll taxes] were around 12%. By 1979, they were almost 40%, and people began to see the system was unsustainable. Children’s author Astrid Lindgrin wrote a scathing critique of a system that caused her to pay a marginal tax rate of 102%. Genius film director Ingmar Bergman fled to Germany when he was assessed 139%. Owners were losing their businesses because of a law that required them to pay into a “Wage Earners Fund,” proceeds of which were used to purchase company stock. Interest rates skyrocketed, factories were relocating, the job market dried up.   In 1983, the absurd persecution of successful entrepreneurs and businesses prompted the largest protest demonstration ever held in Sweden: some 100,000 marchers demanded change. To their credit, leadership responded.

•The role of government was vastly reduced, as were taxes.

•Taxes still pay for many services, but they are PRIVATELY MANAGED. [pensions, education, elderly care, welfare, healthcare, childcare]

•Government got out of the railroad business.

•A school voucher system allows students to attend the public or private school of their choice. Competition insures quality.

•Private health insurance is still available from private companies.

•No government interference between business and labor.

•No minimum wage laws.

•Pensions are based on individual contributions and market performance. [like Union Building Trades in America]

•Taxes are about 60% on low and middle income wage earners. Sales taxes are 25%, compared to 8% in America. 

Johan Nordburg concludes by saying Swedish experience proves the answer to prosperity is the Free Market System, not Socialist Policies. The biggest lesson, he says, is if you want to fairly distribute the cake, someone has to bake it first, and without economic growth, there is no wealth to share. 

So can we learn from Sweden? You bet. But is Sweden socialist? No way. Not even close. 

God Bless until next time, Jeff