Today, many Americans don’t like capitalism. “Socialism would be better,” they say, “not
repressive Russian or Venezuelan socialism, but democratic socialism like what’s
practiced in Scandinavia.”
“I think we should look to countries like Denmark, like
Sweden.” – Bernie Sanders
“Do you want to be like Sweden? Kinda. Sounds pretty good.” –
Cenk Uygur
People
interviewed in this just released PBS documentary say, “America should be more
like Sweden.”
Johan Norberg made a documentary because he
wanted to set the record straight. “Sweden is not socialist, because the government
doesn’t own the means of production. To see that, you have to go to Venezuela or
to Cuba or North Korea. But we did have a period in the 1970s and 1980s when we
had something that resembled socialism – a big government that taxed and spent
heavily. And that’s the period in Swedish history when our economy was going
south.
So much so that even socialists complained about the high taxes. “Astrid Lindgren, who wrote the very popular children’s books
Pippi Longstocking
for
instance, was a social democrat, but she had made a lot of money from her
books. She found that she paid a 102% in taxes.”
“She [Lindgren] wrote this
angry essay about a witch who was quite mean and vicious, but not at all as
vicious as the Swedish tax authorities,” explains Norberg.
And yet, even though taxes were high they
did not bring in enough money to fund Sweden’s welfare state. “There were waiting
lines to get healthcare, people couldn’t get the pension that they thought that
they depended on for the future. At that point, the Swedish population just
said, “Enough! We can’t do this,” says Norberg.
Sweden then reduced government’s role. They cut
public spending, privatized the national rail network, abolished certain government
monopolies, eliminated inheritance taxes, and sold state-owned businesses like
the maker of Absolut Vodka. “Lowered taxes, reformed the pension system so that it
wasn’t unsustainable,” Norberg says. The results from the spending cuts and privatization? “This
impoverished peasant nation developed into one of the world’s richest
countries,” explains Norberg.
All I hear is that Sweden is this socialist paradise. “We do have a
bigger welfare state than the US, higher taxes than the US; but in other areas
when it comes to free markets, when it comes to competition, when it comes to
free trade, Sweden is actually more free market,” Norberg explains. That free market pays for
Sweden’s big welfare programs. “Today our taxes pay for pensions – you call it
Social Security – for 18 months paid parental leave, government-paid childcare for
working families. But having the government manage all of these things didn’t
work well. So we had to manage it in another way,” explains Norberg. They’ve privatized. “We realized
in Sweden that with these government monopolies we don’t get the innovation
that we get when we have competition,” he says.
“And this is particularly true for the
school system.” Sweden switched to a school voucher system that lets parents pick
their kids school and forces schools to compete. “And one of the results that
we’ve seen is not just that the private schools are better than the public ones, but even the public schools in the vicinity of private schools they often
improve. Because they have to,” says Norberg.
Sweden’s version of Social Security was going
broke. So, Sweden privatized that too. Privatize the pension system? That terrifies
people. “And obviously that scares people. But when they realize that the
alternative was that the whole pension system would collapse, they thought that
this is much better than nothing,” he says. “Now, the bulk of pensions is really
contribution-defined. So, if things are going well for Sweden pensions are increasing; but if things are going less well, pensions are automatically lowered. Which
basically takes away from politicians the ability to buy votes by just
promising higher pensions and letting future generations pay.”
And when it comes
to taxes, what Sweden does may surprise you. “The low-income earners in Sweden pay
a lot more than low income earners in America. So despite the fact that
Sweden looks like sort of a socialist country which taxes the rich exorbitantly high, the
truth is the opposite.” People who earn a below-average income pay up to 60% in
taxes. “This is the dirty little secret about the Swedish tax system. We don’t
take from the rich and give to the poor – we squeeze the poor, because they are
loyal taxpayers,” points out Norberg.
Not taking more from the rich, school choice, privatization – Sweden
is anything but socialist. “You can’t turn your backs to the well, to the
creation of wealth.”
You can watch the full documentary Sweden: Lessons for America? at freetochoose.tv.
The Viking Blog 