Sweden: The Sensible (and Slowly Shrinking) Welfare State

Sweden must be a schizophrenic country. Something strange is happening, after all, if a statist like Jeffrey Sachs and a rabid libertarian like yours truly both cited it as a role model in our remarks last month at the United Nations.

So who’s right? Well, it depends what you care about.

Jeffrey and other folks on the left are correct in that Sweden has a big government financed by high tax rates. According to OECD data, only France and Denmark have a bigger burden of government spending. And the OECD also shows that Sweden’s top income tax rate of 56.6 percent is the most onerous in the industrialized world.
But if you look at non-fiscal policy variables, Sweden ranks as one of the world’s most free-market nations. Like Denmark, it compensates for a big public sector with laissez-faire policy in other areas, including nationwide school choice and a partially privatized Social Security system.
And if you look at the direction of reform, Sweden is moving in the direction of smaller government, rejecting Keynesianism, lowering tax rates, and reducing the burden of the public sector.

In a column for Bloomberg, Anders Aslund elaborates on Sweden’s efforts to reduce the size of the state.

Charles Kirtley Wrote: Jun 12, 2012 5:00 AM

Sweden and other "successful" socialist countries have a huge advantage over less successful socialist countries like the U.S. Sweden has a largely homogeneous population where few people made a living being wards of the state. This is not true in the U.S., for example, where many people vote for their living.

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MIke274 Wrote: Jun 11, 2012 5:36 PM

We now know why Wisconsin and Minnesota are so wierd. They have a lot of Swedes in those states and all their brains have been frozen into believing in Progressive Socialism and the welfare state. Muslims like them because they can get the freebies while plotting to take them over one day jus like they are doing in Britain and France and many other countries.

faultroy Wrote: Jun 11, 2012 2:54 PM

Nice column, and we want more. We want to know what works and what does not. But you will have to agree that 71% of GDP is pretty good when most-- like USA-- are nearing 100% no? Yet, they still have a great healthcare system that everyone can access. Something to think about.

James_Offshore Wrote: Jun 11, 2012 3:08 PM

Sweden has a population about the size or less than New York City. We need to find another solution to our heath-care problems other than the Federal Government.

DockyWocky Wrote: Jun 11, 2012 2:19 PM

Obama's kind of socialialist Utopia!

60 - 70-% tax rates could even make Obama look good, not blonde, but good.

hunkahunka Wrote: Jun 11, 2012 1:53 PM

Won't wonders never cease? Sweden from socialist to now liberal democratic. Next, mid-western moderate conservatism. And God forbid, southern Tea Party conservatism. If they do that, Obama will have to cyber zap them like he's doing Iran.

Gene222 Wrote: Jun 11, 2012 1:37 PM

Governing Sweden (pop. 10 million) or say a state like Michigan or Georgia - must compare to governing a country of
300 million about like the comparison between driving a bicycle and driving an aircraft carrier. Or maybe a little green
grape vs. a big Texas watermelon. Huh?

Blair31 Wrote: Jun 11, 2012 1:45 PM

It can be done. Scott Walker, Mitch Daniels, and John Kasich, have proven that you can take on the government unions like AFSCME, the SEIU, the NEA, and the AFT, and survive. Rudyard Kipling said it:
"If you can keep your head, while all around you others are losing theirs, then you will be a man, my son."

Trude3 Wrote: Jun 11, 2012 2:20 PM

Dear Blair,
"If you can keep you head when all about you
are losing theirs and blaming it on you,
if you can trust yourself when all men doubt you,
but make allowance for their doubting too"....

Then there are 27 lines more before the last one which ends with

"And - which is more - you'll be a Man, my son !"

Don't shorten Kipling; all those lines are worth pondering on, but thanks for
reminding me of my favorite poem.

willis9 Wrote: Jun 11, 2012 11:59 AM

Sweden is doomed no matter what they do with their economic model, they have a large and growing minority of immigrant muslims that are declining assimilation, committing crimes at a high rate, and burdening their social services without contributing in any significant way to the tax base.

crackerette Wrote: Jun 11, 2012 12:44 PM

Willis you said,

"...they have a large and growing minority...that are...committing crimes at a high rate and burdening their social services without contributing in any significant way to the tax base..."

Why does that sound so eerily familiar?

Trude3 Wrote: Jun 11, 2012 2:29 PM

Dear Willis9,
You are correct about the growing immigrant muslims and crimes, and Malmo is one of the worst
places where the police dares not go into the ghettos. Perhaps Mr. Mitchell missed that part of
Sweden's big problems for Crackerette below is right; it is a big problem for Swedens neighbor
countries too and well as other European countries. And what has the U.S. learned from this ?

Topeka Wrote: Jun 11, 2012 11:14 AM

In other words....

Utopia will no longer be Sweden ... it will be Cuba or Venezuela...

I wonder what the traffic laws are in Cuba and how long / how much it will cost to change all of our traffic signals to match the utopian republic of Cuba...

... that is ... IF IF IF - Sweden Fails to become Europe's First New Failed Dhimmi State in the Caliphate since Kosovo ...

Wonder when we will start issuing Sanctuary Visa's to America-Hating Jihadists Who Are Afraid of Blond Swede's (Islamophobes!) who want to arrest them for practicing Sharia ...

... we already issue such Visa's to Victims of Coptic Christians, and Victims of Jordan's King Abdallah ... so why not Swede's?!

Colleen63 Wrote: Jun 11, 2012 3:01 PM

correction on your last statement...we issue visas TO Coptic Christians...they are the victims. I have Coptic friends who cannot go back to their home country for fear of their lives, simply because they are Coptic Christians.

1543 Wrote: Jun 11, 2012 9:42 AM

Another factor adding to the unsustainable economic system has been the influx of refugees. Scandinavian countries have had a rather simple set of problems when isolated in their homogenous societies. The challenges of diversity and strain on public welfare systems were minimal.

The European nations have never really had the challenges faced by the USA when it comes to diversity - we have not done a bad job of taking in "your tired, your poor, your huddled masses yearning to be free". Not perfect, but if you want to see real bigotry, racism and anti-semitism - check out Europe. Europeans may be in love with Obama; so why are their leaders all rich white guys and gals?

hunkahunka Wrote: Jun 11, 2012 1:44 PM

Good question! Why are all the leaders of OPEC Muslim? Why are the leaders of India Hindu? And why was there never a leader of China a Mongolian other than Genghis Khan ? Or other than some recently ousted Dutch, no Caucasian leaders of African nations? Good question 1543.

ResistWeMuch Wrote: Jun 11, 2012 9:01 AM

The Non-Existent Stairway To Socialist Heaven In Sweden

http://predicthistunpredictpast.blogspot.com/2011/11/non-existent-stairway-to-socialist.html

M2RB: Led Zepplin

Ron P Wrote: Jun 11, 2012 8:25 AM

Born in the USA where I lived for 65 years, then moved to Stockholm for family reasons 10 years ago. The weather: same latitude as the Kenai Peninsula in Alaska, 100 miles south of Anchorage: 59 degrees. The winters are not especially cold, compared with the North Dakota and nearby states, but they are long. Sweden is not a socilaist state--it is a nanny state, and the Swedes like it this way. They voted for it and finance it through their taxes. The current ruling coalition is dominated by the more conservative of the eight political parties. It would look like a moderate Democrat party in the USA. The Swedes have a good grip on finances and do smart things in this realm. More to say, but there seems to be a word limit here...

hunkahunka Wrote: Jun 11, 2012 1:48 PM

I know, some blog, uh? Character limits. Who'd a thunk it? Post repetitiously, if we're interested, we will track it down and read all of your posts.

Frank130 Wrote: Jun 11, 2012 8:17 AM

Sounds like Sweden experimented with big time socialism in the 1970's & 1980's and learned the lesson the hard way how bad it was for the nation. They were able to turn their nation around & head towards smaller government, lower taxes & more privatization of benefits (school competition & social security). The lessons were already out there to be learned, but it seems like each nation tends to ignore history & learn it the hard way. The USA is on the path now to learn it the hard way also. Eventually truth will win out. The USA is on a non-sustainable path & I'm wondering how long it will take for us to go back towards more efficient smaller government, free markets (not crony capitalism), school choice, lower taxes, etc.

johnm h Wrote: Jun 11, 2012 8:07 AM

Even at its worst Sweden intervened in its productive economy less than did the post war US government. Sweden’s interventions were primarily in labor markets, where it took longer to undercut a culture of hard work and saving. But Sweden is small enough and homogeneous enough to actually make its government accountable so is changing. It is not at all clear that we will be able to do the same.

Bob570 Wrote: Jun 11, 2012 7:09 AM

In other words they are becoming like we used to be, successful, and we are becoming like they used to be, on the path to path to failure.

Dan107 Wrote: Jun 11, 2012 6:51 AM

Mr Mitchell, you haven't been to a Swedish thermal spa?

Pistol Wrote: Jun 11, 2012 6:26 AM

Sweden got extremely wealthy during WW II, as did most neutral countries selling to both sides. The Bofors 40mm AA gun was standard issue in several navies on both sides. And like many people and nations, they did not handle their new prosperity perfectly. Their work ethic, social homogenity, and traditional socially responsible values have been undoing the unsustainable path they were on. We also got rich, not from the war itself, but from the lack of competition from the world's bombed out factories. We also embarked on unsustainable paths, unsustainable because our competition didn't cooperate and stay in rubble. Union power, nanny government fooishness, and unfunded liabilities are a huge part of the unsustainable path. How

Pistol Wrote: Jun 11, 2012 6:31 AM

heartening that in Wi, San Diego and San Jose, American voters are following Sweden. Now if we can just emulate the Swedes and actually eliminate high priced deadwood government departments like the EPA, NEA, Dept of E (Peanut Jimmy's creation that keeps alive his knack for lousy government) and crony capitalism subsidies, we can turn around too. And Sweden, like most countries in that corner of the world, has very rigorous immigration policies.

George257 Wrote: Jun 11, 2012 5:18 AM

It sounds like a beautiful place to visit, but perhaps not in winter.

George257 Wrote: Jun 11, 2012 5:22 AM

That would be like us in the N. Hemisphere going camping in December. What course was he doing? Oh yes, Environmental Studies. Most courses ending in the word 'studies' are bogus. If they were genuine academic disciplines there would be proper names for them.

George257 Wrote: Jun 11, 2012 5:25 AM

My extremely interesting and insightful posts above were meant to appear beneath the article about the Univ. of Wisc. student who went hiking in the mountains in NZ in winter, and then surprisingly got lost. Sorry for any confusion caused.

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