Scandinavian socialist head implosion
A Scandinavian economist once said to Milton Friedman: “In Scandinavia, we have no poverty.” Milton Friedman replied: “That’s interesting, because in America, among Scandinavians, we have no poverty, either.”
FULL REPORT HERE. (pdf)
Proof that capitalism is responsible for whatever successes a welfare state boasts. Like Mark Levin says, it thrives in spite of socialism. The socialist welfare state is a leach upon the free market system, but in spite of the hindrance it creates, by sucking wealth creation money from the private sector, free market capitalism is resilient enough to overcome the burden, up to a point.
Big government planners cannot make up for the wealth of knowledge and experience that exists within society as a whole. It is that vast knowledge that is the calibrator for the free market system, able to react in intricate detail to the subtle shifts and trends, as well as compensate for the economic bubbles that will occur, and right them, far better than any one government can do, which the latter has a long history of prolonging the misery.
“Since the start of the social democratic era in Sweden, the country’s growth trajectory has been lower,” says Sanandaji. “Sweden has done best when it has had a small welfare state. When the welfare state expanded, it crowded up private sector jobs and growth.”
The Reality about the Swedish Welfare State
Sweden is often used by social democrats and other statists as an example of a country whose welfare policies lead to more equality and greater wealth, and they assert the Swedish model should therefore be copied by other countries around the world. Sweden is usually illustrated as a country with a high public share on GDP and, at the same, time low crime rates, high life expectancy, and a high degree of social cohesion.
The Finnish Libera Foundation just published the report The Swedish Model Reassessed written by the Swedish researcher Nima Sanandaji. The report offers a new perspective on the development of the Swedish economy and elaborates on the reasons why Sweden is a relatively rich and peaceful country. Sanandaji states that the success of Swedish society is not due to the welfare state but caused by informal institutions in Lutheran Sweden such as honesty, frugality, and thrift. He sees those informal institutions (moral capital) as the key drivers of entrepreneurship, inventiveness, and economic growth.
He also refers to the situation of Swedish immigrants in the US (which were mainly poor Swedes leaving Europe to seek out better opportunities). The report illustrates that Americans with Swedish ancestry have a GDP per capita of 56,900 USD, whereas the Swedish GDP per capita (excluding immigrants) is just 36,600 USD. Furthermore Swedish immigrants in the US earn about 10,000 USD more than the average American.
This also as well:
‘Free markets to thank for Swedish model success’
Published: 10 Sep 12 15:46 CET |
While Sweden is often held up as a shining example of the benefits of a generous welfare state, a new paper argues that free markets, rather than a large state sector, are the real key to Sweden’s economic success.
“Sweden’s success has had nothing to do with the welfare state,” the report’s author, Nima Sanandaji, tells The Local.
“If you want to argue for the benefits of a free market economy, Sweden is a great example.”
Sanandaji, an Iranian-born Kurd who came to Sweden as a child, lays out his contrarian case in a paper published recently by the Institute of Economic Affairs in the UK.
The “Swedish model” of high taxes and generous welfare benefits has long been held up by parties on the left in the UK and the United States as an example of a high-tax society with solid economic growth.
In recent years, Sweden has also received a great deal of attention for the way in which the country has successfully navigated the global financial crisis without suffering from a prolonged rise in unemployment or negative growth.
But Sanandaji, who founded the liberal Swedish think tank Captus, explains that much of the praise for Sweden’s economic model is misplaced.
“The idea of Sweden being some sort of socialist utopia is very widespread. Sweden has a lot of positive social outcomes and is known as a social democracy with high taxes. But this myth is more a product of correlation rather than causation,” he says.
According to Sanandaji, the ingredients that have contributed to Sweden’s success – high social trust and an embrace of free-market ideology – were in place well before the country’s welfare state expanded in late 1960s and 1970s.