2aguy
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- Jul 19, 2014
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A look at the so called Nordic Socialist countries....
INTERVIEW (Part I): Swedish Author Johan Norberg On The Devastating Impact Of Socialism, And What It Could Cost The U.S.
DW: There are a lot of people who cite the so-called “Nordic model” when advocating for socialism or “democratic socialism.” Is Sweden a socialist nation? And if it’s not, why do people seem to think it is?
NORBERG: Well, for some reason when I describe Sweden and Swedish policies to American socialists, they hate it; they seem to think that it’s awful. It’s a model not just based on an economy of private property and private enterprise, but also specifically, when you look at the business climate, we have low corporate taxes, we have free trade, we have, in many areas I would say, less regulation of business than the United States. We don’t have the kind of occupational licensing requirements that you do. In many of those areas, we are more fiercely capitalist than the United States. And those don’t seem to be the policies that the [Sen. Bernie] Sanders supporters are in favor of.
And if you also think about the kind of reforms that we’ve put in place since the 1990s – we’ve reformed social security, partially privatized it; we’ve opened up the public sector to competition and to freedom of choice; we have a national school voucher system – many different things to encourage dynamism and market forces. And that seems to be the total opposite of what any socialist that I’ve met is in favor of.
DW: Can you give me the abridged version of what happened in Sweden with the accumulation of wealth, the implementation of socialism, and then the realization that such ideas were not working?
NORBERG: Sure. We have to go back to that because this is the one story that people have forgotten. Their perception of Sweden is in many ways stuck in the 1970s and 1980s. That’s what they remember. This was the brief interlude in Swedish history when we really did experiment with socialist ideals. The background was that we had already made ourselves one of the richest countries on the planet, so we had a lot of money to redistribute. But, that was based on a different model. All that wealth was produced in an incredibly open economic model with a very limited government. Up until the early 1960s, Sweden had lower taxes than not just other European countries, but also lower taxes than the United States. That was the model that gave us all the wealth.
At that point, Swedish socialists and politicians said, “Let’s just redistribute this. We’ve got all of this wealth, so we don’t have to care about economic orthodoxy anymore.” And that’s the moment in time when they doubled the size of government, and jacked up all the taxes, and regulated the labor markets. The problem was that while you can go for some time with the accumulated wealth of yesteryear, eventually, you run out of it. At the beginning of the 1970s, we were 10% richer than other industrialized economies. 25 years later, we were 10% poorer than they were.
So almost at the exact moment when we began to grow the size of government, we began to lag behind all the other economies, and it was really the “Atlas Shrugged” moment in Swedish history because businesses left, entrepreneurs, innovators, our IKEAs and Tetra Paks, our great inventors and sportsman left Sweden because it wasn’t a hospitable climate for innovation and for starting businesses anymore. It all ended in a terrible crisis in the early 1990s, and that was the moment in time when everybody from the Left to the Right said, “This is all over. We can’t do this. We have to reform our systems and get back to the future, to get back to growth.”
INTERVIEW (Part I): Swedish Author Johan Norberg On The Devastating Impact Of Socialism, And What It Could Cost The U.S.
DW: There are a lot of people who cite the so-called “Nordic model” when advocating for socialism or “democratic socialism.” Is Sweden a socialist nation? And if it’s not, why do people seem to think it is?
NORBERG: Well, for some reason when I describe Sweden and Swedish policies to American socialists, they hate it; they seem to think that it’s awful. It’s a model not just based on an economy of private property and private enterprise, but also specifically, when you look at the business climate, we have low corporate taxes, we have free trade, we have, in many areas I would say, less regulation of business than the United States. We don’t have the kind of occupational licensing requirements that you do. In many of those areas, we are more fiercely capitalist than the United States. And those don’t seem to be the policies that the [Sen. Bernie] Sanders supporters are in favor of.
And if you also think about the kind of reforms that we’ve put in place since the 1990s – we’ve reformed social security, partially privatized it; we’ve opened up the public sector to competition and to freedom of choice; we have a national school voucher system – many different things to encourage dynamism and market forces. And that seems to be the total opposite of what any socialist that I’ve met is in favor of.
DW: Can you give me the abridged version of what happened in Sweden with the accumulation of wealth, the implementation of socialism, and then the realization that such ideas were not working?
NORBERG: Sure. We have to go back to that because this is the one story that people have forgotten. Their perception of Sweden is in many ways stuck in the 1970s and 1980s. That’s what they remember. This was the brief interlude in Swedish history when we really did experiment with socialist ideals. The background was that we had already made ourselves one of the richest countries on the planet, so we had a lot of money to redistribute. But, that was based on a different model. All that wealth was produced in an incredibly open economic model with a very limited government. Up until the early 1960s, Sweden had lower taxes than not just other European countries, but also lower taxes than the United States. That was the model that gave us all the wealth.
At that point, Swedish socialists and politicians said, “Let’s just redistribute this. We’ve got all of this wealth, so we don’t have to care about economic orthodoxy anymore.” And that’s the moment in time when they doubled the size of government, and jacked up all the taxes, and regulated the labor markets. The problem was that while you can go for some time with the accumulated wealth of yesteryear, eventually, you run out of it. At the beginning of the 1970s, we were 10% richer than other industrialized economies. 25 years later, we were 10% poorer than they were.
So almost at the exact moment when we began to grow the size of government, we began to lag behind all the other economies, and it was really the “Atlas Shrugged” moment in Swedish history because businesses left, entrepreneurs, innovators, our IKEAs and Tetra Paks, our great inventors and sportsman left Sweden because it wasn’t a hospitable climate for innovation and for starting businesses anymore. It all ended in a terrible crisis in the early 1990s, and that was the moment in time when everybody from the Left to the Right said, “This is all over. We can’t do this. We have to reform our systems and get back to the future, to get back to growth.”
