Not really. The state can purchase equipment and sell product on international markets. That is how Hussein’s Iraq worked with no taxes.
What I mean is that there is a market for the oil, the capital equipment, the labor, etc. Without these markets, Norway’s economy would be in the tank.
That Norway’s GDP wealth is a function of its oil becomes very obvious if you study GDP figures. Oil rich countries led 2008
-
Qatar 87,717
-
Luxembourg
-
Norway
-
Brunei
If one wants to measure the impact of functional socialism, the social democracy of the Obama administration, you should compare Switzerland with Sweden. The Norwegian and Swedish model is what I call functional socialism, “central directive and regulation socialism”. Ronald Reagan called it “control and regulations socialism”. Sweden and Norway are also near perfect examples of the corporatist fascist state economics, the running of the country by the state in cooperation with labor unions and confederations of employers. (By fascist economic policies I don’t mean its pejorative meaning but its text book meaning.)
Sweden and Switzerland had after WWII an identical starting point, a workforce that were intact, no devastation of factories and great natural resources and industries.
Switzerland’s GDP today is USD 42,948 and Sweden’s is 35,934 i.e. the cost of the functional socialism Sweden had and the way the US is now taking is a reduction of GDP some 20 % over time, in Sweden it took 20 years before the economy collapsed. Had the US chosen functional socialism the US instead of being no 6 on the GDP PPP chart been no 15. Sweden is no 17. It corresponds to the drastic fall Sweden had during the fully functional socialist years between 1970-1990 a fall from no 4 to no 17.
Because of Sweden’s corporatist and functional socialist polices the very rich, top 1 % was left intact, income redistribution did not affect them i.e. Sweden has one of the world’s highest wealth GINI factors, measuring wealth inequality, far more wealth inequality than the US. On the surface income GINI, income equality, is low in Sweden but it is a false perspective, income mobility is only between in the 9 lower deciles. To move to the top deciles is very difficult. In the US social and wealth mobility to the top deciles is much higher.
Sweden reversed the disastrous functional socialist policies however they cannot retract the public sector, government subsidies dependence and the extreme taxation it demands. Public spending as well as taxation is above 50 % of GDP. As a result of having tax even low income earners, Sweden has one of the world’s most regressive taxation systems whilst the US has one of the most progressive taxation systems. Sweden can be seen as an example of the “Road to Serfdom” Hayek warned us about, the point of no return.
Excellent post! Thank you Illuminatus.
For those that are interested in comparisions between EU and the US in general and Sweden and US in particular, read the blog Super Economy. See the latest post below.## I compared raw GDP, if you do PPP the cost of functional socialism is in fact higher. Switzerland is no. 3 and Sweden is 18. A 30 % reduction in PPP!!!
+++++++++++++++++++++++++++++++++++++
Median earnings higher in U.S than in Europe.from Super-Economy by noreply@blogger.com (Tino)
I have previously written about the fact that the U.S has higher average income than European countries. This is not only due to the rich earning more. The U.S also has higher median income than most European countries. Here is median income in PPP adjusted dollars in the “mid-2000s” by the OECD.
I should warn that estimates of median income are much less reliable than GDP per capita.
1 Luxembourg (35.200)
2 United States (27.768)
3 Switzerland (27.228)
4 Norway (27.098)
5 Netherlands (25.876)
6 Canada (25.507)
7 Austria (22.916)
8 Denmark (22.796)
9 UK (22.306)
10 Ireland (21.402)
11 Iceland (21.317)
12 Australia (21.068)
13 Finland (20.915)
14 Korea (20.892)
15 Japan (20.879)
16 Germany (20.586)
17 Belgium (20.388)
18 Sweden (19.895)
19 France (19.047)
20 New Zealand (16.798)
21 Spain (16.456)
22 Italy (16.140)
23 Greece (15.996)
24 Portugal (11.927)
25 Czech Rep. (10.760)
26 Hungary (8.714)
27 Slovak Rep. (7.838)
28 Poland (7.326)
29 Mexico (4.350)
France, which Social Democrat Bruce Bartlett thinks is a pretty positive role model for America, has a median income 31% lower than the U.S. Do you think the median American would voluntarily reduce his or her standard of living by 31% to get “better restaurants; and greater income equality”?
Not only does the educated class do much better in the U.S compared to Europe, the median earner are also better of here.
But why let objective facts stand in the way of leftist theory?
Cmon..
Socialists don’t even classify the Scandinavian countries as socialist.
I’ve debated with plenty that regularly use Scandinavian countries as examples of working socialism or social democracy.
Unless you call Democrats and liberals socialists, then I doubt it.
That’s why this thread is called “The Myth of Scandinavian Socialism.” Firstly, the Scandinavian countries are not socialist nor are their governments as interventionist as some claim. Secondly, the Scandinavian countries are not as successful as some claim.
A dead give away to the nature of the falseness of this post is the start. “Many leftists.”
I think it might be a very good idea to do a wiki-style summary of this whole thread, with quotations by users, links, statistics and so on. There’s loads of good debate and information in this thread worth delivering in an easy-to-access style.
French hospitality, wtf is that ?
And I lol’d when I read the first quote. Welfare state seems to work well? Nowadays, the big debate here in France is wether we’re all going to die or not. The state has a HUGE debt, and each year the debt grows bigger and bigger. There’s absolutly no jobs for young people AND too old people. Young people around 20 suffer from unemployment, the rate is about 20 or 25%. I’ve actually tried to find a job last summer. There’s none. Appart from grape harvesting in september… (to make wine and champagne ;)).
There’s no more money for retirements, the retirement system is completly socialized : everybody pay for everybody, ie. bosses pay for their employees, employees pay for people who never worked etc. The gov want to increase the retirement age, from 60 to 63, and the left-wing opposition and the labour unions are pissed off and have already striked several times because of this.
In France, the minimum wage is 8€. About 30% of this wage goes to the state. But the worst is that your boss must pay about TWICE as much as what you earn to the state : if you earn 8€/hrs, he has to pay 8€ taxes to the state. That’s why there’s no job, who the f*ck would hire and pay 16€/hrs for a 20 years old guy who never worked in his life and with no degree or any experience ?
Another figure I learned today at school : 30% of families income come from the state, the state gives money directly to “poor” families. Yeah, you heard right. 30% And my teacher actually thinks it’s not enough (I’m in economics college). WTF is going on in this country ?!
There’s also lot of crimes. In very poor areas it’s really scary.
Well, can’t finish this post I’ve got to go 
People from that part of the world have a distorted view of America. I met a couple from Holland when I was touring Havana Cuba. I said I was shocked how run down this country is. Imagine the scene: little indoor plumbing, sewage in the streets, buildings crumbling before your eyes. The couple was a little surprised at what I said because they thought that most cities in America were as run down as Cuba.
LOL
Even most places in Latin America are far better than Cuba.
If you know how to do that…
The Scandinavian model in general and Sweden in particular has been the dream, utopia, of many US Democrats and left liberals. The comprehensive Social Democratic Welfare state with state intervention in everything, with the great social engineer at the helm.
As I’ve written before is that if US tried to emulate the comprehensive welfare model with high over al taxation the US would not become like Sweden it would become like Greece. Greece is now collapsing in a similar way that California is. Huge bureaucracies with very corrupt polices, extremely large Public Sector Unions that have gotten outrageously high benefits paid by cheap money, loans. US public service employees have wages and benefits nearly 200 % of the average private sector worker, Greece is about the same.
In Sweden it would create massive strikes if public Sector Employees would earn more on average than the comparable Private Sector worker. .In Sweden the formula has been 80 % i.e. Public Sector employee gets 80 %.
You should also read the most interesting essay by Brooks in today NY times.
Op-Ed Columnist - The Limits of Policy
Roughly a century ago, many Swedes immigrated to America. They’ve done very well here. Only about 6.7 percent of Swedish-Americans live in poverty. Also a century ago, many Swedes decided to remain in Sweden. They’ve done well there, too. When two economists calculated Swedish poverty rates according to the American standard, they found that 6.7 percent of the Swedes in Sweden were living in poverty.
In other words, you had two groups with similar historical backgrounds living in entirely different political systems, and the poverty outcomes were the same.
A similar pattern applies to health care. In 1950, Swedes lived an average of 2.6 years longer than Americans. Over the next half-century, Sweden and the U.S. diverged politically. Sweden built a large welfare state with a national health service, while the U.S. did not. The result? There was basically no change in the life expectancy gap. Swedes now live 2.7 years longer.
Again, huge policy differences. Not huge outcome differences.
… we should all probably calm down about politics. Most of the proposals we argue about so ferociously will have only marginal effects on how we live, especially compared with the ethnic, regional and social differences that we so studiously ignore.
Apropos of nothing, I just optioned a screenplay to a production company in Sweden. The producer said the film industry is financed at least partially by public funds. I thought it a bit ironic that me the Libertarian is getting his work paid for by a country using public funds. I was also surprised that Sweden of all countries wanted my script because it’s a screwball comedy and I never thought of Swedes as having a sense of humor. [no bashing, please. I freely admit I’m provincial.]
Sorry for the interuption. Continue.
They are Swedes, not Germans, your getting your Europeans mixed up. 
Sorry if someone already asked this, I haven’t read the whole thread, starting from the beginning it’s like a freaking book.
When you say “business freedom” does this mean it is easier to start a business because there is less bureaucracy? Could it mean that their business regulations are different?