The Heritage Foundation was created to be Pro US propaganda during the cold war. Of course they lie to make the numbers look better. They probably only measure federal government spending and leave out state and local or something. Or lie.
Muslims from where? What socioeconomic status? Do they have citizenship? How?
The Heritage Foundation was created to be Pro US propaganda during the cold war. Of course they lie to make the numbers look better. They probably only measure federal government spending and leave out state and local or something. Or lie.
Doesn’t matter, neither side uses wrong statistics. They may mislead, but never use wrong statistics. Heritage index is a pretty good index to estimate economic freedom. It would completly discredit them, because the real statistics is available. Also, I got the same statistics from OECD, are they lying as well?
Also, you need to investige the issue more, because if they only included US federal spending, it would be around 20-25% of GDP. Not 37%.
Muslims from where? What socioeconomic status? Do they have citizenship? How?
Mostly from Afganistan, Somalia, and Iraq, They are poor, but rich enough to get to Europe. And they get citizenship on humanitarian grounds, because most of them don’t qualify as fleeing from prosecution.
They are counting in a wrong way. US government spending IS 6.4 trillion divided by the 14.5 (estimate).
These are the numbers… Remember that you have to use nominal GDP (obviously) if you start to use real gdp then both countries have to use the same goods that they compare the GDP to. And obviously the Government spending has to be converted into “real” spending as well through the exact same index. So real GDP calculation is useless.
What I think is that they use real GDP and they count real gdp by somehow applying too small amount of inflation to the last year’s statistic.
Anyway the 37% is wrong. You can check the numbers from the US official buoreau of labor site and the nominal GDP is 14.4-6 (estimate) and spending is 6.4 trillion (estimate). There is no way you can get 37% out of these numbers.
I would like to know how your sources caluclate it…
The SS fund is part of the government spending I think. Maybe I am mistaken here.
The Finland’s government spending is 50.4 Billion this year. The local spending is 20 Billion. This and the TV tax is pretty much what you pay AFAIK, There might be some hidden stuff, but I am sure there is some hidden suff in US too.
Anyway they are close enough to be comparable.
It’s not wrong. It’s what it was the most recent years, hence pre-crisis. The recent years is a good way to check for governmental spending. In 2008 the costs was 5.3 trillion and the nominal GDP was 14.4 trillion. hence 37%. In 2009 it increased due to the crisis to 42%. Whatever it is in 2010 we don’t know yet, and you should not use estimates of nominal GDP. They can be very wrong. Let’s wait till 2010 is finished before we use number for the future.
The SS fund is part of the government spending I think. Maybe I am mistaken here.
The Finland’s government spending is 50.4 Billion this year. The local spending is 20 Billion. This and the TV tax is pretty much what you pay AFAIK, There might be some hidden stuff, but I am sure there is some hidden suff in US too.
I feel like you are not reading what I’m writing. In 2008, the total spending was 91 billion Euro. Your numbers are certainly omitting something and I think that’s the social security funds. I can’t find your numbers anywhere. And I use the same source for US, which gives US the numbers above. You are using different sources. Face it, the governmental spending in Finland is just as high as other Scandinavian countries. I got two sources confirming it. Do you need more?
Check out my OECD source and you will find it yourself. Give me the 2008 data, and then I can find out what your source is omitting.
Ok well, you may be right. Damn finnish government is sneaky indeed. Their own site does tell 50.1 billion though. But it seems if I look at some other meters the government spending is 71.1 billion (I am assuming this has no local spending, which would take total to 91.1). Yeah Finland seems to be the master of hiding the truth if that is the case. We BTW currently have tresury sec. who rivals Geithner, with his stupid statements.
For that I used the search engine called wolfram alpha BTW.
For US government spending either USgovspending.com (or something like that) and the official labor site.
A final word from a leading Swedish researcher and scholar on the Scandinavian Socialism (Social Democracy) . Note the hard core austerity program instituted in the 90s. A 25 % of spending.
by Anders Aslund | November 4th, 2010 | 10:20 am
In the 1970s, the Scandinavian or Swedish economic model was popular among leftwingers around the world. Today, in the aftermath of the global financial crisis, the Scandinavian model has achieved a new popularity but not with the left. Instead it is admired by the socially responsible, yet free-marketeering right.
The old social welfare state model was utterly statist, allowing social transfers to rise unimpeded as they were financed with ever higher taxes. The new Scandinavian model is a modern social welfare society. The role of the state is still large and welfare is pretty comprehensive, but public expenditure has shrunk impressively. Social transfers have been trimmed to reasonable proportions, and most publicly financed services are carried out by private, nonprofit, cooperative, and public contractors based on the free choice of Swedish citizens. For example, Sweden has a comprehensive school voucher system allowing parents to choose school for their children without private cost, if the kids only pass the entrance grades. This interesting evolution hopefully offers lessons to others.
The Scandinavian welfare state of the 1970s was utopian because it was impossible to finance. Its very populist idea was that the state should do ever more for the people without consideration of costs. But one of the outcomes was low growth from 1970 to 1993, accompanied by rising budget deficits. In the 1970s, Swedish social democratic economists harbored the naïve hope to “bridge” the business cycle, imagining that they had overcome the business cycle. The late social democratic Swedish Prime Minister Olof Palme symbolized such leftwing populism. In his world, everything that was economically rational was “politically impossible.” Still, the Scandinavian economies were always free-trade oriented, dominated by efficient, competitive private companies that were forced to finance the social democratic excesses through exorbitant taxes.
Utopia ended with big financial crashes and government changes. Resource-poor Denmark was the pioneer. In 1982, conservative Prime Minister Poul Schluter pegged the exchange rate of the Danish kroner to the deutschmark and used this disciplining anchor to slim down public redistribution and liberalize the economy. This peg remains.
Norway, Sweden and Finland continued devaluing, but they were all hit by severe banking crises in the early 1990s, bringing most of the big banks in the region into bankruptcy. During three years of crisis the Swedish GDP plummeted by 6 percent and the Finnish by 14 percent. Ultimately, the crisis was caused by a refusal to face up to resource constraints, but also by a gradual and poorly sequenced financial deregulation. Both Sweden and Finland were forced to devalue once again, but then both moved to inflation targeting, and in 1999 Finland adopted the euro.
The crisis brought down the long-lasting social democratic governments and ushered in principled free marketers, with Swedish Prime Minister Carl Bildt (1991–94) as a leading ideologue. The combination of severe financial crisis and new free-market governments cleared the way for systemic change. Because of its abundance of oil, wealthy Norway could persist with the old statist model while Sweden and Finland caught up with the pioneer Denmark. These crises laid the groundwork for recent economic successes.
Although social democrats intermittently returned to government in Sweden and Finland, they had accepted the new market-oriented paradigm. During the next 15 years, Sweden went through an extraordinary financial cleansing, cutting public expenditures from 71 percent of GDP in 1993 to 52 percent in 2008—that is, by almost one-fifth of GDP. Public revenues fell also with lower taxes, but only from 60 percent of GDP to 54 percent of GDP. As a result, Sweden’s budget deficit of 11 percent of GDP was transformed into a budget surplus of 2.5 percent of GDP. Meanwhile, its public debt declined from 78 percent of GDP to 47 percent of GDP. Finland’s public finances went through a similar tightening.
Growth has not suffered but accelerated during this financial cure because of stimulation of supply rather than demand. The Scandinavian countries have abandoned the old social democratic dogmas—but they have not gone all the way to free-market ideology. The question today is empirical: What works best? And the conclusion is energetic: Let us do it! Admittedly, deregulation, competition, and privatization are the most common solutions, but the choice is more pragmatic than ideological. Finland’s state-dominated school system is the best in the world, according to regular surveys by the Organization for Economic Cooperation and Development. The Swedish Teachers’ Trade Union tries to catch up with the Finns by demanding higher qualification of teachers and more testing of pupils in schools. When you call to a state agency or ministry in Sweden, you can usually reach the official you seek, while multi-questioning automatic answering machines are banned. The Swedes believe that the state should be competent, transparent, humane, and efficient.
As the crisis hit the world in the fall of 2008, the Scandinavian countries had budget surpluses and public debts of around 45 percent of GDP. These very open economies were badly hit by the crisis, which was worst for Finland, which had a GDP fall of 8 percent in 2009 and is already experiencing a double dip. Thanks to their remaining social transfers, the Scandinavian countries cushioned unemployment and provided large instant stimulus through these automatic stabilizers. Unemployment is almost as high as in the rest of the European Union, and is a major concern, but no unemployed need sleep in the street. The nonsocialist governments were adamantly opposed to any socialization of failing enterprises. Hardly any discretionary subsidies to dubious companies in structural crises were admitted. Sweden let Ford sell Volvo to Chinese Geely and GM Saab to Dutch Spyker.
As a result, the Scandinavian countries stand out as having pursued a responsible financial policy before, during, and after the global financial crisis. Sweden maintains a budget deficit of only 2 percent of GDP this year, aiming for a nearly balanced budget next year, and 2 percent of GDP budget surplus during the coming business cycle. Their economies are bouncing back, as always led by the export industry. Sweden is expecting a growth of nearly 5 percent this year after a similar decline last year. After their experiences with “Keynesian” demand management in the 1970s and 1990s, Scandinavians no longer believe in it. Their lesson is that sound fiscal balances are preferable and safer, while growth is brought about through supply measures: deregulation, privatization, and investment in human capital. Proportionately, they have the largest investment in research and development in the world, but much remains to be done to improve higher education and research.
Arguably, the Scandinavian countries are better managed and wealthier than ever. So is the new Scandinavian model something to boast about? I asked Swedish Foreign Minister Carl Bildt. He responded emphatically: No! “Last time Sweden was perceived as a model led to a complacency we could not afford. We have to continue reforming our society in an ever more competitive world. If we accept it as a model, we shall only lean back, doing too little to improve it.”
On September 19, the Swedish center-right government led by Fredrik Reinfeldt faced elections. It was reelected in spite of the financial crisis. This was all the greater a sensation since Sweden has been ruled by social democrats for 62 of the last 78 years. But this victory was well deserved. This government had cut taxes four times and abolished wealth taxes—the preceding social democratic government had actually eliminated inheritance and gift taxes, but even so achieving a budget surplus and reducing the public debt. Seldom has a government carried out so many small deregulatory reforms on a broad front.
With the social democrats obtaining only 30 percent of the vote even in their “homeland” Sweden, their statist model seems history. Populism is no longer popular in Scandinavia. Can the social democrats make a comeback with a more liberal face or do they belong to the dustbin of history? The competitive pressures from China and other emerging economies closer to Scandinavia are relentless.
Scandinavians still believe in the good state, but that state is much smaller and more exposed to competition than used to be the case.
Exactly. They have high economic freedom in areas bar equality/exploitatation. And it works fine. Have you lot been to Scandinavia? It’s fine. It’s not paradise, but it’s not a “basketcase”. Yes you won’t earn as much as in New York, or probably London, but I would rather earn a bit less and not be mugged. Or shot.
I’m afraid you have your statistics backward. In fact crime is much higher in Stockholm, the Swedish capital, than New York, especially rape. One of the few crimes that is that is lower in Stockholm than New York is murder.
Sweden as I’ve written works fine for the middle 80 % and top 1 % for the rest its bad, really bad. There is virtually no income redistribution to the lower 10 %, Sweden has the worlds most regressive tax system, the lowest 10 % pays more in tax of their income than the rest. Wealth inequality is among the worlds highest, much higher than the US.
Its not a basket case but definitely not something any sane person would emulate and use as a model. Unless its the neoliberal reforms of the 90s that saved Sweden from utter ruin, see article above. How anybody in the US can have the our crazy 25 years between 1968-1993 as a model is beyond my comprehension. Apparently US progressives and president Obama thinks the polices that drove Sweden to ruin are good policies and see the polices that saved Sweden as bad policies. The former made Sweden go from the 4th wealthiest country to the 17th and the latter made us come back to number 10. However had they never taken place we would have been like Switzerland, no change in status, still number 4.
I want to point out that murder is not that relevant for a businessman in New York. Generally the ones who get murdered are gang members or people involved in drugs. They don’t murder random people very often.
However, to get yor daughter raped, mugged on the street or your house get robbed, can happen to everyone in Stockholm. And it’s more common than in New York. Also, if your daughter get raped, good luck finding the rapist, because the police is not going to help you. Only 150 of 2000 rape cases were solved in 2002. Now the number of rapes is about 6000 rapes.
My saying is, if you support Sweden’s system in front of pretty much any country in the world, are idealistic and socialize like other Swedes, then you will love Sweden. However, if you don’t then you won’t like Sweden at all. You standard of living will not be very high, Sweden is not a safe paradise and people won’t like you.
I was wondering about more sources for this situation and the article. I would like to read more and was wondering if you could direct me to either books or articles outlining some of the policies they used?
I am not for Obama (the policies, I’m fine with the man, contrary to popular opinion) and his hurtful policies and would love to have more debate points on my side. I am pretty familiar with Mises’ work and I have read Rothbard’s work as well. My main point is to not sound hard right, but to be against hard left. Here in America though, being Libertarian puts you against both, and I hate it when people always assume me the opposite of them, no matter how much I explain myself.
Read the blog
Kurdish-Swedish perspectives on the American Economy
Tino Sanadji is a Kurd born in Sweden and is probably is free market as Mises. He is at the moment getting hs PhD in the US. Read his posts he has a lot of interesting facts about the US and Sweden. Most of them counterintutiive.
Another free market researcher from Sweden has written a research book on the subject your looking into. It’s in English. I found this link to Reason TV. Tino S and Andreas B are very good starts on your fact finding misson. You will be able to refute borh leftist and rightists.
May 12, 2010
In The Capitalist Welfare State, Lund University economist Andreas Bergh explains how Sweden has managed to increase economic productivity despite its large public sector.
Bergh says that despite popular mythology, Sweden is not a socialist success story but instead owes its economic growth to the lowered tax rates and deregulation of the early 1990s, which allowed innovation and investment to flourish. Bergh also discusses how Sweden’s national voucher program revitalized the country’s educational system and warns that Americans who are hoping to emulate Swedish success by growing the public sector are learning the wrong lessons from Sweden.
Produced by Ted Balaker and Daniel B. Klein; filmed by Jonathan Liberman and Henrik Devell; edited by Zach Weissmueller; with special thanks to Niclas Berggren, Martin Borgs, Nils Karlson, and the Ratio Institute .
Approximately 10 minutes long.
I have some sceptisism about Economic Freedom Indices (or is it Indexes), because there are so many things that are difficult to quantify. And there are many mistakes also.Buy RS Gold
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We don’t have Bernanke handling our monetary base so we are at some parts better off.
I figured I could take the liberty to post some - for this thread relevant, paragraphs - from a private conversation with another user at the community, who were interested in how things are going in Sweden. Nota bene, this is my own personal reflections about Sweden. And I’m also sorry, in beforehand, for any language errors and badly articulated answers, I’m not very used to write in english and my skills could be better (I’m, hoping to improve my english as I write here at the forums among other things). For instance, I noticed that I actually didn’t answer the whole question sometimes
How do people in Sweden tend to think about themselves? Are they generally proud and happy with their country as some people here would suggest? How do Swedes live materially?
Politically, Swedes think that we are world champions in benevolence and one of the richest nation on earth. I think that’s mostly due to the state-controlled educational system. We learn that the the labour movement togheter with the social democrats created the wealth by high taxes, workers rights et.c. And we still have those things, so why wouldn’t we still be one of the richest country on the world? We think that we are the best of taking care of each other, that we have very small differences in income, and that this is a safe place to live with very few social problems. Even though Stockholm has more homeless per capita than NY, we have the the highest criminality in the western world, 1% of the people owns almost 40% of the “wealth”, and that Wallenberg [The Wallenberg family, that indirectly owns a lot http://en.wikipedia.org/wiki/Wallenberg_family] alone control 30% of our GDP…
We’re also very pro-immigration, we let in 100 000 immigrants 2010 (gross immigration, around 70 000 net), and that number will probably increase for 2011, whereas other european contries don’t even come close to those numbers, wich helps to enhance the picture that we’re the greatest and most benevolent nation in the world.
It is interesting how the general swede pay very high taxes. If you earn a “gross” sallary on 30 000 kronor (slightly under 5000 USD), you have already paid 10 000 (about 1600 USD) in payroll tax. Then you pay 30% in income taxes, wich is 10 000 kr, and you have now paid 50% of your sallary in taxes. Here is where it gets really unpleasant, because you cannot buy anything without paying a 25 % VAT (consumption tax), 12,5% on food. So between 65-70% of your income goes into the governemts hand. So in disposable income, the average swede is pretty worse off and we still don’t have higher public consumption per capita than most other countries in Europe. Very many families has trouble making ends meet if something little unexpected happens, and 30% of the households here has no savings, or under 10 000kr (1600 USD).
As it is right now, people use their houses as a saving bank, to buy nice cars and build new things on their houses et.c. The house prices are at extreme levels. If you would ask Peter Schiff, there would be no doubt that we’re having a bubble, he would probably be surprised that it has reached this level, the housing prices went over CPI for over a decade ago, and has kept increased rapidly throughout the whole time.
How do most people in Sweden think about America?
As i mentioned, the political education about America is very adverse. People think that you have uncountable ghettos and that very many people work two full time jobs att the same time just to make ends meet, that 50 000 people don’t have access to health care, that you have the highest criminality in the world and shot each other with guns all the time, and that a wealthy class is sucking out the rest of the poeple. Sort of. But they like Obama, the swedish media is extremely anti-republican and pretty pro-Obama. I have never met anybody IRL who knows who Ron Paul. Everybody knows about Sarah Palin and George Bush though, and everybody really hate them.
So from what you know of the average middle class American would you say that his counterpart in Sweden is better or worse off?
I would say that the middle class american probably is better off (I don’t know very much about the peoples economy over there but I have a little insight, my brother lives with his wife in NY for instance, and I have studied some statistical comparisons), at least in terms of disposable income for detail consumption. Even the Central Organization for the Labor movements’ Unions (a big socialistic association basically, that donates 8kr - 1,30 usd - per capita to the Social democrats) has admitted that it’s indisputable that the living standard is higher in America than here. There has actually been some interesting research by economist here in sweden that proves this fact; if Sweden were to be a state in US, it would be the poorest, and the black people as an ethnic group has a higher average living standard than swedes as a ethnic group. I even think that some of this reports have been translated into english, I’ll try to find something if you’re interested in taking a look at some facts.
What is the healthcare system like in Sweden? How good is in actuality and how much do people trust it? In America healthcare quality is really good if you can get it, but it’s ridiculously expensive. Most democrats in America say that this is because of the free market, ignoring the fact that healthcare is one of the most tampered with industries in the United States, and they say that the best option is to copy the European systems.
I would say that it sometimes feels like a catastrophy, 3000 people die due to medical errors every year, that’s 8 people every day in a country with 9 000 000 people. The accessibility is a joke, people die in the lines and sometimes get treatment to late so they get injured for the rest of their lives.
The thing is: the main focus isn’t to give medical treatment to patients, the government don’t want to give medical treatment to anybody, the politicians budget is more important. America spends the most money on health care in the world (about 16% of GDP right?) whereas Sweden only spend about 9% of GDP. I read some article a while ago, written by a leftist who complained about the inefficiency of Americas system compared to the european contries, wich these numbers apparently should constitute some proof of. But the truth behind our cost effective health care can be shown with some examples from reality: The staff in some counties get bonuses on their sallary if they suceed to make people NOT come to the hospital when they call in to the tele-service and ask for medical advice. Between 1993-2007, the public health care organization decreased its staff with about 65 000 totally, in absolute numbers. People actually wait over 24h at the emergency department sometimes, and get medical treatment on the floor because the lack of capacity. The nurses are unhealthy stressed, and underpaid. It’s really hard to get the state-of-the-art (the most developed and expensive) equipment, people sometimes waits for a whole year, and the doctors always tries to avoid using it even if it’s necessary. For a couple of years ago (I think it was in 2009) a doctor sent the patients to the private-runned veterinary clinic to get access to state-of-the-art equipment.
The thing is: the beaurocrats controls the health care expenses, and they have to have a financial balance. The customers (the patients) don’t controll the costs and therefore they don’t control the health care provided to them, the power is in the hands of central planners. There is no link between the demand for health care, the peoples’ need, and the supply. There are to competing forces: more expensive technology and more population growth versus the beaurocrats desire to cut costs. The only real secured are the ones rich enough to buy a privat insurance at a private health care company, but most people aren’t willing to do that, because they expect to get something out of the extremely high taxes they pay. And when they get sick and for example want to buy medicine with their own money that the county won’t provide them (often they just give the patients medicine A because it’s the cheapest, even if medicine B is better but more expensive) they’re not allowed to do that, because it’s unfaire against those who don’t have enough money to do that, “buy a private insurance next time you anti-egalitarian fool” is the attitude.
What are the major political issues in Sweden? What are the two biggest parties and what do each one of them want to happen?
The biggest issue right now is the qeustion about income insurance. In Sweden, if you get too sick to work for a long period, you can notice the government and you get income replacement. 2009, the “rigt-wing” administration decided to make some reforms, because they thought that very many people cheated, and cashed out inceome replacement even when they were healthy enough to join the working force. So they decided that everybodey should be examined by medical proffesionals more carefully, and if one got estimated to be healthy enough the income raplecement get terminated. Nothing bad about the idea, I myself liked it. The problem started when the public insurance organization ruthlesly started to terminate peoples income replacements even if they actually were to sick to work, even against the opinion of the medical professionals. The leftist used this as a main election issue in the election we just had autumn 2010, and started to blame it on “neoliberalism” and the tax cuts that the right winged administrations has made (very modest tax cuts btw…). So we have a lot of sick people who aren’t able to work, but get no money from the government as the insurance program promise, in Sweden.
Another important issue is immigration. The election 2010, the Sweden Democrats (a socialconservative and nationalist party) got in to the Riksdag, or the parliament, with almost 6% of the votes (the limit to get in is 4%). This surprised a lot of people because most people think that SD is a extremist and racist party, wich probably is due to the established medias verbal crusade against the party. They have been completely victimized by almost the whole population, they have been exposed to much threats and physical violence, and people have arranged massive demonstrations against them (the day after the election day, about 5000 people demonstraded against them in Stockholm). SD wants to reduce the non-european immigration to 10% of the todays immigration, and obviously many people support that. We have hugh problems with criminality, wich SD has used as a main issue. For example, there are professional statistical estimates that 60 000 rapes are commited per year in Sweden, that’s 164 per day. More respectable estimates says around 30 000, but it’s still a lot - the trick is to find out how much hidden mubers there are, and not only look at the reported rapes wich 2009 was almost 6000, second most in the world.
What are disposable incomes like in Sweden? When I say that I mean what kinds of things do you buy? In America stores tend to be filled to the brim with cool electronic stuff like ipods and electronic cameras, something that I think a lot of Americans take for granted, there are huge amounts of tasty foods available and there is a growing market for healthier foods, which have been somewhat forgotten because of how bad the tastiest foods tend to be.
It sounds very much like your description of America, although I believe that the flow of technology and food is more massive over there. Most of the income are spended on food, gasoline (wich is very expensive here, around 2,50 usd/liter), amortization and rent on the house, food, clothes and such. The average houshold spend about 17% of it’s expenditures on “culture and entertainment”, what that accomodates I’m not sure, and I’m note sure how the number has been calculated.
There is some litterature about Sweden as well. The latest book I read was “Remaking America: Welcome to the Dark Side of the Welfare State” by Sven R Larson. He describes the problems we are facing in Sweden, in the context of the Obama-administration, very useful statistics and information about Sweden. I think that the average swede should read it also, and not only americans.
Link to the book: http://www.amazon.com/Remaking-America-ebook/dp/B00427YR0Q
I can’t come up with any more interesting books in english for the moment, but I’ll post my recomendations as I think of them.
Thanks, Johannes. Very informative.
Doug Casey’s take on Scandinavian Socialism:
But what do you say to people who point to places like Sweden – a highly government-regulated society that seems to work? Such a nice, clean place – with lots of government.
Doug: It’s a good point. Sweden is at the low end of the corruption scale, but it’s not because they have laws against corruption – everybody has those. It’s because of the culture – the peer pressure, moral opprobrium, and social approbation I mentioned earlier. Sweden is a small country where word of misdeeds spreads quickly. It has a highly homogeneous culture based on deep-rooted traditions, and there’s a high degree of consensus about how things should be. That makes Swedes cooperate with the large body of law that reflects that consensus, much more than would happen almost anywhere else – or is even possible anywhere else.
Out of a couple hundred countries in the world outside of Scandinavia, I can think of two other places that have a similarly powerful culture that makes a “big-government” approach to managing society seem to work: New Zealand and Uruguay. These places are small, relatively isolated, homogeneous, and with powerful cultural traditions that have – unfortunately – been codified into law. These countries, coincidentally, also have the three oldest socialist governments in the world, all dating back to the turn of the 20th century. Trying to bribe officials in these places – even Uruguay – is pretty much out of the question.
But these places are anomalous. Because of their rare characteristics, they can’t be held up as role models for other places. Almost everywhere else – where there’s more diversity of ethnicity, culture, much larger population, and so forth – Scandinavian socialism wouldn’t even have the appearance of working. And, I’d argue, it won’t work much longer in Scandinavia either; Sweden and these other places will ultimately collapse under the weight of their mass of laws and socialist intervention in their economies.
L: It’s interesting: these countries where a high degree of legal regulation seems to work are also highly homogeneous and have very powerful cultures – makes you wonder if the laws are really doing anything at all, or if they are just window dressing on more powerful social systems.
It makes me think of the many experimental societies tried out in the 19th century in the U.S., when there were still open frontiers to which one could escape with like-minded people and try to do things differently. Most were communes. And most were disasters. Some worked, and a few even still exist in vestigial form today, like the Amana colonies. Those that worked best were religious communes. Just goes to show that if you can go beyond homogeneity and get unanimity, you can create a society that seems to defy all experience to the contrary. When everyone buys in, amazing things can happen… at least for a while.
Doug: Almost anything can work for a while. Some monasteries approach an almost perfect state of communism. It’s possible because everyone there chooses to be there and live according to those rules. Unanimous consent. But that’s not possible in an entire country, and even the super-majority buy-in of highly homogeneous cultures like New Zealand and Scandinavia are not possible in 98% of the rest of the countries in the world. If you look at the rest of the world, the more socialistic and regulated the country, the more corrupt it tends to be. And the larger the country, the more disparate the population and divergent the mores, the less effective the government’s regulation.
L: That would cover China, Russia… Brazil, Mexico.
Doug: And Argentina, where I am now. The customs inspectors down here, for example, all expect to retire as multi-millionaires. That’s because they have so many laws on what you can export or import, how, when, why, it’s almost impossible to comply with – or even know – all the laws. It’s much cheaper and easier to get the inspector to look the other way with a well-placed envelope.
There’s good news and bad news in this.
In itself, corruption is a bad thing – it shouldn’t have to be necessary. As I touched on earlier, insofar as it’s necessary, it’s also a good thing. If we can’t eliminate the laws that give rise to corruption, it’s a good thing that it’s possible to circumvent these laws. The worst of all situations is to have a mass of strict, stultifying, economically suicidal laws – and also have strict, effective enforcement of those laws. If a culture doesn’t allow people to work around stupid laws, that culture’s doom is further sealed with every stupid law passed – which is pretty much all of them.
L: Strict laws, strictly enforced, is a recipe for paralysis. I’ve often said that while Mexico is much less free than the U.S. on paper, it is much more free in fact. People in the U.S. feartheir government, especially the IRS. In Mexico, people build what they want, eat what they want, sell what they want – tax-evasion is the national pastime.
Doug: Right. This is one of the reasons why, though I’ve lived in New Zealand quite a bit over the last ten years, I’m not really interested in hanging my spurs there any longer. Although it’s gotten vastly better since the reforms of the mid-‘80s, it’s still a dull, insular place with a lot of ingrained socialist attitudes – but not much corruption to help you obviate them. And I wouldn’t want to live in the Scandinavian countries either. They have all these incredibly stupid laws that sheep-like residents obey, enabling great tyranny – but it goes unrecognized because it has such popular support. It suits me much better to live in a place like Argentina, where there’s an equal number of stupid laws, but nobody pays any attention to them. And when there is a problem, it can most often be handled – informally.
L: I won’t ask you on the record if you’ve ever actually done that. Interesting comment about Scandinavia – I was just on Google News yesterday, and one of the top video news stories was a clip about some poor woman in Sweden who’s had her twin daughters taken away by the child protection busybodies. The children were taken – without notice – from their school, and the woman didn’t even know it was an official abduction until she got a letter a week later. The real horror of it is that there isn’t actually any evidence of wrongdoing on the woman’s part. The law is preemptive and protective – the bureaucrats are authorized to remove children from their families if there might be danger to them. No due process, and forget about “innocent until proven guilty.” The breathtaking assumption is that it’s better to rip children out of their families than to find out if there’s a real problem first. This could only hold sway in a place where the culture is one of great confidence in the wisdom and benevolence of the state.
Doug: Scandinavia is on a slippery slope. I wouldn’t be surprised if a very nasty “black swan” the size of a pterodactyl landed there. The U.S. isn’t far behind. Big Brother is coming out of the cellar, where he’s been chained up, in the U.S. And I’m afraid he’s so strong and nasty that few people will be able to pay him enough to leave them alone.
There have long been local pockets of notorious corruption in the U.S., of course: building inspectors, people like that. On a national level, the DEA became very corrupt early on – a natural consequence of “regulating” an industry that runs on billions in cash.
Other federal agencies are more subtly corrupt. Generals are paid off by being hired by defense contractors after they’re mustered out. FDA types are hired by the drug companies and large agribusinesses – and executives from those companies become high-level bureaucrats in the FDA. Politicians rarely take envelopes of cash any more. They wait until they’re out of office to collect millions in directors fees’, book deals, speaking tours, stock deals, and the like. Bill Clinton is a perfect example of someone who went from near penniless to a net worth of $50 million-plus overnight. The Clintons have made a huge leap from the days when Hillary had to take a $100,000 payoff in the guise of her totally transparent cattle trading scheme.
The problem now, though, is that there are giant police bureaucracies like the TSA and the FBI that have no direct way of getting paid off. So they enforce the idiotic laws like robots. Other bureaucracies like NSA do their damage remotely, too far from the victim to be negotiated with. This is a real source of danger.
Source: http://www.caseyresearch.com/cwc/doug-casey-make-corruption-your-friend-part-1?active-tab=archives
He is not really correct about New Zealand since I have lived in USA, New Zealand and Norway. To be honest New Zealand has a lot more in common with the USA than it does with Norway.
In Norway and Sweden they are largly homogenous and has always been largly homogenous. Now Sweden has about 94% white people and Norway got 96% white people. The immigrants in both countries aren’t doing very well.
Also, scandinavian countries are not more left-wing than other countries in Europe. France is more left-wing than any scandinavian country. Sweden was very left-wing, but they had to change. If they didn’t, their country would crack, Their country is still in huge problems, but that is mostly due to immigration.
Secondly New Zealand has never been truly homogenous, becase of maories who represent 10% of the population. But today it is not homogenous, white people only represent about 70% of the population. And it is a right wing country. The heritage index rank New Zealand as number 4. US is number 8. People’s opionions don’t tend to be left-wing either. At least in Auckland.
Also, I want to mention that New Zealand was a left-wing country, but it didn’t work out very well, and when Britan broke off trade with New Zealand, then the economy collapsed and they went right. Don’t expect Texas though.
I think Scandinavia is working better due to the culture, but also due to market reforms that has taken place. For instance if you look at scandinavian countries, you will see that many sectors are in competition. Students can pick High School, something you can’t in the US. The pension age is normally between 62 and 67. Compare that with France. Also it is easier to fire people in Scandinavia, especially Denmark than it is in many European countries. They got high taxes, but so do other European countries such as France and Belgium.
People tend to think that Scandinavians are more left wing than rest of Europe, but they are not. So why would you expect them to perform worse. Secondly, they got a better culture and they are homogenous. However, they are making themselves non-homogenous and most of them don’t realize that they are desroying their competitive advantage. The reason they dont realize this is due to nice-ism where you rather look at what is nice and humane instead of the consequences. This is especially a problem in Sweden which has seen it’s violent crime rate increase by 300% the last 30 years.