I drove past the Swedish Police academy outside stockholm today, it had multiple large signs on it’s fence saying “Protected by G4S”.
If this wasn’t a monarchy i’d swear i was living in a banana republic, or raindeer republic since we’re up north.
There seems to be agreement here that the high GDP figures of Scandinavia are misleading, since purchasing power is a lot lower so they’re getting a lot less for the same money. But I wondered, in a globalized economy, wouldn’t exporters ship their products to where they can get most for them? Meaning high prices in Scandinavia would lead to imports driving down prices until they are on the level of the rest of the world. How can it be, besides taxes, that a region has higher prices?
That’s why we use GDP (PPP) per capita and Scandinavia still does better than the rest of Europe.
If you believe Scandinavia is the most left wing country in the world, then you are going to have a problem, because Scandinavia is pretty successful. Scandinavian countries are the most successful countries that has tried to implement the social democratic model. Since they are more successful, then they are able to provide more welfare. Welfare in communist China was way worse than welfare in the US, but there isn’t doubt about which country is more left-wing. Scandinavian countries are more right-wing than many countries in Europe and there is no reason why Scandinavia should perform worse than the rest of Europe.
So what is the reason Scandinavia has a higher values currency? Because their exports are very strong. To compensate for that, the market will increase the currency. This will make exports more expensive and imports cheaper and restore the trade balance. But why don’t they move to a cheaper country. Some products can’t move. You can’t move minerals and oil. Other products are very dependant on a good infrastructure and will not leave. Thirdly, some companies feel loyalty to their home country and won’t move, but if they can’t compete then they will collapse. For instance SAAB.
I wouldn’t live in Scandinavia. Not because the standard of living is terrible, or I would feel oppressed. But I don’t like the people in Scandinavia and their intolerance towards people with different opinions and values. Secondly, they are sheep and it is very hard to be different in any way. Not just politically, but socially as well. And at last, they face huge challanges in the future, especially Sweden due to failed migration policies. However, it is not political correct to bring real problems up. It is okay to criticise Scandinavian countries in something they are good at, such as enviroment. But it is considered unpatriotic to bring real problems up, because every Scandinavians are supposed to think they live in a country with no real problems.
Sounds like everywhere to me.
This is my understanding as well. There is some anecdotal proof that corruption in Sweden is much worse than people think.
The reason that Sweden seem to be a very non-curropted country is because swedes ignore curruption, they strongly(!) believe that the institutions here are benevolent and therefore they are to timid to admit that corruption actually takes place. This is a plausible explanation, because there is a psychological cost to change ones world view in favor of reality, especially if reality is more unpleasant than you think. The judiciary doesn’t set much resources to deal with corruption either, probably because they don’t think it’s a problem here.
That makes some sense Johannes. Corruption indexes usually gauge how people perceive how corrupt their governments are IIRC
"This group is for health proffessionals, patients and the public, that somehow thinks that the health care system in Sweden no longer manage to bear itself!
Money and the budget has been allowed to become the beacon in an operation where the patient more than often get neglected and the staff gets owerworked.
Once and for all, we are togheter put down the foot. We are saying NO to downsizing and will push this question untill we, with a common voice, force the politicians to their knees.
This is not a temporary protest but a lengthy fight against the whole system [my emphasis], and we are not finished until a BAN against cuts is implemented and protected by the law.
Share your stories, invite your loved ones, your friends and colleagues. If we only hang in and don’t give up, we together will build the health care system into a safe and functionate operation with the patients back in focus!"
This is my loose translation of the information in this Facebook-group: http://www.facebook.com/home.php?sk=group_169147426472288&ap=1
I am very positive about this demonstration, and I hope that some people will find their intellectual way to consider privatizing health care (they probably won’t because the leftists use this to critizise the “privatizations” of hospitals, the politicians has privatized the running of many hospitals). The group is created by a medical doctor who complaines about the fact that he no longer can ensure the patients safety in this system, and people in the group share their thoughts and anecdotes about this public scheme that put the politicians interests before the patients. The public-financed health care here is a catastrophy.
I urge you all to read this important blog post wich deals with the main problem in the swedish health care. It raises some reality examples of the failure of socialism, that should terrify any adherent of Obamacare: http://thecoldvoiceofreason.blogspot.com/2011/06/right-to-wait.html
Here is a taste:
A woman from northern Sweden died after four calls placed over a four day period requesting to have an ambulance sent to her home in Timrå were ignored.
“She was having trouble breathing. She was instructed to call the healthcare information hotline and there they thought she sounded irritated,” the young woman’s mother told the local Sundsvalls Tidningen.
Following her daughter’s death, the mother has had the transcripts of her daughter’s conversations with emergency service operator SOS Alarm read to her.
The mother told the newspaper that healthcare representatives have since told her that her daughter’s first call for an ambulance was denied because she “was still communicating verbally”.
“That’s totally insane. If you can’t communicate verbally, you can’t call for an ambulance anyway,” another close relative told the newspaper.
Of course, this is not an isolated case, this is an everyday-example in swedish health care. As I have written above in this thread, there are examples when the staff in the tele-medicine service get bonuses if the suceed to make people NOT come to the hospitals. It’s cheaper for the government to hand out bonuses than give people the medical attention they need…
BTW, the other day, our politicians decided that we from now on should gurantee all illegal immigrants health care. Sven Larson reports in english:
But the mistakes that Sweden’s political elite have turned into their very own religion has not stopped at replacing an entire generation of educated and culturally skilled Swedes with immigrants from the rural corners of Africa’s Horn. The most recent contribution is likely to turn the country into an economic swamp of poverty and social disintegration. Mr. Goran Hagglund, minister of social affairs and responsible for Sweden’s socialized health care system, announced yesterday that the government will remove the last restrictions on who the tax-paid hospitals can offer health care. The purported purpose is to allow illegal immigrants to access health care on the same terms as lawful, tax-paying residents.
It is easy to see what this is going to lead to. Sweden already has one of the most heavily rationed health care systems in the industrialized world. Waiting lists for elective surgery are extremely long, the number of beds per 1,000 residents is even lower than in Albania, and the death rate from curable conditions due to health care rationing are appalling. Even a marginal increase in demand for health care as a result of this free-for-all opening of the health care system, will be the straw that breaks the camel’s back.
Didn’t all of the Scandinavian countries let their banks fail during the financial crisis about 2 decades ago, while we have George Bush and the Fed intervening with trillions in American taxpayer money to nationalize the banks? John Allison of BB&T bank and prominent laissez-faire capitalist said that they were forced into TARP and from then on the government had a leash around their necks. And then the auto industry? Hell, the bulk of the housing industry in America is nationalized too. So what if there are prices when 80 cents of every dollar comes from a GSE?
Even Chavez didn’t nationalize the banks. He pointed out that Bush it outnationalizing the socialist himself.
The Heritage Index rates Denmark as freer than the USA.
There was a lot of discussion about Norway on the last page. Let’s compare Norway and Alberta since they are very similar in a lot of ways, but Norway is known for being a bit more repressive with its tax structure than Alberta.
Both are very rural cold places with generous oil reserves and socialized health care. Alberta is even more widespread and less dense in population than Norway. Alberta has 3,720,946 people with a population density of 5.76 people per square km. Norway has a population of 4,939,655 with about 13 people per square km.
Alberta also has a type of soveriegn wealth fund called the Alberta Heritage Savings Trust Fund. Socialist rejects from British Columbia and Newfoundland all come to work in Fort MacMurray (often called Fort McMoney) to earn 110k per year in their first year as an unskilled labourer. And as the poster on the previous page said, many Swedes come to work in Norway.
Like many of the Scandinavian countries, a voucher system exists for education in Alberta. Albertan schools always lift Canada up the international rankings for standardized test scores, and if Alberta were treated like a country in such rankings it is ahead of the Scandinavian countries and Hong Kong, Singapore, and South Korea in most areas (although not all) while spending a fraction of the time in school compared to Koreans.
I imagine the gdp per capita numbers for Alberta will work out to about $95,000 per person for 2011. This is a bit ahead of Norway, but not by too much. One of the downsides of being in Alberta is that Albertans live in a system of strong federal government in which the government redistributes transfer payments to poorer provinces. So Alberta pays to support the unemployed East Coasters. Norway does not have to do that because they have an independent nation. Alberta’s provincial tax scheme is a flat income tax at 11%, I believe.
Alberta is time and again the place where young hard working boys come to work a few years to save up and provide a comfortable life for themselves. My friends flew back from Alberta for a week. They have passed 1.5 years of work out there as heavy duty mechanics. One makes a bit over $200,000 per year taking a lot of overtime, the other takes no overtime and makes $170,000 per year as a young man. They were home to invest in some property and houses and they buy dividend yielding equities in Canadian resource securities as well. Canada has fairly low capital gains taxes and dividend taxes, and one can avoid capital gains taxes altogether when selling a home in which they’ve lived for a year.
Many millionaires have been made in Alberta, and not just businessmen and entrepreneur types. A lot of working men on wages are millionaires.
I just started a blog about Sweden, if you’re interested! I give comments on issues from my perspective of liberty.
Great initiative, Johannes. Looking forward to commentary on economic issues in Sweden.
(Just make sure you stick to all the English conventions of capitalisation!)
Thanks! All corrections are welcome. I’m partly writing to develop my language skills. 
How Welfare made the economy sick by Gunnar Viby Mogensen. Part of a 3 part series.
Mr. Mogensen has done a lot of research concerning the welfare state in Denmark, and conludes in the series that the current system is unsustainable and cannot possibly grow, and requires serious reform. He is afraid that absent reform, eventually it will be carried out externally by bankers.
What is interesting is that Mogensen has been a social historian for 35 years, retired back in 2003 and now for the first time he is openly commenting on the future of the welfare state. Always nice when someone from the mainstream (appears to be anyway) reaches similar conclusions as our own.
I am currently working on the topic of organizational culture in Scandinavian countries for my MBA topic, and I should say I am happy to see that some people are able to understand that Scandinavian model is overrated. However, numbers does not tell everything. I would not expect any subjectivity from Scandinavians, as each of us at certain limit defends his/hers homeland. You can say I am rude, but many Scandinavians are brainswashed about their perfect “world”. For the outsider,s that operate only with numbers, I would say it is not enough. Sometimes things from distance look much better. I moved to Denmark five years ago and I am working for one of the biggest Nordic companies. I speak fluently Danish and every single day I spend with my Danish colleagues. Some companies are international geographically, but not mentality wise. After 5 years I am still in shock, how we think differently. If Animal Farm written by George Orwell was not about Stalinism, then I would say it is the mentality you have it in Scandinavia, just it is called Jante Law. The term refers to the mentality which refuses to acknowledge individual achievements and emphasizes the collective effort by criticizing achiever’s succes as inappropriate. While reading Danish newspapers and listening to the debates on their TV, you see, how they love to count others money and if they could, they would take away everything from the rich. Nobody cares that the “rich” had to take education (some couple of degrees), work 14 hours at least per day for years to build something. So I do not agree, when you say that they are not so leftist as they pretend to be. I have experienced life in former Soviet Union, but the Scandinavian socialism is much more radical. Equalization in Scandinavia is extreme. And luckely some of Scandinavians start seeing that current development of the events in the society are more and more restricting than liberating. I do not believe in “Scandinavian miracle” and would dare to say that in 10 years they won’t be so pround about this model.
@A.L.Pruitt: Good material!
Hello
I am from Norway, I havent really looked through the thread and the arguments I am concentrating on will perhaps already have been refuted. I was actually just looking for any journal articles on Norway.
“though Norway’s GDP per capita seems to be boosted by huge oil and natural gas production, do Norwegians actually enjoy higher living standards than Americans? I dare say that they don’t.”
Its important to note that most of the oil revenue is put into a fund that almost exclusively invests outside of Norway, and only the return on these investments are used by the government. A note is also that Oil fund is horrible managed and has lost billions of dollars, and are even still hugely invested in government debt(US, UK, Spain, EU etc) and Western stock indexes.
In addition the public almost only gets high government expenditure from these oil revenues.
The keynesian-establishment economists claim that allowing norwegians to dispose of the funds themselves would create “inflation”, which is total nonsense.
Furthermore the so-called “mainland” GDP of Norway is mainly the oil and tax-funded welfare state wasting resources and giving out LARGE sums as “unemployment insurance” and especially disease benefits leading up to 750 000 able bodied people(over 18) being on the dole out of a total(including underage etc) population of 4,9 million. These benefits are then used to consume imported goods leading to a huge consumer economy, crowding out production.
The original poster is correct in claiming Norwegians do not enjoy a higher standard of living, at least not pre-housing bubble US. In fact the large scale welfare state, with its a high taxes, regulations and distortions(getting lots of other business into production of things for the state) have led to an almost mass exodus year after year, of the most talented young, productive people and only immigration has masked the horrific effects of this.
The welfare state has also led to a very cold and inhumane society, where old and diseased people are ignored and often die because of lack of care and a very non-chalant moral atmosphere. I am not by this saying the norwegian public is totally corrupted, there are many moral and honest people but almost all have to some degree become colder because of the materialist nature of the welfare state. This doesnt show up in statistics but is the single most often complaint against Norway by foreigners either they are tourists or immigrants.
Some mentioned that Norway was “the first to get out of the financial crisis”.
It is somewhat disheartening to hear that on this very forum. My first counterpoint would be: “By what measure ?”
Sure, the unemployment rate has not risen and sunk very little. But the influx of people on sick benefits and other programs exccept for unemployment insurance is not counted, and the sick benefits pay the most and is what people are flooding to.
GDP has also grown, but by very little.
What is more is that the housing bubble has not been allowed to pop and has grown a lot, the high real estate prices are leading to virulent calls for socialization of housing prices and is in itself a serious social problem.
Public debt was doubled overnight to swap with the banks for their bad investments, leading to a much higher moral hazard. It is now at around 40 % of GDP.
Private debt has been growing at a major rate, and the interest rate has been kept at 0 or negative real rates to keep the bubble from imploding. Probably around 360 % of GDP, if included local government debt(which is a very small portion).
The interest rate has been kept so low that, to ease further the norwegian central bank has uttered an intention to follow BoE and FED with its own QE-program.
All is not well in Scandinavia.
Im calling BS. Norway has a gdp of 100k per capita, while US is under 50k, theres no way US has higher standard of living now matter how you twist the nmbers or cost of living. And unemployment of 3%, so your dole numbers are fake first of all. Also the exodus you are talking about is a joke. Sure some locals may want to emigrate, but if you look at europe and other nordic countries Norway is the #1 place to go to, everyone knows that.
You have to factor in how tiny Norway is, 5 million people, while the US is over 300 million people. It’s not really meaningful to compare those on a per capita basis. Most rich countries are small. In fact, out of 100 people living in a top-10 per capita GDP country, 93 live in the US. That should give you a picture of how tiny those places are. If you have a dozen small countries, some do well and some don’t, and you can pick the one that works. But the US is the average of 60 Norways, so there’s nowhere to pick from. On average the US has a higher per capita GDP than Europe, and especially than “socialist countries” on average, and there are about a dozen US states with a higher per capita GDP than Norway. So really we’re just dealing with a skewed sample here. I certainly never hear socialists mention Mozambique.
Also, it was mentioned a bunch of times in this thread how the US isn’t really less socialist measured by government spending and meddling. The difference, the reason that Norway “works”, is that it has a bunch of oil revenue to buy goodies from. Basically, Scandinavian countries are resource extraction companies that distribute the profits to their shareholders in the form of government schooling and welfare. These free goodies are often confused with the free lunch of socialism, but economists know that there is no free lunch. You can’t copy that model to the rest of the world, if the US wanted to export that much oil per capita, it would have to export a few times the entire world consumption.
That is exactly how it should be portrayed. Norway is just a capitalist energy firm monopolizing resources to exploit the rest of humanity. As is Alberta. Like Norway, taxes are essentially low in Alberta because they just suck the royalties out of the energy sector. Even with twice the GDP per capita of Ontario to leech from it still runs a provincial deficit.