I cannot reitterate that my discussion here is not against capitalism. It is against the idea that the free market will govern us any better than any other system run by the same corrupt, unsympathetic, self-righteous humans. Im trying to say to you that I agree with you, except that I think we need a well thought out system of governance with numerous checks and balances to power; everchanging and evolving to fix problems that were unforseen. Regardless of wether a “state” does that or not, I find it neccesary.
You can’t be that dumb can you ? There’s no such thing as check and balances. The different sects within the government cooperate in order to gain power over their subjects.
GDP growth in Sweden was on average one percentage point below the OECD average (1.7 compared to 2.7 percent a year) and growth in GDP per capita was 0.6 percentage points below the OECD average. In 1970 Sweden had the fourth-highest per capita income level in the OECD. By 1990, the Swedish income level was tied at ninth position in the OECD, even though 1990 was an extreme boom year in Sweden with an unemployment rate of 1.5 percent. By 1998 the Swedish income level had fallen to a tie for eighteenth position among the OECD countries. The comparability with other rich OECD countries increases if we exclude the two developing countries Mexico and Turkey (plus the most recent members: Poland, South Korea, Hungary,). [2] In such a comparison, Swedish PPP-adjusted per capita income had fallen to 6 percent below the OECD average already in 1990, when the economy went through the last stage of an unsustainable boom. In 1998 Swedish per capita income was 15 percent below the average for the twenty-three richest OECD countries. In summary, the data presented here distinctly show that Swedish economic growth has been below the OECD average since 1970. The accumulated effect of the slower growth rate is large. From 1970 to 1998, fifteen countries (“natural experiments,” to use Korpi’s terminology) surpassed or caught up with Sweden in terms of GDP per capita, while Sweden did not overtake a single one. Given this stagnant growth, Sweden can only see further relative declines in their standard of living, compared to the rest of the developed world. If average GDP declines by only 1%, for an extended period of time, it compounds, and has very profound effects. The statistics come from Mangus Henrekson, a professor at the Stockholm school of economics. Sweden’s GDP decline is currently at 9.3-10%, the information is hazy due to the opaque nature of Swedish statistics. This number is far below the projected 6.2% decline expected.
Only if they have a false understanding of what socialism actually is, as you have pointed out neither Denmark or Sweden are socialist countries. What they are, however, are fine examples of mixed economies. On the one hand the government takes a large slice of the average working persons wage to provide services, but on the other hand the bulk of buisness in Sweden is private.
US the Sweden of the 1970s? A rematch between responsible liberalism vs social democracy
In the US we are now seeing the debate that Sweden had in the 1970’s. Should you have a Big Government, statist state or should you keep the system as it is but put into place legislative frameworks for the citizens to make their own choices within these frameworks or should you take away choice altogether because a small minority cannot make rational choices?
I am extremely disturbed that the US seems to be going the way of Sweden in the1970’s. It led to disaster from a point of economic power and prosperity but also for individual liberty. In Sweden there used to be a saying that Sweden have a capitalist economic system for corporations but have socialized the individual. It was before 1990 a near perfect corporatist state.
Up until 1968 the political opposition in Sweden, mainly Folkpartiet, the Responsible Liberal Party, had been in fierce opposition to socializing polices. However the SocialDemocrats changed tactics and abandoned pure socialism to what Nobel Laureate and party leader Bertil Ohlin called “central directive and regulation socialism”.
During the student and worker uprising of 1968, intellectuals became infatuated with Maoism, all parties en Sweden became radicalized and the opposition against socializing policies and corporatism stopped. Sweden’s decline started, taxes were raised by 50 % overnight and the Public Sector tripled in size.
Sweden was in 1970 the world’s third strongest economy and declined to the 17th, our welfare system could not be sustained because of lower growth the lead to lower tax revenues than calculated. Entrepreneurs and venture capital had been run out of the country because of the extreme, punitive tax system and the constant attention of the Swedish Tax Authorities. In fact tax evasion and avoidance had become a national pastime for all and the Shadow Economy sector prospered.
By the 90’s and small and medium sized business owners had all but been eradicated, as result Sweden still has least small and medium sized business owners in all of the developed countries (OECD). Not only that in Sweden because of the corporatist polices of strong interaction between labor and large corporations and government not one single new job has been created in the Private Sector, all new jobs were created in the Public Sector.
So should the US steer the course that Sweden did 1970-1992 semi-socialized statism, massive intervention as well as high taxes or should we adopt polices Sweden applied after its banking sectors financial meltdown in 1990-1992 and that lead to the Swedish model being the envy of most US liberals i.e. tax cuts, deregulation and abandoning the corporatist model of cooperation between labor and large corporations ?
From Bertil Ohlin’s Memoirs “Socialistisk skordetid kom bort”(”The Socialists crop was never harvested”) 1940-1951 Bonniers 1975.
Bertil Ohlin was not only a party leader but also a professor of Economics as well as Nobel Laureate. He won the prize for the Heckscher-Ohlin theorem.. He was the founder of The Stockholm School of Economics a forerunner to Keynes.
In particular, responsible liberalism saw it as a danger to the liberty of its citizens the development of the growth of an increasingly centralized political power. The SocialDemocrats [Swedish Big Government statists,] were always adherents of such practices that increased the political influence.
Only when a very strong case could be presented could we in Folkpartiet [Swedish Responsible liberal party] agree to such measures. We preferred makings laws that put a framework in place and with full freedom within this
framework. The SocialDemocrats always wanted to increase what they called “the Societies influence” and minimized the individual’s right to self-determination both in private as well as in business life. Instead of the old “nationalization policy, pure socialism” we now saw on the horizon the beginnings of a new “central directive and regulation socialism” [In the US called Statism] emerging which, however – it must be stressed – was strongly opposed by us and the other parties in opposition and only developed very slowly after1948.
Let me get this straight. What is this 9.3-10% GDP decline? That can’t be annual.
Denmark and Sweden are countries that suffer from lower growth due to a large welfare state, but make up for it with a nearly non-existent regulatory system.
Have any of you two fine gentlemen any practical experience from Denmark or Sweden, or have you just decided from some table, that things balance and that this is a pretty neat place?
There are AS economists in Sweden and Denmark that have written about this on mises.org.
Most people from the those places that have never been anywhere else just believe what they are taught in school: that they are better than everyone else. I’ve met many Swedes. They are always some degree of holier-than-thou.
The ones that have left are a different story.
Here is Yngwie Malmsteen’s take on Sweden in the 70’s.
Have you looked at the studies, statistics, and articles that I posted in the OP?
What he says about it being barren makes it seem rather similar to any of the infamous communist experiments. There’s always a lack entertainment. When you factor in that bias toward expansionary spending, it goes some way to explaining why they don’t fall apart as fast as we would expect.
Really? I’ve always regarded Norway the most successful Scandinavian nation…
If you do the simple math from oil production stats, Norway pumps 2/3 barrel of oil per day per person. Notwithstanding that, it’s a wreck.
Yes, I have…
All I’m saying is, that it must be wonderful to be able to sit in America or somewhere else in the world and decide, that Scandinavia is a pretty nice place.
In other words, I can’t stand desktop-intellectuals, who dosn’t have the slightest idea what they’re talking about!
Jacob, what is your point?
Without the oil, Norway would have developed other industries. So why subtract it from the equation, claiming Norway to be the least successful Scandinavian country when they’re out of debt and have the highest standard of living, income etc. in the region?
Yet with all your oil money do you have long red hot dogs?
That is the question.
I didn’t claim that. I’m claiming that oil windfall created the illusion that they have some magical formula. If I found a briefcase on the ground with a million dollars in it I would be called “lucky”.