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But It Works in Sweden…

By Nicholas Snow
Published: 15 April 2010

The world is full of myths which, if followed, will do great harm. One such myth is the seeming success of socialist policies in the country of Sweden. This myth has been around a long time–in fact, it is the Cliché of Socialism Number 66.

Dean Russell tackled this cliché by discussing Sweden’s much acclaimed state housing projects. Russell admitted the system did indeed look good and upon his visit to the country, since he was “a reasonably honest person,” gave credit to the housing situation. But upon closer inspection things were not so dandy. The government control of housing created a shortage and those waiting for government housing could end up on a waiting list for ten years! And it got worse, since private housing was non-existent due to the incentives the system created. So Russell stuck with his original hypothesis that government cannot outperform the market.

Russell uses only this one example, but what about other areas? Today the health care issue is all the rage and Sweden (along with England and Canada, which all have different types of state-run systems) is counted as a rousing success. But again, a closer look into all the consequences, including the long-run effects, is necessary. Horror stories, like patients being forced to wait for months despite being in pain, abound. The system also forces patients to attend extremely understaffed local clinics. These are just a few of the problems.

Supporters of the recently passed Obamacare should seriously analyze the bill as Bastiat suggests all good economists should, by seeing the seen and the unseen effects. This means looking at all groups and in the long-run. It’s not that free market advocates are heartless in opposing free health care for all, it’s that we are “reasonably honest people” who analyze the issue by looking at all the consequences and find that state run health care will make us all worse off in the long-run, particularly those who will need it most. The US health care system has its problems, but they are due to too much regulation, not too little.

What long-run consequences do you see from Obamacare?

Download Clichés of Socialism 66 here.

5 Comments »

I met a Swedish student at an IHS conference who said the anti-immigration sentiment in Sweden, due to the increase in the quantity of social services demanded by immigrants, has not only essentially closed the borders in recent years but resulted in violence and hostility toward immigrant citizens. Racial hatred is not exactly the foundation of a civilized society. This is just his account as a citizen, but I’m inclined to believe him, and immigration policy can dominate political discussion during election cycles.

The anti-immigration sentiment harms Sweden in many ways. Much of their growth in the post-WW2 period can be attributed to permissive immigration policies that filled out their workforce. They gained a reputation for being one of the foremost receivers of refugees and asylum-seekers. Now they not only deny asylum requests but they are deporting families. These actions have brought them scrutiny from human rights organizations such as the Red Cross.

The high tax burden and restrictive immigration policy can also explain their relatively slow rate of economic growth. Anyone declaring Sweden to be a “success” is, as you point out, taking a very short-sighted and simplistic view of policy effects. Yes, people in Sweden are rich enough to afford this and still have a high standard of living, but they are shooting themselves in the foot.

//Zac Gochenour
15 April 2010 at 5:57 pm

I know a woman named Karin Wahlstrom who came to my family in 1970 as she lives in Stockholm. As a friend I visited her in August 1973. We had a pleasant time but there was one thing wrong – the rental car I had was a gold VW sedan as I knew the car make was approved by Adolf Hitler as Dad told me. I wrote to her for many years and said that socialism wasn’t right for her country. I told a man from Sweden at FEE some years back to adopt free market capitalism.
Astrid Lundgren writer of popular books paid 102% of her income in taxes as I found out.
Reading The New American published by The John Birch Society, I found out that the Swedish people are protesting their government.

//Peter F. Steele
21 April 2010 at 12:09 pm

wut the hell is wrong with driving volkswagons? who cares if hitler helped create the company! go john burch!

//kevin
21 April 2010 at 6:25 pm

There are many things in Sweden that could be better (is there any country in the world that is perfect)? When you bring up things that are wrong with a place or country, try to use fairly recent information (the internet exist). Don’t cite events that are 40-50 years old, it is like saying that everybody in the US has to sit in lines for hours to get gas, which was the case a few times in the 70’s during the oil embargo.

There are many things that should be different, taxes are too high, subsides are too high and several other things as well. But it all depends on what a country does with their capital. I am not saying that Sweden is doing the right thing, just look at the election promise from two out of the political parties who promise to raise taxes on the working people and raise subsides for the people that are not working.

But back to the issue at hand, when making an argument (and to avoid sounding like a dinosaur) use current and relevant information.

//Daniel
3 May 2010 at 10:55 am

Kevin, I agree with you that making an issue of Volkswagen today is kicking a dead horse, but it is also true that the Swedes backed Hitler at the time of his rise, in the 1930s. Officially they were neutral but their leading intellectuals, such as the socialist economist Gunnar Myrdal, who later won a Nobel Prize in economics for his work on US racism (“An American Dilemma”), were open supporters of Hitler and the Nazis, as were many if not the majority of Swedes. This is not surprising because the Nazi economy was largely designed in the same way as the Swedish. The Swedish national socialist system is scarcely different from the national socialism of Hitler. So Peter Steele was onto something. Recall that he is writing about the early 1970s, just over a quarter century after Hitler’s fall. This is seen as well in Zac’s comment that Swedish socialism has resulted in the end in anti-immigrant racism. Not very surprising because a system that assumes a fixed pie leads to conflict over that pie, and racism soon follows. My question is: why on earth would anyone consider the Swedes’ and Norwegians’ bestowal of a Nobel Peace Prize given the Swedish history to be anything more than a bad joke?

//Mitchell Langbert
3 May 2010 at 11:02 am