April 27, 2014

Sweden a Model For....What?

Confronted with their spotty resume of roughly 80 million dead innocents under collectivist regimes in the 20th Century, leftists seem to reflexively resort to the example of Sweden when challenged to put forth an example of a well-functioning socialist state in the history of...ever. The problem for them is that while they weren't looking, Sweden has become a model all right, but rather one of privatization, lower taxes, deregulation, school choice and pension reform. We should be so right-wing in America.

Obama and the Democrats insist on directing the U.S. toward a European ideal of the social democratic welfare state from which Europe itself has been in retreat for several years...electing more conservative political leadership, bucking the EU, and otherwise beginning to come to grips with the unsustainability of it all.

Sweden leads the reform movement, and is becoming a different kind of model for the rest of Europe. Their successes should be held up as examples by American conservatives because it's now easy to turn the "Look at Sweden" argument against a Democratic Party that is bereft of ideas beyond name-calling. Consider...

Sweden's turnabout has been in the making for two decades now, and a partial listing of accomplishments reads like an American free-market advocate's (if not always Republican) agenda.

The Swedes have deregulated their market for electricity, and allow private competition in distribution markets and private foreign ownership in generation facilities, including nuclear plants. As this 2007 summary details further, markets including telecommunications, postal service and public transportation have also been deregulated.

The Swedes have implemented a school voucher system allowing parents broadly based school choice. They have moved toward privatization of the retirement pension system, allowing individuals to make their own investment decisions. The Swedish healthcare system has been increasingly privatized.

Income taxes have been cut, wealth taxes eliminated. Farm subsidies were abolished for a time, before EU membership forced them to re-regulate. Corporate tax rates are low by U.S. standards, and there are few restriction on foreign trade, and relatively few obstacles to business creation. The results have been economic growth averaging about 4% in recent years, more twice the growth rate of our own sluggish recovery.

How much we can learn from a country with a population just 3% the size of ours, and one more homogeneous culturally and ethnically than the U.S., is a matter for good faith debate. But by all means, conservatives should encourage people to look at Sweden...and to take note that it is conservatives who for years have been advocating similar reforms.

UPDATE 10/22/15:

It's no surprise that Socialist/Democratic presidential candidate Bernie Sanders thinks we can learn a great deal from Scandinavian countries like Sweden and Denmark, and his statements in recent days have prompted a spate of reality therapy sessions for the gentleman from Vermont. He's right...just not in the way he thinks.

Hot Air's Taylor Millard says Sander's contention that "Sweden's model works" is true only in the sense that the necessary free market reforms they have implemented have turned that model around since the 90's. Several good links to click on there. And Sweden is far from out of the woods, says Ingrid Carlqvist at the Gatestone Institute site, due to the tremendous burden put on the welfare state by the crush of new immigrants that much of Europe is going through.

Bernie loves Denmark too, because he apparently hasn't looked up from his government job in the last few years to see what's going on there either. Two recent Corner posts from Kevin Williamson get to the heart of it, starting with "Something's Awesome in Denmark"

Bernie Sanders's Denmark love is another reminder that our Democratic friends, who imagine themselves to be worldly cosmopolitans more at ease with sophisticated European ways, don't actually know a damned thing about what's going on overseas.

For those of you who are keeping score, the Heritage Foundation, which literally keeps score, rates Denmark's economy as slightly more free - slightly more capitalistic -- than that of the United States. Denmark is in a rough spot just lately, but it has been undergoing a series of deep and intelligent reforms to its welfare state (as have many of the other Northern European countries) to counteract the ill effects of earlier excesses.

Its corporate-income tax is much lower than that of the United States. Its regulatory environment is in many ways more free. It is very free-trade oriented.

What Denmark does have -- what all the Nordic countries have -- is relatively high taxes on the middle class, which gets double-whammied with income taxes and a value-added tax. Is that what Sanders et al. are proposing for the United States, to make it more Danish? A big, heavy tax increase on the middle class? Maybe it should be -- the Danes have a big welfare state and they pay for it - but no Democrat walking this Earth has the intellectual honesty to say as much.

Strong property rights, low corruption, openness to trade and investment, low public debt: Bring it on.

More here from Williamson on Sanders debate remarks...

Posted by dan at April 27, 2014 5:07 PM