A chilling wave of political violence is sweeping across Sweden. None of this makes it in to European or American mainstream media. This is a shame because the situation in Sweden is destabilizing rapidly. Here are some examples of what is going on right now.
On March 29 Dispatch International reported (with the website’s own rugged translation from Swedish):
It is 1 PM on Saturday 23 March, still a full hour yet until the Swedish Defence League (SDL) is to hold its support rally for a democratic and secular society with free expression. The leftist political partyVänsterpartiet stands perched at the statue of Swedish king Karl X, encouraging those assembled to give the demonstrators from nearby Möllevångstorget a warm welcome. They have barely unfolded their banner with the slogan ”No Breivik soldiers in our streets” before all hell breaks loose in Stortorget. As if on cue, one firecracker after another goes off, and the city squared is drowned in red/green Bengal flames, while the counter-demonstrators attack the riot fence, and with a deafening sound carry it 20-30 meters backwards. It is like being in a war zone, where one becomes worried about surviving it. Although hundreds of police officers are in the streets in order to ensure safety during the SDL rally, they seem taken by surprise. They have permitted the counter-demonstrators to walk up to the outer riot fence, and seem not to have imagined that the counter-demonstrators would turn violent a full hour before the object of their hate, the SDL, was to appear.
The SDL members allegedly had to be transported out of the area under heavy police protection. It was only a matter of good luck that the rioters did not use anything more powerful than large, noisy and smoke-generating fireworks. That said, such devices can be dangerous as they are, and it is impossible to understand that the Swedish police tolerate their use in public, especially in situations like this one.
Barely a month later, Dispatch International reporter Ingrid Carlqvist – one of Sweden’s most experienced investigative journalists and co-founder of Dispatch International – had a terrifying experience while trying to cover a political event in the southern university city of Lund:
For more than 30 years, I have been a tough reporter who never hesitated to go on an assignment, no matter what was. I take journalism very seriously and know that when the media no longer write about what goes on in society, no longer scrutinize those in power, then democracy is on the skids. This past Monday I encountered the end of my courage. Right in front of several police officers and ordinary citizens, I was hounded away from the gravel area in front of AF-Borgen in the Swedish city of Lund. Furious, masked and hateful “anti-racists” threatened me, pushed me around and forced me to leave the place. As photographer Roger Sahlström saw what was happening and caught one of the craziest attackers by his neck, two police officers finally reacted and came to our corner of the gravel area. But as soon as Roger let go of the demonstrator, they left again – leaving us to our fate. With a whole gang of spitting and extremely hateful gangsters in front of us, we were forced to give up. For the first time in my life, I left an assignment before it was complete. … The hatred, in particular the white hot unreasonable hatred, is what scares me. What kind of people are these? Where do they come from? What has happened to these young people who claim to be good ”anti-racists”, but behave as at any time they would throw themselves at me and tear me to shreds? Without hesitating. In spite of the presence of the police 20-30 meters away. But they do not see me. Or do they not care?
On May 1 the nationalist Party of the Swedes, with roots in Nazi movements, marched through the city of Jönköping. They were confronted by very aggressive activists, who made several serious attempts at penetrating police lines. Just like at the event in Malmö in March the activists threw fireworks and other objects at the participants in the march. The activists also set to cars on fire, one of which belonged to a high-ranking official of the Party of the Swedes. The following video gives a glimpse of what went on (go here for the original news report in Swedish). At about 0:35-0:40 two minor fireworks explosions can be heard, and at 0:52 a larger piece of fireworks can be seen burning on a side street. None of the fireworks reached the march, thanks only to aggressive barricading by riot police. However, in other news reports the police admit that their abilities to keep the activists from attaching the marchers were stretched to the limit:
Scenes like the ones in this video are now so common in Sweden that they don’t make national headlines unless a number of people are hospitalized as a result of the violence.
The violent events in the streets only scratch the surface of the political violence currently plaguing Swedish politics. Recently a former member of parliament for the Swedish Democrats, Mr. Erik Almqvist, decided to leave Sweden for fear of his own safety. Reports the Swedish website Avpixlat:
Former member of parliament for the Swedish Democrats, Erik Almqvist, announces that he is moving to Hungary. A main reason is that Almqvist is the subject of serious threats from hateful, violent leftist movements but is no longer eligible for personal protection from the parliamentary security service that he had while he was a member of parliament.
Mr. Almqvist’s party, the Swedish Democrats, is a patriotic party of the same brand as UKIP in Britain or FPÖ in Austria. It has nothing in common with the Nazi-rooted Party of the Swedes, except a skepticism toward immigration. However, while the Party of the Swedes are calling for ethnic cleansing in Sweden, the Swedish Democrats want to preserve Swedish culture and have a sensible level of immigration, tuned to what the country’s cultural, social and economic stability can absorb.
Ever since the Swedish Democrats made national headlines in 2006 by capturing many seats on city and county councils, their leading officials have been targeted by serious, politically driven and often very violent attacks. Officials of the Swedish Democrats have been assaulted in the public and at events organized by the party. National chairman Jimmie Åkesson admits to sleeping with a baseball bat next to his bed – despite the fact that he and many other party officials have bodyguards provided for them by the parliamentary security detail.
Many Swedish Democrat officials have also been attacked in their homes, including window smashing and arson attacks. One example is Mr. Ulf Prytz, precinct captain of the Swedish Democrats in the city of Ängelholm. On March 1 he was attacked in his own home. He was badly beaten, but recovers from the incident without permanent physical harm. However, in the weeks both before and after the assault Mr. Prytz has been the subject of various forms of threats and harassment. On May 1, two months after the assault in his home, Mr. Prytz once again finds himself on the receiving end of vicious violence, clearly related to his political activities:
A cabin belonging to Swedish Democrat official Ulf Prytz burned to the ground on Wednesday – one in a series of incidents directed against the Ängelholm politician this year. ‘It is terrifying and I am considering quitting politics altogether’ Ulf Prytz said the day after the fire. … There have been a lot of incidents, worse than what happened [on May 1]. Twelve difference incidents.
Due to the ongoing police investigation Mr. Prytz does not want to elaborate. We will, however, return to his case and other examples of political violence in Sweden. The situation is spinning out of control and it is no longer entirely certain that the country will be able to hold an entirely impartial national election in September next year. For the first time since parliamentary democracy came to Sweden there is a distinct possibility that political violence will compromise the integrity of the election.
The other day I reported on the crumbling retirement system in Sweden, where the national legislature may soon pass a reform to force everyone to work longer. The superficial motivation is that every other newborn is expected to reach the respectable age of 100, a statement that is quite a bit of demographic trickery in itself. The rise in life span in the Western world is actually flattening, which means that the most reasonable prediction is that there will be very small changes over the next century.
On top of that, the retirement system, which is based in part on a pay-as-you-go model and partly a tightly regulated private-accounts system, is performing poorly for two reasons: the high taxes in Sweden is stifling private-sector economic activity, which erodes revenues for the pay-go part; and decades of fiscal-policy mistakes and labor market regulations have effectively halted the rejuvenation of the Swedish business landscape. The corporate performance that lays the groundwork for the stock market is decreasingly profitable, as big, bureaucratic and rather low-productive manufacturing corporations dominate the Swedish stock market.
As a result, retired Swedes are seeing their standard of living decline over time, where their parents saw a decent, steady stream of retirement income.
Today we can report on another downtrodden side of the Swedish welfare state. From the Swedish daily newspaper Svenska Dagbladet (my translation; click link for google translation):
In its assessment of what medical drugs to subsidize, the Swedish government takes into account that retired citizens contribute less to the economy. The National Board of Dental and Medical Drug Subsidies claims that they are only following the law, but the National Organization of Retired People intends to look at a lawsuit over age discrimination.
Readers familiar with QALY can already now see what is coming.
Mr. Calle Waller, 75, from [the town of] Knivsta, says… ‘My first reaction was that I could not wrap my head around it. I paused and thought about it and got a distinct feeling that there was something wrong, they just can’t say this’. … Since nine years he is suffering from prostate cancer, and since the summer of 2012 in his capacity as the vice president of the Organization of Prostate Cancer Patients he has been trying to find out how [The National Board of Dental and Medical Drug Subsidies] reached its decision not to subsidize the drug Zytiga, which gives men beyond treatment more time.
In late 2012 The National Board of Dental and Medical Drug Subsidies notified the socialized Swedish health care system that it was going to subsidize a cheaper alternative, which has significantly more side effects and requires intravenous provision. A main reason for this decision is of course that the Swedish health care system is badly starved for resources and is under serious, constant cost-cutting pressure.
However, there is another important reason:
As part of the reasons for its decisions … the National Board states that the drug does not produce enough of an elevation in the quality of life and extended life span for the patients, compared to how much each Zytiga treatment costs taxpayers. But what really caught Mr. Waller’s attention was a statement hidden away toward the end of the report, explaining that a subsidy would be more expensive because the average patient, in this case 69 years old, cannot start working afterward. … ‘Indirect costs are added for this patient age group since production less consumption results in a deficit. As a result, extension of the life span for this age group results in higher costs to society.’
Translated into plain English, this means that the patients will be paying so little in taxes over the remaining years of their lives that they will never be able to repay government for the cost of their treatment.
What the Swedish National Board of Dental and Medical Drug Subsidies is doing may be entirely immoral, but it is definitely nothing new. The methodology they are applying is called Quality Adjusted Life Years, or QALY. It is an instrument that in the hands of health care bureaucrats becomes a sorting mechanism where the strong win and the weak lose. (For an in-depth explanation of QALY, click here.) Its practice, which every week kills scores of treatable patients in countries with socialized health care, fits with chilling logic into the principle of fiscal eugenics that is increasingly accepted and widely practiced in Europe’s welfare states.
Back to the Svenska Dagbladet story, where we now get to hear from the government:
Mr. Niklas Hedberg, director of the division of new medical drugs at the National Board of Dental and Medical Drug Subsidies, contends that this is a case of unfortunate wording, but that the Board is complying with existing law that requires them to take into consideration every consequence of a subsidy. ‘This is a very complex issue … our nation’s resources are limited and we are charged with making subsidy priorities. Existing law mandates that we shall consider all principles, and put medical drugs in the context of society as a whole.
A nice way of saying exactly what Mr. Waller above quoted the Board as saying, but in words that make everyone feel a lot better about discarding older patients on the grounds of their inability to pay enough taxes.
The newspaper reported on the consequences of subsidy cuts already in September (again my translation; click link for google translation):
At the Karolinska university hospital [in Stockholm] prostate cancer patients are forced to pay out of pocket for a medical drug costing SEK 30,000 per month [$4,500]. If not, they will get an alternative [drug] with more side effects, that must be distributed intravenously. … Patients get on average an extra four months when all other treatment methods have been exhausted. ‘The improvement does not last forever, but at least the patients get an extension of life without any noticeable side effects’ says Ms. Anna Laurell, senior physician at the Akademiska hospital in Uppsala.
It is this extension of life that bothers the government Board. If the patients would be able to back to work and pay a lot of taxes, it would be worth treating them. But in a welfare state in general, and a socialized health care system in particular, a taxpayer’s life is worth more than anyone else’s. Those who are unable to feed government by paying taxes will be discarded.
Fiscal eugenics, for short.
There is a mysterious obsession with Sweden among American libertarians. They superficially glance at some isolated piece of legislation and suggest America follow the Swedish example. Having grown up in Sweden, and having escaped its oppressive tax system, its depressing social collectivism and cultural mediocrity, I am baffled by these Swedeophiles. The country I left for good 14 years ago had deteriorated pretty badly already then, and things have not gotten better.
If anything, Sweden is a prime example of what happens when you go out of your way to try and save a welfare state that is sucking the life out of its host organism, the private sector. From deteriorating schools to a health care system in real crisis, Sweden serves only one meaningful role: as a scarecrow in the cornfields of big government, deterring the sane, common-sensical observer from ever setting his foot there.
In previous articles I have explained how Sweden’s “successful” welfare state, recently praised by The Economist, is little more than an attempt at selling welfare-state snake oil; I explained that young Swedes are not only unemployed by the masses, leaving the country in desperate pursuit of a life, but those who stay are stuck living with their parents at alarming rates; I have pointed to the explosive problem with mass immigration of welfare-dependent illiterates from the poorest corners of the Third World; how the Swedish police is literally capitulating before the onslaught of organized crime; I have asked why such friends of liberty as Freedom Works are so appreciative of the grotesquely big Swedish welfare state, and I dispelled the myth that the Swedish treasury secretary, Anders Borg, is some kind of low-tax crusader.
In fact, On February 13 Mr. Borg explained in a tax policy debate in the Swedish parliament that he opposed flat income taxes and favors a steeply marginal, multi-bracket income tax code because, he said, it is an important income redistribution instrument.
In other words, Sweden is still the full-fledged, “democratic” socialist welfare state it has been since the 1970s. The fact that the treasury secretary has a pony tail and knows folksy-talk does not make a tangible difference.
What does make a difference, but for the worse, is that yet another hallmark of the Swedish welfare state is now crumbling. The retirement system, overhauled 20 years ago in a reform praised as “free market based”, is under such severe pressure that the parliament may have to raise the retirement age to 75. Euractiv reports:
Swedes should be prepared to work until they are 75 and to change careers in the middle of their work life if they are to keep the welfare standards they expect, Swedish Prime Minister Fredrik Reinfeldt said. The retirement age is being debated in the Swedish parliament ahead of an expected pension reform package in April. In its proposal, the government wants to give people the right to remain at work until 69 instead of the current 67 cut-off age.
Let’s just make a brief stop here and notice something. The government in Sweden bans you from working when you turn 67. It is illegal for you to seek employment above that age. People get around that by starting small consulting businesses, but the law is still a good example of how the big, Swedish nanny state operates: anything that is not explicitly permitted is forbidden by default.
Back to Euractiv:
Meanwhile, the right to early retirement would be delayed by two years, to 63. However, Reinfeldt said in several interviews over the weekend that Sweden must consider taking the step even further by raising the retirement age to 75. “This is a time of changes in the global world economy. The nations we meet in open competitions don’t have our welfare ambitions. They don’t put taxes on production to finance the pension system or welfare solutions. Therefore the question remains, is our equation correct?”
The man is delusional. This has nothing to do with saving the export industry. The big corporations that have characterized the Swedish private sector since at least the 1950s are either dead (SAAB Automobile), gone abroad (ABB; Pharmacia), gobbled up by foreign corporations (Ericsson; Volvo Cars; Scania) or in the process of leaving Sweden (Volvo Heavy Trucks). This is part of a natural industrial cycle, where big, mature corporations lose out to new, more dynamic business models. Just look at how the Japanese car manufacturers capitalized on the stale, bureaucratic inefficiency that characterized the Big Three in Detroit back in the ’80s.
Mr. Reinfeldt’s problem is instead that his welfare state has suppressed private-sector activity outside of the big, old manufacturers. Up until a few years ago the corporate landscape in Sweden looked almost exactly the same as it did half a century earlier. Since about 2007, the big old dinosaurs have been in an increasingly ailing condition, unable to function as the “engines” of the private sector. But since Swedish tax policies, labor market laws and other regulations have been tailored to the needs of those big corporations, they have made it very difficult for small, new, dynamic businesses to grow.
Therefore, what Mr. Reinfeldt is really seeing is that his country’s private sector can no longer feed the welfare state because it is dominated by over-subsidized, under-challenged industrial behemoths with bureaucratic arthritis. And he is utterly incapable of dealing with the situation, because he wants to protect the welfare state at all cost.
Including this ridiculous retirement reform, of which Euractiv has more to say:
Reinfeldt, who leads a centre-right government, also said half of today’s children in Sweden can expect to become 100 years old and there has to be a change in the way the Swedes view their work life. “Therefore, Sweden must as a society ask ourselves the question: are we ready to meet these changes? The changes are basically positive. But if we want good pensions and welfare then we need to start discussing what our work lives should look like,” the prime minister said in a radio interview.
To begin with, I would seriously question the suggestion that half of Sweden’s children will live to be 100. Given how their health care system has deteriorated over the past 15 years, and such socially destructive factors as widespread depression and serious levels of alcohol consumption among the young, I would question if the average life expectancy will in fact stay where it is today. It is more likely that it will actually decline over the next couple of decades.
More importantly, though, is the fact that Mr. Reinfeldt – an alleged conservative – adamantly believes that it is the business of government to dictate when people are allowed to retire, and when they are allowed to work. All this shows is that Mr. Reinfeldt is just another statist European social democrat.
A far better approach would be to say that “we see such dramatic changes in the ability of the economy to support today’s retirement system that we will allow everyone to keep their own money and invest for retirement as they see fit”.
Some would rightly point out that Sweden already has a system of private retirement accounts within the government-run model. This is correct, but the ability of that system to fund future retirement is entirely dependent on an ailing economy. The pay-as-you-go part suffers from the same problems as our American Social Security system, while the private account part can only give good returns on investments if the Swedish economy is doing well.
Which it is not. More on that later. For now, back to Euractiv:
To be able to work until the age of 75, the Swedish prime minister says he envisions at least one career change during a person’s work life as the job one may have as a young person could become too tough or stressful later on. Reinfeldt acknowledges that this will require a huge change of mindset among the Swedish population. “It’s a very challenging idea. Our whole life is affected by the fact that we speak to a career counselor, make a decision, and then think we will work with the same things for the rest of our lives,” the prime minister stated.
The real issue here is that Sweden has a serious under-employment problem already as things are today. Youth unemployment is among the highest in Europe, and laid-off 40-somethings have enormous problems landing a new job. The work force is being expanded by up to 100,000 immigrants each year, yet the labor market can only add a net of 60-70,000 new jobs annually (and that is in a strong growth year).
On top of that, Sweden has very rigid labor market laws compared to other “free” economies. Unions are exceptionally strong, with all the negative consequences that follow. Firing workers is a significant undertaking, which makes employers balk at hiring people for full-time positions. Labor-based taxes put a steep price on new jobs, as do the responsibilities that employers have for income replacement when workers are home sick.
The bottom line is that the Swedish economy does not suffer from a shortage of labor. It suffers from a shortage of jobs. To force people to stay in the work force up to the age of 75 under such circumstances is – forgive my repetitive use of the term – delusional. I can only see one logical motive: to try to cut the cost of the retirement system while keeping it in place.
In other words: the purpose of the reform is to make people pay taxes in to the retirement system for several more years and take benefits out of it over a shorter period of time. But there will be no attempt to give people a chance to opt out entirely.
A classic example of how a government applies austerity measures to save a welfare state it does not want to let go of, come Scylla or Charybdis.
And they will come. Sweden is on a downbound path that sooner or later will hurl the country into social chaos. The fact that this has not happened yet is entirely due to Swedes still believing that their country is a stable, functional welfare state.
They are like the famous bumble bee, which can’t fly but does not know it can’t, so it does it anyway. And just like the bumble bee, once the truth dawns on them, the Swedes will fall flat to the ground. From a cynical viewpoint, it will offer us an opportunity to study the last stages of the deterioration of a welfare state in a full-scale laboratory.
From a human viewpoint, though, it is going to be one big tragedy, brought upon an entire people by simple-minded socialist politicians, determined to shove their ideological construct down people’s throats.
I can only thank my lucky star I left that place 14 years ago.
In a time when it is becoming glaringly obvious that the European welfare state is on critical life support, there seems to be a bit of an existential debate emerging in the West. Europe has been so invested in the welfare state over the past 75 years that no one alive can remember what life was like without it. In America, the liberal elite envies Europeans who have the privilege of paying a lot more in taxes without getting anything more back. As the welfare state crisis unfolds, the political and self-appointed intellectual leaders of the West are forced to re-examine the very premises of their own existence in the public arena.
So far, this has not led to any major mea-culpa confessions of economic and social mistakes. The European Union, led by an unelected class of Eurocrats, has almost wiped Greece of the macroeconomic map in order to protect the welfare state (and the common currency). They have practically stamped Spain into a wet spot between fiscal annihilation and political humiliation. Italy, Portugal, even larger countries like France, are waiting for their turn.
On the American side of the Atlantic, Canada has thus far preserved its welfare state by shaving off “inefficiencies” and leveling out its taxes. But their high dependency on welfare has created plenty of drug and crime problems, and they still cannot afford to give their citizens decent health care under their socialized system. Canadians with money still come in droves to the United States to get treatment – and then they go home and vote for politicians who want to keep that socialized system alive.
There is a fair amount of debate over the welfare state in Canada. It remains to be seen if the country that has always tried to strike a “prudent” balance between Europe and the United States can come to grips with what foot they want to stand on.
In the United States, the battle between the European welfare-state ideology and liberty rages on. The former camp is represented by president Obama and his entourage of arrogant statists; the latter has the support of the majority of the American people. In 2012 the president and his leftist cohorts lost two big states, North Carolina and Indiana, and almost ten million voters who had previously backed Obama decided to stay home. What kept Romney from winning was a similar decision by three million Conservative and Libertarian voters, some of whom chose to vote for Gary Johnson out of principle.
In that same election, friends of freedom reinforced their positions in state legislatures and gubernatorial mansions. The Tea Party movement is now producing a new generation of electable candidates.
The resiliency of the Tea Party movement despite resistance even from Republican leaders is a strong indication that support for the European welfare-state ideology may have reached its peak in American politics. It will take time for liberty to regain the upper hand, and the outcome of that battle is far from certain. But there is also a new sense of determination emerging among Republicans in Congress, and rising support for traditional Conservatism across America. A recent study by Gallup reveals a notable slant in the Conservative direction among Americans in general: the most conservative states are more conservative than the most liberal states are liberal. This means, in short, that liberalism is diluted even where on its own home territory.
It is also encouraging to see the strong popularity of Republican governors such as John Kasich in Ohio, Scott Walker in Wisconsin and Chris Christie in New Jersey. They are all more or less fiscally conservative and represent a defense line against the invasion of the European welfare state. (And don’t forget the Republican takeover of Michigan, quite an accomplishment.)
There are, in other words, many reasons to be optimistic about the future of America. Once the European welfare-state ideology has been driven off our shores we can focus on rebuilding an economy based on free enterprise and a society based on faith, charity, individual responsibility and self determination.
Before we get there, though, we have to keep up the fight in every corner of the public policy arena. Many disillusioned supporters of the welfare state are still scrambling to market their warped vision of a benevolent government as palatable, even desirable, for America. The latest example comes out of The Economist, in the form of a panegyric Festschrift to the Nordic welfare state:
Smallish countries are often in the vanguard when it comes to reforming government. In the 1980s Britain was out in the lead, thanks to Thatcherism and privatisation. Tiny Singapore has long been a role model for many reformers. Now the Nordic countries are likely to assume a similar role.
They forgot to mention Switzerland and Luxembourg, both of whom have kept their welfare states to an absolute minimum by European standards.
That is partly because the four main Nordics—Sweden, Denmark, Norway and Finland—are doing rather well.
A stretch of facts to the point of breaking. Sweden has one of the highest rates of youth unemployment in Europe. The Norwegian economy is as big as the Swedish, with half the population. Sweden has a violent crime rate per capita that is higher than its three neighbors – combined.
Denmark has a personal income tax rate that begins above 40 percent. Finland’s employment numbers are trending negatively, as its economy has become frightfully dependent on exports; the flip side of spending all your political capital on boosting exports is that you have to suppress domestic demand. When exports go bust, there is no domestic spending to make up for it.
More on these mechanisms in a moment. For now, back to The Economist.
If you had to be reborn anywhere in the world as a person with average talents and income, you would want to be a Viking. The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality.
Of course. Denmark went through a devastating period of austerity in the 1980s, while Sweden was hurled into its own depression in 1991. In 18 months, unemployment went from two percent to 15 percent. Government cut spending and raised taxes in an austerity package equivalent to nine percent of GDP.
Denmark fell back into austerity in the early 2000s. They closed a number of hospitals under the single-payer system, forcing Danes to accept health care rationing as part of their daily lives. In Sweden, austerity continued and the single-payer health care system laid off one fifth of its medical staff in a matter of a few years.
The Swedish disaster has continued. Today, the employment level among working-age Swedes is eight percentage points lower than it was before the crisis in the early ’90s. This is reflected in massive youth unemployment, and a widespread system of temporary jobs for those who can get a foot in the door of the labor market.
The Economist again.
To politicians around the world—especially in the debt-ridden West—they [the Nordic countries] offer a blueprint of how to reform the public sector, making the state far more efficient and responsive. The idea of lean Nordic government will come as a shock both to French leftists who dream of socialist Scandinavia and to American conservatives who fear that Barack Obama is bent on “Swedenisation”.
What lean government? This classic research paper by three economists at the European Central Bank shows that the Nordic welfare states are far less efficient than the American. Output efficiency – which measures what you actually get for your tax dollars – is half, half, as high in Sweden as it is in the United States.
But of course, if you take in the world’s highest taxes and give less and less back, you don’t need a whole lot of bureaucrats to administer the spending programs. All you have to do is rake in the cash from taxpayers and then leave them to fend for themselves.
Sweden, incidentally, happens to have the longest waiting lists for health care in Europe, with the exception of Albania.. For more on the “efficiency” of the Swedish single-payer system – the crown jewel of the Swedish welfare state – check out this well-written paper.
The Economist, however, does not bother with such facts. They are out to sell the Nordic model as the Second Coming of the Welfare State:
Government’s share of GDP in Sweden, which has dropped by around 18 percentage points, is lower than France’s and could soon be lower than Britain’s.
Yes, it topped 60 percent in the ’90s. But keep in mind that financial transfers do not count here. Welfare checks, unemployment benefits, income security payments are financial transactions that don’t show up in GDP. A very large part of the Swedish welfare state is all about paying people not to work.
Taxes have been cut: the corporate rate is 22%, far lower than America’s.
Technically, that has not yet taken effect. But the big stumbling block for Swedish businesses is the conglomerate of labor security laws. Those laws have driven the exorbitant costs of labor – payroll taxes are more than twice as high as in America – to even higher levels and are part of the reason why the Chinese owner of Volvo Cars is slowly transitioning Volvo production out of Sweden. Labor laws also got in the way of saving SAAB and contribute to the decision by Volvo Heavy Trucks to move its mass transit bus manufacturing to Poland.
Back in the ’80s and ’90s Sweden lost almost all of its once-sprawling pharmaceutical industry. Ericsson, the world’s pioneering telephone company, is limping along today only because of its alliance with Sony.
Back to The Economist, who manages to get yet another welfare-state selling point wrong:
While Mr Obama and Congress dither over entitlement reform, Sweden has reformed its pension system.
And retirees are losing heavily, as the system automatically cuts benefit checks but continues to take money to the same degree from taxpayers. Right now there are mounting demands in Sweden for yet another reform to fix the gaping flaws in the reform from the ’90s. “Retired and poor” is becoming a national sport in Sweden (and sadly my mother is among those having to take a beating).
Its budget deficit is 0.3% of GDP; America’s is 7%.
It is very easy to balance the budget. North Korea has a balanced budget. Romania under Ceaucescu had a balanced budget. All you have to do is, to quote Obama, “tax the heck out of people”. It means nothing when it comes to how people actually live their lives.
The average Swede, by the way, has a standard of living that would qualify him for welfare in most states here in America.
And then, of course, The Economist brings up the shiny coin that Swedes always hold up when they want to sell their welfare state:
Sweden has a universal system of school vouchers, with private for-profit schools competing with public schools. Denmark also has vouchers—but ones that you can top up. When it comes to choice, Milton Friedman would be more at home in Stockholm than in Washington, DC.
Except for the tiny little factoid that if you want to start a private school you have to apply to the local public school district. If the district issues a certificate of need, you can go ahead and open your school. If the public school district thinks that there is no need for competition with their schools, they say no and you have nowhere else to go.
Also, The Economist forgot to mention that home schooling is illegal in Sweden, as are schools with a religious affiliation (except for islamic schools which are violating the law but allowed to continue to exist out of misguided political tolerance).
The rest of the Economist article follows the same line of snake-oil salesmanship. Their attempt at selling a used car wrapped in shiny coating is so full of questionable, superficial and sometimes outright false statements that it would take a thesis to account for all of them. This article is already 2,000 words long…
But fear not. I have finally gotten the material together for my new book, and will be submitting the manuscript this spring:
Sweden – Indictment of a Welfare State.
Europe’s permanent economic decline takes many different forms. One of them is that young Europeans are increasingly living with their parents years into adulthood. Der Spiegel reports:
Young Europeans in countries hit hardest by the Continent’s economic crisis are finding it difficult to move out of their parents’ home. Data shows that over 50 percent of those aged 25 to 34 in some countries have yet to move out. Most young adults are eager to leave home to start independent lives. But in those European countries where the economic crisis has hit hardest — particularly in southern and eastern EU member states — that appears to be a difficult move to make. In 2011, more that 50 percent of the 25- to 34-year-olds in Greece, Bulgaria, Slovakia and Malta still lived in their parents’ homes, a SPIEGEL analysis of information from the European Commission statistics division Eurostat has revealed.
Just as Europe’s decline is not a new phenomenon but something that has been long in the making, this trend is not new. Eurostat data over household age distribution in Europe reveals that young households make up a decreasing share of all households. The data, which is not produced annually, show that from 1999 to 2005, the share of total households where the reference person (called head of household in America) is younger than 30:
- Decreased by 36 percent in the United Kingdom;
- By 25 percent in the Netherlands;
- By 24 percent in France;
- by 22 percent in Portugal;
- By 18 percent in Sweden;
- By 15 percent in Slovenia and Spain;
- By 13 percent in Latvia;
- By 12 percent in Denmark and Luxembourg; and
- By 11 percent in Ireland.
The share did go up moderately in some EU countries but those examples are exceptions to the general trend.
We have more Eurostat numbers to report, but first let’s get back to Der Spiegel:
In Portugal, Italy, Hungary and Romania more than 40 percent of those in this age group remain in the nest (see graphic). Nations with a high percentage of Catholics show a particularly high number of young adults who have yet to move out of their parents’ home. This is also the case in Eastern Europe, where working conditions for entry-level workers are particularly precarious. These numbers are in stark contrast to those in the EU’s most northerly member nations, where less than 5 percent of 24- to 34-year-olds in Finland, Sweden and Denmark continue to enjoy the luxuries of Hotel Mama.
That’s selective reporting. If you look at the entire “young” population, aged 18-34, the data from Eurostat continue the disturbing trend we discussed above. The share of 18-34-year-olds living with their parents in 2005 and 2011 increased in 18 EU countries, with the United Kingdom at the top. In 2005, a notable 29.1 percent of young Brits lived with their parents; in 2011 that share had gone up to 38.6 percent. This is an increase by one third.
Sweden and Hungary share second place in terms of increase: in both countries the share of at-home living 18-34-year-olds grew by 25 percent. For Sweden that meant a rise from one in five in 2005 to one in four in 2011; in Hungary, a staggering six in ten young adults lived at home in 2011.
There are also stark contrasts between countries, as the Spiegel points out. Croatia reports the highest number for 2011 with four in five young adults living with their parents, while Denmark has the lowest at one in six.
It is disturbing, and a sign of prosperity-on-hold, when young adults are unable to afford a home of their own. This trend of course correlates with the depressingly high youth unemployment that is plaguging more and more European countries. What’s worse, the outlook is not positive.
One generation Europeans is already growing up to be poorer than their parents. Will the next generation suffer the same fate? In Sweden, this is already happening: college-graduating Swedes have to look to their grandparents to find a generation that rose above the prosperity of their parents.
What happens to a society where decline has replaced advancement as the overall socio-economic trend?
Even more pressing is the question: what can Europe do to break their slide into a perpetuum of industrial poverty?
The first question I will leave to sociologists to answer; as for the second one, come back tomorrow…
Are you an American woman jumping up and down with joy over the prospect of having an abortion under Obamacare, courtesy of taxpayers? Well, keep jumping. You might want to make sure you stay good shape and have a long and healthy life, because before you know it there will be fewer of your kind. Countries that allow tax-paid abortions are quitely engaging in a gendercide against women. Dispatch International, a new and promising Swedish newspaper, has the story:
Swedish and foreign women are exploiting Swedish abortion laws to abort their female fetuses. The problem has grown so large Europe-wide that the Council of Europe (CoE) passed a resolution against gender selection – a resolution that Sweden chose to ignore. This resolution is merely a guideline, announces the press secretary of the Social Minister.
Sweden has allowed abortions on taxpayers’ tab for almost half a century. Some statistics have classified abortion as the most widespread contraception method, with one in four pregnancies being terminated by abortion. This is, of course, heavily supported by the Swedish feminist elite; it is very telling that the story about abortion-driven gendercide against women is broken by a conservative-leaning news outlet like Dispatch International.
The problem for the women’s movement is that they have elevated abortion almost to a rite of passage for a true feminist. It is like when a prospective member of Hells Angels has to do time before he can be admitted as a full member. Therefore, the feminists cannot criticize this use of abortions, because that would imply that they would advocate restrictions on the practice of killing unborn babies.
Kudos again to Dispatch International for breaking this story, and for explaining how abortion is being incorporated into an entire arsenal of gendercide instruments:
The world is short of more than a hundred million girls. These children have been targeted with abortions, died at birth or have been mistreated to death – merely for being born female. The killing of girls has become so extensive that it is being classified as an ongoing genocide, or more precisely gendercide.
Let’s note, again, that abortion is being used on par with mistreatment, abuse and other methods for killing unwanted children. Yet when pro-abortionists speak of the practice they call it part of “health care”. Last time I checked, pregnancy was not a disease, but their reason for calling it “health care” is of course that they want taxpayers to have to pay for it.
Should taxpayers then also be forced to pay for other methods for killing unwanted babies? Should infanticide be elevated to the same level of “acceptance” in our culture as abortion? That question is not as far-fetched as it seems.
Back to the Dispatch story:
The methods for committing gendercide have been refined through the last decades. New technology makes it possible to identify the sex relatively early in pregnancy by cheap ultrasound scanning, which leads to more undesired girls being discarded when they are only fetuses. The phenomenon, which used to be limited to parts of Asia and Eastern Europe, has now spread to the USA as well as to other parts of Europe.
Just wait until Planned Parenthood don’t have to pretend anymore that they aren’t paying for abortions with tax-paid grants. Or, for that matter, when Medicaid will start offering abortions right and left at no cost.
That gendercide has become a genuine threat even in Europe is confirmed by the Council of Europe, where in 2011 the parliamentary assembly passed resolution 1829 against gender selection. The resolution urged member states to closely follow the statistical trends for births of boys versus girls in order to discover tendencies towards gender selection. The countries were also encouraged to note separately if any such tendency occurs within specific population groups, and report this back to the CoE Committee of Ministers.
The aforementioned hand-wringing among feminists over this is put on full display in Sweden:
Sweden, however, chose to ignore the resolution. The motivation for this being that the resolution is not legally binding, and that it is considered difficult to prevent abortions targeting girls, due to the extremely liberal Swedish abortion laws. Sweden is the only country in Europe that permits abortions up until the time where it is estimated that the child could live outside the womb, that is, until the 22nd week pregnancy. Up to and including week 18, no justification needs to be given for the abortion, and consequently no statistics exist to show why the women chose abortions.
Any means to track the gender of the babies killed would in other words dethrone Sweden from being the abortion kingdom of the world. The very fact that Sweden, whose government is filled to the brim with self-proclaimed feminists, is so adamantly protective of its reckless abortion laws is face evidence of how women in the feminist movement have elevated abortion above any rational discussion.
The liberal Swedish abortion law is even exploited by women from other countries. Danish ultrasound clinics report about women who, after having an ultrasound scanning for the sex of their fetuses, travel to Sweden in order to have an abortion if they find the child to have the “wrong gender”. Danish law permits abortion merely up to the twelfth week of pregnancy.
I had a related story in July last year where I reported specifically on how Danish women are using Swedish abortion laws to discard babies with cleft palate.
While the feminist movement is a big culprit in this, the ultimate problem is that there is something called “single-payer health care” and that the single payer is government. By claiming that abortion is a health care procedure curing a disease, proponents of socialized medicine are effectively cleaning the gendercide against women of its abhorrent immorality. If government provides the service, then the service is morally acceptable, right?
Immigration is a very tense topic in Europe. A rising number of immigration-skeptical political parties are growing in influence throughout the EU. They cover a relatively broad spectrum, from borderline fascists like the British National Party or the Party of the Swedes, to traditional European nationalists like Fidesz in Hungary and True Finns in Finland, to those that only want to curb immigration and emphasize assimilation of immigrants. This latter category is represented by a Scandinavian duo, the Danish People’s Party or the Swedish Democrats.
Sweden actually provides a good illustration of how tense the immigration issue is in Europe. According to Eurostat data, Sweden grants residency to anywhere between 75,000 and 90,000 immigrants per year. Given that the total Swedish population is just over 9 million, this is a significant immigration, the largest in Europe by share of population. Most of the immigrants Sweden receives are from muslim, non-European countries such as Afghanistan and Somalia.
If the United States had an immigration on the same scale as Sweden does, we would grant green cards to some three million people each year, most of whom would come with less than middle-school education, often with a rudimentary understanding of what it is like to live in a modern, industrialized society, and most of whom would have as their value basis a very rigid form of Islam.
There is a reason why we don’t have this kind of immigration in America. It is practically impossible to assimilate such large numbers of people in one year. It is akin to a national crisis to allow such immigration for a few years time. It escalates toward a national disaster if this kind of inflow continues for more than a decade.
Sweden is right there, right now. Since 2000 the small, northern European country has opened its borders to about one million immigrants, most of whom from non-European, non-Western backgrounds – and for the most part with very little education. Needless to say, this creates a powder keg of social tensions, cultural conflicts, unemployment (how many jobs are there in a country like Sweden for a Somali man in his 40s with one or two years of Koran school on his resume?), competition over housing (imagine if we here in America had to build a new St Louis every year – and then some) and, when the immigrants have been isolated in the enclaves long enough – a surge in crime.
Sweden has among the highest rates of violent crime in the industrialized world. Gothenburg, the country’s second largest city with 750,000 residents, has a 75-percent higher violent crime rate than slightly larger Cleveland.
The unrelenting crime spree in that formerly peaceful country is almost entirely caused by irresponsible immigration. Another social and economic problem is that immigrants are vastly over-represented on welfare rolls. The combination of rudimentary education, a very tight labor market and a generous welfare state is a recipe for life-long dependency on taxpayers’ dole.
But it is also an immigration magnet in itself. Even though the statistics are not entirely easy to disseminate with regard to the motives immigrants have, aforementioned Eurostat data show significant discrepancies between asylum seekers and total immigration. This discrepancy is relevant: a continent that is suffering from the highest and most persistent unemployment rates since the Great Depression is hardly in need of workforce immigration. When people come to unemployment-plagued Europe for no other reason than to look for work, and when their education and experience do not give them much of a chance of finding a job in the first place, chances are they will end up on welfare.
This is precisely what has happened in Sweden. Other countries have seen the same problem.
One of them is Greece. The difference between Greece and Sweden is that since Greece has had a tighter immigration policy for many years, most of their immigrants have been illegal. That has changed with the last few years of a depression-style economic crisis. The EU Observer has recognized this in a series of articles. The first one is straight from the border:
A 12.5-km-long fence rolled with barbwire runs across plots of garlic and asparagus on the Greek-Turkish border. For the small farming community at Nea Vyssa, the presence of Greek military and police is a welcome relief from the mass of irregular migrants crossing from Turkey on a daily basis before the summer. “Sometimes a hundred or so would arrive in one day and wait for the train to come,” one local villager said.
Not everyone is happy about this border fence. The Eurocracy, e.g., which prides itself on being politically correct and welcoming all sorts of immigrants with open arms:
The barrier – bankrolled by the Greek state – was roundly condemned by EU officials when it was first announced over the summer. Greece has been arguing its border is an EU issue which merits EU help. But it also sees the mass arrivals of migrants as a threat to its Hellenic identity and national security.
And here comes the real political reason why it was so important to roll out razor wire along the border:
The 450,000 Greeks who voted for the neo-fascist Golden Dawn party on the back of a virulent anti-immigration campaign illustrate the strength of feeling.
This of course frightens people high up in the do-good Eurocracy, where a more “kind” form of immigration regulation is gaining support. The focus, as the EU Observer reports, is more biased toward keeping borders open than to protect the ailing European economy against even higher welfare costs. This is evident in, e.g., the European Parliament…
whose committee on civil liberties amended … draft legislation to include provisions on saving migrant lives at sea. “Saving the lives of migrants in the Mediterranean sea is absolutely necessary. [Migration management agreement] Eurosur will improve cooperation between EU member states and the Frontex border control agency,” said Dutch Liberal MEP Jan Mulder, who drafted the parliament’s position.
The contrast between this theoretical ideal and the harsh realities on the Greek-Turkish border could not be stronger:
Meanwhile, watchtowers on either side of the shimmering barbwire overlook a territory that once spelled hope for tens of thousands of people entering Greece from as far away as Afghanistan. Last year, some 55,000 were detected wading across the Evros river that forms the Greek and Turkish border. … The fence has won praise, especially among those who patrol, armed with weapons, along its edge. … The number of people who attempt to cross the border has plummeted. Those apprehended in the south of Evros are now sent to Greece’s naval military base in Poros Island.
A second article by the EU Observer sheds more light on the true nature of illegal immigration into Europe, especially via Greece:
A chief of police in a border town in northeastern Greece says irregular migrants are no longer crossing into the country from its land border with Turkey. Barbed-wire fences, landmines, thermal night vision cameras and regular patrols are among the tools used to stop a phenomenon the Greek state considers a national security threat. Some 55,000 people were detected attempting to wade across the Evros River into Greece from Turkey in the region in 2011. The figures have now dropped to near zero, says Pashalis Syritoudis, director of police in the run-down Greek border village of Orestiadas … He says the trend stopped since Greece launched Operation Xenious Zeus in early August. Migrants are now targeting the more treacherous sea crossings near Lesvos, Sumos, Symi and the Farmkonis islands instead. “We have given a very clear message to … [migrant smugglers] and their source countries in North Africa and other countries that Evros is no longer an easy passage to enter Europe,” Syritoudis noted.
Human trafficking used to be associated with prostitution and slave trade (especially from East Africa to the Arabian peninsula) but over the past couple of decades it has increasingly shifted to smuggling people from deplorably poor countries to Europe. This has now become a self-fulfilling prophecy in the sense that the smugglers want to keep their lucrative business going. As the EU Observer notes, the smugglers have no concern who they take money from or what conditions they subject their “merchandise” to:
One [border patrol] officer, who did not want to give his name, told this website that his unit apprehended a young man from Pakistan in the winter whose hand had frozen solid. “We had to cut off his hand. He told us to send him back, that he was now useless to his family. We felt sorry for him, not because he lost his hand, but because he was no longer a value to his family,” he said. He said he had also seen pregnant women and young girls trying to cross the river. In one case, a Pakistani woman had a baby on the road just 10 days before crossing the river. “You begin to understand that things must be terrible for them to take such risks and I really feel for them but at the same time we feel unnerved, unsettled by their presence and numbers. We are terrified by this invasion,” the officer said.
The invasion consists of hundreds of thousands of immigrants who flock the streets of Greek cities, and countless others coming to other European countries. Again, this is what Europe’s nationalist and immigration-skeptical parties are reacting to – and it would be a disastrous mistake not to take this skepticism seriously. If the democratic, non-authoritarian, immigration-skeptical parties cannot win enough legislative support for very tight immigration laws – and very tight enforcement of them – then immigration-skeptical voters are going to turn to the “next line of defense” which eventually comes down to parties like the British National Party and Golden Dawn in Greece.
Free global movement of people is an essential part of a free world. But it cannot be combined with a welfare state that promises people a life on taxpayers’ tab. If Europe wants more immigration, it is going to have to give up the welfare state. If on the other hand it wants the welfare state, it is going to have to give up immigration.
If Europe’s political leaders don’t appreciate this choice, they will invite ugly, totalitarian parties to take over the entire continent, one country at a time.
For reasons I have yet to fathom, my libertarian friends on the Tenderfoot Coast between Times Square and Tysons Corner eagerly praise Sweden as some sort of wonder of economic freedom. Yes, Sweden. The country with the world’s highest taxes, socialized health care that makes Obamacare look awesome by comparison, 30-percent income tax rates for low-income families, twice the rate at the top, laws that literally permit unions to behave like a mafia, payroll taxes more than twice as high as America, some of the world’s most rigid hire-and-fire laws…
This is the country that many American libertarians praise as being more libertarian than America. I certainly agree that America is moving in the wrong direction, but when a libertarian praises Sweden for having introduced an Earned Income Tax Credit into its tax system, and thus steepened the marginal tax rate effect, he is inches away from political sacrilege.
Contrary to what you might hear at cocktail parties inside the Beltway, Sweden is nowhere near a well-ordered libertarian-style society. Its economy is bad, with one of the highest rates of youth unemployment in Europe. The big corporations that have saved the Swedish economy over and over again from reckless tax policies and government power grabs, are now packing up their bags and moving, one truck load at a time, to more hospitable environments. The symbols of this corporate decline are SAAB Automobile, which has ceased car production entirely, and Volvo Cars, whose Chinese owners correctly assess that future models won’t be profitable if built under Sweden’s high taxes and rigid labor laws.
The rest of Volvo is still a Swedish company, but decreasingly so. Its mass transit bus division is moving its production to Poland, laying off thousands of workers in Sweden.
I could go on and on about the state of the Swedish economy, from the dramatic downsizing of its health care system (with one fifth of its total medical staff laid off in a few years) to the failure of the school choice system, to the disastrous general income security system. But this is not the place for such a lengthy excursion. I have already chronicled the dark side of the welfare state. Today I want to focus on a limited, yet crucial aspect of Sweden’s slow, agonizing collapse.
The triumph of organized crime.
In an op-ed in today’s Dagens Nyheter, one of the largest daily newspapers, two of Sweden’s top law enforcement officers effectively declare that the police has lost its fight against organized crime. The text is my translation; click here to perform a google translation:
Organized crime is a growing problem. As a result of changes in our society and the world around us, this kind of criminal activity has grown and continues to grow. This trend must be broken.
A linguistic note: the Swedish language often uses passive form to express normative statements. There is a cultural reason for this – Swedes are more collectivist-minded than most other Europeans – but the important point is that this makes the translation look a bit awkward.
The intelligence service of the national police is performing a comprehensive analysis in order to get a detailed picture of organized crime [in the country]. The conclusions cannot be reported statistically or in detail, but the broad picture is clear: organized crime is expanding. This is a serious situation that requires more of the police as well as politicians, but also of other parts of society.
It might be worth mentioning that most other European countries do not have nearly the same problems with organized crime as Sweden does. Crime statistics from Eurostat, Nationmaster and national sources show that Sweden stand out in many disturbing categories.
Back to Dagens Nyheter, where the director general of the national police and the commissioner of the national crime investigation unit explain that organized crime in Sweden…
are active in drug trafficking; armed robberies and systematic fraud; well-planned, large-scale theft; extortion and reckless human trafficking. The victims are private citizens, businesses and government agencies and institutions. The [organized] criminals create a parallel society, avoid paying taxes and live as parasites on the welfare systems.
This last part is a bone thrown to the left. Traditionally, the large and hard-line Swedish left is vehemently opposed to any policies that go tough on crime. Sweden has, e.g., some of the most lenient sentencing guidelines for violent crime, which might help explain why Gothenburg has a 75 percent higher violent crime rate than Cleveland, a slightly larger but socio-economically similar city.
By mentioning that members of organized crime use the welfare state without contributing to it, these two top law enforcement officers hope to gain more widespread support for policies that will allow them to get tougher on organized crime. It probably won’t work, given that the left in Sweden is among the most rigid in the world in interpreting the welfare state as a system of inalienable rights.
After having given a couple of examples of where the police has been successful in fighting organized crime, the two law enforcement officers declare that they are going to lose the fight unless they get a lot more help. But they are not asking for more resources – more cops, better weapons, computer system upgrades, new tactics… They know that the national parliament won’t grant them more money. Instead, their plea for help is directed elsewhere:
[Other] national and local government agencies as well as businesses and others need to do more. Everyone needs to ask themselves what they can do to curtail the rise in organized crime. More is needed to stop recruitment of new members to criminal networks and to support those who want out. More is needed to stop illegal commerce and to make it tougher to live as a criminal. The continuous growth in organized crime must come to an end and it is incumbent upon everyone to contribute toward that.
In short: Sweden’s two top cops are telling the country that organized crime is winning.
The rest of Swedish media ignores this op-ed. There are numerous reasons for this, one being strictly cultural: for more than three generations, Swedes have been raised to believe that they live in the very best of worlds, where things like corruption and organized crime do not exist. There is a cultural reflex-of-denial reaction to the kind of situation that the two top cops describe.
This explains why the only substantial comment on this article you can find outside of Dagens Nyheter is at Avpixlat, a controversial but very popular alternative news site. They do not beat about the bush (my translation again, click here for google translation):
It is deeply worrying that the police is now surrendering and declaring defeat in the battle against organized crime. It is a development that precipitates the collapse of society in a way we are familiar with from countries like Mexico, where drug cartels de facto are in charge.
Though things are still very bad in Mexico, and I would never allow my kids to visit, the tide is slowly turning there. But be that as it may. The point here is that Sweden is heading into the shadowland where Mexico has been for a very long time.
Even more worrying is the fact that the political establishment in Sweden is systematically bullying and intimidating the only party in the parliament [Swedish Democrats] that can put forward a workable strategy to break this trend and re-establish the well-ordered society that is now rapidly withering away.
Again, no other Western European country is struggling with organized crime the way Sweden is. No other EU member state has seen such a sharp rise in critical crime categories in recent years, and no country has rolled back its police force the way Sweden has, with closed police stations, reduced patrols in many rural areas and almost total neglect of crimes below a certain threshold, such as aggravated assault.
No other European country can show such a deplorable record of solving crime as Sweden.
A major reason why this is all happening is that Sweden has for a long time built an enormous, unsustainable welfare state. With this socialist experiment, other collectivist values have penetrated society. Crime is not considered an individual responsibility, but something that “society” is responsible for. A solution, according to prevailing Swedish political doctrine, is to increase spending on entitlement programs. That way people won’t feel as economically insecure and won’t be as tempted to join a crime gang.
That most criminals in Sweden also use the welfare state is a fact that eludes the country’s political elite.
That Sweden is a country in deep trouble, with probably less than a decade to live as a parliamentary democracy, is a fact that eludes America’s libertarian elite. Hopefully, in the future they will do their homework.
There is this myth going around among America’s “big tent libertarians” (predominantly concentrated to the Tenderfoot Coast between Baltimore and Tysons Corner) that we here in America need to look to Sweden in order to figure out how to do things right. The latest example is an article by Matt Kibbe in the Forbes Magazine, where Kibbe, the president and CEO of Freedom Works, raises the highest-taxed nation on Earth to the skies.
I, for one, thought Freedom Works wanted more economic freedom in America, not less, but since I am not paying Kibbe’s salary I will concentrate on dispersing the mythologically rosy clouds upon which he serves his vision of adopting Swedish policies in America.
The headlines from across the pond read “Europe Rejects Austerity” as the French and Greeks elected socialists and even some neo-national socialists to office. These new officials have promised tax rates as high as 75 percent on millionaires, and have vowed to continue government spending unabashed in the wake of staggering levels of debt and anemic economic growth and persistent double- digit unemployment. However, there is one finance minister in one European nation that is bucking the trend, and, instead of ridicule and failure, he’s been named Europe’s best finance minister by the Financial Times. … His name is Anders Borg and he’s Swedish. That’s right, the European nation famously stereotyped for having aggressive taxation to fund an omnipresent state has actually decided that in response to the Eurozone crisis and the continued effects of the global economic downturn, or “Great Recession”, that it’s time to ease up on taxes and reduce the size of government.
After this bombastic set-up, Kibbe has a lot to deliver on. But already here we can see that he has not bothered to read Remaking America: Welcome to the Dark Side of the Welfare State, a book about the disaster waiting for us if we here in America were to copy the Swedish welfare state.
While Sweden is not technically in the Eurozone, as it does not use the Euro as currency, it has been drawn into the financial mess of the Eurozone by sheer proximity. Unemployment in 2011 was north of 7.5 percent and GDP growth was anemic at .4 percent projected for 2012.
If Kibbe checked his facts, he’d see that the only sector that has been growing in Sweden for the past 20-odd years is the export industry. Private consumption growth rates were at one third to one half of American levels for the last three decades of the 20th century. Since then the parity has been smaller, but only because America’s private consumption has grown more slowly.
Gross exports is the largest category of Sweden’s GDP. What does that mean? That households are living a very poor life while an isolated corporate sector is making good money. There is virtually no tricke-down from the export-oriented manufacturing industries to the rest of the economy.
In the Spring 2012 Economic and Budget Policy Guidelines, the Swedish Government and its Finance Minister, Anders Borg, have laid out a plan that is focused on lowering taxes. Their rationale? “When indviduals and families get to keep more their income, their independence and their opportunities to shape their own lives also increase.”
These “tax cuts” consist almost entirely of an Earned Income Tax Credit, which has increased the already steep marginal effects in the Swedish income tax system. That system, which starts at a 30-percent local income tax rate and tops out north of 60 percent, is now even more discouraging toward hard work, career-advancement and the pursuit of higher education. The more you make, the more government will take on the margin. All the Swedish version of the EITC does is encourage people to take low-paying jobs – and stay there.
Borg also wants to lower the corporate tax rate as a way of meeting the government’s goal of “full employment”. The government has already cut property taxes and other luxury taxes on the rich to lure investors and entrepreneurs back to Sweden.
The corporate income tax is about six percent of total tax revenues. Largely insignificant, in other words. Property taxes barely even register on the government revenue radar screen. Government revenues depend predominantly on personal income taxes and consumption-based taxes, such as but not limited to the value added tax. Besides, the property tax reform was initiated long ago and really has nothing to do with some kind of overall strategy by the current administration.
The government has also slashed spending across the board, including on the welfare programs that used to be Sweden’s claim to fame.
Every Swedish government over the past 20 years has executed spending cuts. Between 1995 and 2005 the socialized health care system laid off 21 percent of its staff. Between 2000 and 2006 the general income security system cut spending by tightening eligibility requirements to such a degree that they were running 15-percent surpluses year in and year out.
Did this benefit the economy? Of course not. Taking people’s money in the form of taxes and then refusing to spend it is not a policy for smaller government. Standard of living has remained virtually flat since the big crisis in the early ’90s, and the total tax burden on Swedish families and businesses is still the highest in the world.
They’ve also installed caps on annual government expenditures: real and enforceable limits that the Swedes believe are pivotal to economic stability. They explain in their Policy Guidelines that “the expenditure ceiling is the Government’s most important tool for meeting the surplus.”
Kibbe is wrong. These spending cuts were put in place in the late ’80s and reinforced by reforms to the national government’s budget appropriations process in the mid-’90s. Has this changed the role that government plays in the Swedish economy? Only for the worse: government now takes in on average 102 krona in taxes for every 100 krona it spends. Does Freedom Works really endorse that kind of government budgeting??
Imagine that, a government that stays within its limits.
And taxes are still the highest in the world. Freedom Works has to make up its mind: does it want a balanced budget or less government?
Then Matt Kibbe spins the no-austerity-here wheel one more turn, repeating the fiscal mythology that Veronique de Rugy marketed earlier this year (and I responded to here):
We have now seen that attempts at austerity within the Eurozone have met a similar fate: none of it was serious. As spending increases have been squandered, spending cuts have been a charade, failing to target the big government programs at the core of the debt crisis.
[What] Sweden is doing is working. And it’s working better than even Minister Borg expected. Despite slow projected growth for 2012, Sweden is expecting annual GDP growth of over 3 percent starting next year, projected out through 2016 by which time their unemployment is expected to slide down to just about 5 percent.
Pure accounting trickery. Sweden has enormous general income security programs where people can participate for a variety of reasons. With the exception of unemployment benefits, when government stashes away a person in one of these programs that person vanishes from the unemployment rolls. Sweden also has Europe’s highest youth unemployment rate.
Kibbe’s praise of Sweden’s superficial fiscal achievements…
During this time the Swedish gross debt is expected to drop from 37.7 percent/GDP to 22.5 percent/GDP as a result of government surpluses.I don’t think Kibbe could even imagine that this is what is going on in Sweden. But from now on I hope he studies up on the practices of the world’s largest, most authoritarian welfare state before he raises its superficial fiscal achievements to the skies.
…is overshadowed by his ignorance of the actual workings of the world’s largest, most authoritarian welfare state. One example of how the Swedish government balances its budget is from the general income security system, run by a government agency funded by very high payroll taxes. This agency forces sick people back to work by simply refusing to recognize their doctor’s notes on their medical condition. I report in detail on this practice in my aforementioned book Remaking America.
Long story short: the fiscal responsibility that Matt Kibbe sees and praises is actually achieved on the backs of cancer patients who are forced back to work because the government can no longer afford to pay their benefits.
Hopefully, Freedom Works is not in the business of generally handing out accolades to the world’s largest welfare states. But regardless of why Freedom Works is suddenly so interested in the big Swedish government, the real story here is that any attempt at keeping the welfare state will always fail in the end. In Sweden’s case the “salvage operation” has come in the form of massive austerity programs – in the ’90s government executed net spending cuts equivalent to nine percent of GDP – while still maintaining the world’s highest taxes.
There is only one sustainable solution: end the welfare state.
On his Fox News show Thursday night, Sean Hannity interviewed Stanley Kurtz of the Ethics and Public Policy Institute on a new revelation regarding President Obama’s political history. According to Kurtz in a piece in the National Review Online, Obama joined the so called New Party in 1996. This party, which does not appear to exist anymore, was in Kurtz’s words ”a leftist third party controlled in Chicago by ACORN”. Its policy agenda was focused on creating a Scandinavian welfare state in America:
The New Party’s aim was to transform the United States into a European-style welfare state, with the program of Scandinavia’s social democratic parties serving as a model. Mitt Romney has already identified this as the goal of Obama’s presidency, and the story of Obama’s New Party days lends credence to Romney’s claim. So while Romney was running Bain Capital, Obama joined a leftist third party controlled by ACORN and dedicated to turning the United States into a massive, European-style welfare state.
It is indeed important that we are once again reminded of the president’s rigidly radical beliefs in big government. It is also important that we are given yet another reason to learn about the dangers of the welfare state.
At the same time, let’s not exaggerate the practical meaning of the differences between the welfare states in Scandinavia and the American version. In both places the welfare state redistributes money and services between individuals on a permanent basis. More specifically, in both Scandinavia and America, government…
- …is de facto the single payer for children’s education through a public school system (with a limited charter-school system in Sweden);
- …has effectively seized monopoly on providing poverty relief, thus marginalizing and significantly reducing the importance of privately funded charity;
- …redistributes income through a highly progressive personal income tax system, with America’s personal federal income tax being even more progressive than the Swedish and Danish counterparts;
- …runs a tax-paid pension system that the vast majority of people rely on for their retirement.
There are differences, of course. America does not yet have a single-payer health care system, which we should be very grateful for. If the federal government continues to implement Obamacare according to the plan in the Affordable Care Act, we will eventually end up there. This should not surprise anyone, since single-payer health care is the crown jewel of the welfare state. But it is also important to recognize, again, that we still have a semi-private model and thus the opportunity to contain the damage done by the welfare state to our economy and our society.
Another difference is the lack of a general income security system in America. The Scandinavian countries have created programs where people get income replacement checks from government for being home with a newborn baby, being home with a sick child, taking care of a sick relative and being too sick to go to work. These income security programs are unknown to Americans, whose only encounter with income security – in addition to poverty relief – is the unemployment insurance system. Democrats in Congress have been trying to craete a general income security system, so far to no avail. It is interesting that even when they controlled both Congress and the White House they did not dare venture into this territory, but it is entirely possible that they will do so if Obama gets re-elected.
In fiscal terms, the American welfare state is surprisingly large compared to the Scandinavian ones. The reason is on the spending side: primarily Sweden has been cutting away at its tax-funded entitlement programs for many years now, while maintaining or even raising taxes. America on the other hand has been growing welfare-state spending within existing programs. As a result, there is a relatively big institutional gap in terms of what programs the American welfare state offers compared to its Scandinavian counterparts,but not a very big difference in terms of what government spends.
In short, the Scandinavian welfare states are stingier than the American one. There are a number of reasons for this, none of them particularly good, but they do make it seem as though America still has a long way to go before we become Scandimerica. In reality, the differences are much more moderate than they look on paper. As I explained in my book Remaking America: Welcome to the Dark Side of the Welfare State, there are enough similarities between the Scandinavian and the American welfare states to put us within striking distance of the same economic and social disaster that, e.g., Sweden and Denmark have experienced. Those two countries have had very bad episodes of austerity, where government has cut spending and raised or maintained high taxes.
A detailed explanation of the similarities between the American and Scandinavian welfare states requires a fair amount of time and space. I am hoping to deliver a paper on that later in the summer. Until then, let’s acknowledge Stanley Kurtz’s findings regarding Obama’s radical political affiliations, but let’s also keep in mind that America was already close to copying Scandinavia before Obama won in 2008. The damage he could do if re-elected would be real and painful, but most of the job has already been done by statists and compassionate conservatives over the decades since Franklin D Roosevelt came into office.