Big business looking for government protection worked alongside ambitious
politicians and union leaders to force Sweden into adopting socialist policies
in the decades following its impressive growth. Over time, government spending
more than doubled and taxes in certain sectors were doubled or even tripled.
Despite these calamitous changes, by 1970, the OECD still ranked Sweden as the
fourth richest nation in the world. However, by 2000 Sweden sank to number
fourteen. Dr. Per Bylund from Oklahoma State University has previously pointed
out that from 1950–2005, Sweden did not add one net private sector job. Nordic
Socialism has frozen a once entrepreneurial and prosperous people in time. With
few exceptions, Sweden’s large businesses have very little incentive to
innovate (and they have not), and many enterprises now survive purely on
government contracts whose value is impossible to ascertain without a system of
free exchange to establish prices for goods and services.
Sweden has managed to live comfortably for decades despite its many
heavy-handed socialist policies only because so much capital stock was created
in the decades prior (not to mention a sane monetary policy). Yet this capital
consumption is eroding Sweden’s wealth. In 2007, Professor Mark J. Perry from
George Mason University pointed out that if Sweden were to be admitted as a
51st state to the Union, it would be the poorest state in terms of unemployment
and median household income. Yes, even poorer than Mississippi. In fact
Sweden’s current welfare state suppresses household incomes so effectively for
Swedes that a 2012 IEA study found that American Swedes have roughly the same
unemployment rate as Swedes in Sweden yet earn, on average, 53 percent more
annually.
In recent years, Swedish lawmakers have begun slowly privatizing chunks of
their socialized sectors such as healthcare, social security, and education.
Last year, Reason magazine pointed out that private health insurance has
exploded in a country where cancer patients may wait up to a year for treatment
in the state-run system. This trend has grown. Sweden, furthermore, has begun
outsourcing education to private providers and seen not only a reduction of
costs but an increase in parent satisfaction and learning outcomes for
graduates.
The underlying problem with socialists like Bernie Sanders is that they do
not actually believe (or understand) in economics at all. As Ludwig von Mises
himself has pointed out, socialism is not an economic theory — it is a theory
of redistribution. Only free exchange can coordinate entrepreneurs and their
resources in a way that creates actual goods and services that satisfy consumer
needs and wants. Socialists like Bernie Sanders take no part in this process of
wealth creation; they merely show up after the fact and demand title. Sweden
has practiced this form of parasitic socialism on their accumulated wealth and
it has significantly stifled Swedish productivity.
Nordic-style policies advocated by Sanders have (predictably) restricted
Sweden’s growth for decades. The notion that we can implement Nordic socialism
in a nation of 320 million people without destroying labor mobility, taxing
capital out of existence, and absolutely crippling innovation where it’s needed
most is pure delusion. Sweden is slowly returning to its productive capitalist
roots. We should do the same. – Herman Talmadge III See article below:
The
'Problem' With Bernie Sanders. Submitted by Tyler Durden on 10/18/2015 17:50 -0400 , Submitted by Yonathan Amselem
via The Mises Institute,
Bernie Sanders’s entry into the presidential race
has sparked a nationwide conversation about socialism and its potential to
remedy the real and perceived pathologies suffered by Americans. Throughout Sanders’s extensive
political career, he has proudly labeled himself a socialist while being
careful to distance his ideological roots from basket cases such as North
Korea, Cuba, Venezuela, Bolivia, and other collectivist nightmares. Rather, as
with most progressive socialists, he considers himself a “democratic” socialist
sharing more in common with the relatively wealthy Scandinavian countries.
It is interesting that
progressives like Sanders can look at a rich country like Sweden and
automatically conclude that the nation’s high living standards do not result
from a laissez-faire past, low levels of national debt,
monetary independence, no centrally mandated minimum wage, strong legal
protection of property rights, a level-headed central bank, low corporate tax
rates, or even Sweden’s gradual move toward more privatization in healthcare,
social security, and education. Rather,
progressives naturally assume that Sweden’s high living standards are a product
of their high taxes and nationalized industries.
But, imagine if LeBron James took up smoking. Any success on the court
would be despite his
destructive habit not because of it. Sweden’s
economic success has come in spite of its socialism.
I will focus on just one Scandinavian country, Sweden, given that it has
often been touted by progressives as a sort of heaven-on-earth. A (very) brief
history of this fascinating country might help us better understand Sweden’s
current high living standards and the many ways in which Swedish socialism has
set an unnecessary cap on the nation’s productivity.
Sweden: From Crippling Poverty
to Unheralded Prosperity Through Laissez-Faire
Capitalism
Some 250 years ago, the area we recognize now as “Sweden” was a frozen
tundra inhabited by a huddled mass of starving peasants. Their lives were
tightly controlled by a series of kings, aristocrats, and other men of
artificially high esteem. As award-winning author, Johan Norberg points out in
this excellent piece on Sweden, it took a series of
classically-liberal minded revolutionaries to wrestle control from the elites
and put Sweden on a path to prosperity.
Licensing czars, an oppressive guild system, and
a litany of other onerous regulations on free exchange were dramatically
reduced or eliminated. In the century from 1850–1950, the population doubled and real Swedish
incomes multiplied nearly tenfold. Despite the almost non-existence of a
welfare state or any major state control of economic sectors, by 1950 Sweden
was the fourth richest nation in the world. Sweden’s extraordinary growth
during that century rivaled even that of the United States (Sweden was not a
participant in the two World Wars). As a matter of fact, capital formation and
wealth creation proved so abundant in Sweden during the global depression of
the 1930s that even social democrats in the legislature practiced a form of
salutary neglect to ensure the prosperity would continue. As with any other country, Sweden’s
impressive capital stock was built by entrepreneurs operating in a free market
system.
Sweden’s Experiment with
“Nordic Socialism” is Relatively New and Has Been Disastrous for Growth. Big business looking for government protection
worked alongside ambitious politicians and union leaders to force Sweden into
adopting socialist policies in the decades following its impressive growth. Over time, government spending more
than doubled and taxes in certain sectors were doubled or even tripled. Despite
these calamitous changes, by 1970, the OECD still ranked Sweden as the fourth richest nation in the world. However, by 2000 Sweden sank to
number fourteen. Dr. Per Bylund from Oklahoma State University has previously pointed out that from 1950–2005, Sweden did not
add one net private sector job. Nordic
Socialism has frozen a once entrepreneurial and prosperous people in time. With
few exceptions, Sweden’s large businesses have very little incentive to
innovate (and they have not), and many enterprises now survive purely on
government contracts whose value is impossible to ascertain without a system of
free exchange to establish prices for goods and services.
Sweden has managed to live comfortably for
decades despite its many heavy-handed socialist policies only because so much
capital stock was created in the decades prior (not to mention a sane monetary
policy). Yet this
capital consumption is eroding Sweden’s wealth. In 2007, Professor Mark J.
Perry from George Mason University pointed out that if Sweden were to be admitted as a 51st state to the Union, it would be
the poorest state in terms of unemployment and median household income.
Yes, even poorer than Mississippi. In fact Sweden’s current welfare state
suppresses household incomes so effectively for Swedes that a 2012 IEA study found that American Swedes have
roughly the same unemployment rate as Swedes in Sweden yet earn, on average, 53
percent more annually.
In recent years, Swedish lawmakers have begun
slowly privatizing chunks of their socialized sectors such as healthcare,
social security, and education. Last year, Reason
magazine pointed out that private health insurance has
exploded in a country where cancer patients may wait up to a year for treatment
in the state-run system. This trend has grown. Sweden, furthermore, has begun
outsourcing education to private providers and seen not only a reduction of
costs but an increase in parent satisfaction and learning outcomes for
graduates.
Bernie Sanders has Picked up
the Wrong Lessons from the Nordic Model
Bernie Sanders has stated now, and in the past, that he would like to see
an America with universal healthcare, paid maternity leave, expanded social
security through higher payroll taxes, mandatory vacation days and sick leave,
free secondary education, and the enactment of a slew of other progressive
policies. It seems he has only
forgotten to promise yachts for the homeless.
The underlying problem with socialists like
Bernie Sanders is that they do not actually believe (or understand) in
economics at all. As Ludwig von Mises himself has pointed out, socialism is not
an economic theory — it is a theory of redistribution. Only free exchange can coordinate
entrepreneurs and their resources in a way that creates actual goods and
services that satisfy consumer needs and wants. Socialists like Bernie Sanders
take no part in this process of wealth creation; they merely show up after the
fact and demand title. Sweden has practiced this form of parasitic socialism on
their accumulated wealth and it has significantly stifled Swedish productivity.
Nordic-style policies advocated by Sanders have
(predictably) restricted Sweden’s growth for decades. The notion that we can implement
Nordic socialism in a nation of 320 million people without destroying labor
mobility, taxing capital out of existence, and absolutely crippling innovation
where it’s needed most is pure delusion.
Sweden is slowly returning to its
productive capitalist roots. We should do the same.
http://www.zerohedge.com/news/2015-10-18/problem-bernie-sanders
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