Sunday, May 21, 2006

Swedish Socialism Update

Sweden has not quite twice the population of Wisconsin, so there may be lessons in their failing attempt to maintain “a vital market economy alongside a large welfare state”.
Swedish Economics: Sweden is in a sense an ideal natural experiment in economic policies. Sweden was an impoverished nation until capitalism was introduced in the country during the 1870s. … During the 60s the socialdemocrats radicalized and a rapid expansion of taxation, the regulatory burden and government occurred. Sweden became the country with the most extensive welfare state in the world, the highest taxes, the strongest unions and the longest period of one party rule (the socialdemocrats have been in power 60 of the past 69 years).

The disadvantageous climate for business in Sweden is demonstrated by the fact that the number of employees in the private sector is today some 100 000 less than for 30 years ago, although our population has grown by more than one million during this period.

The political right in Sweden has for some time complained about the government hiding the unemployment in the above mentioned “programs”. But the question only came to the public knowledge when LO, the immensely powerful blue-collar union, had one of its own turn against them. Hans Karlsson, a leading leftwing economist, concluded that true unemployment was more in the ballpark of 20-25 percent.
Officially the Swedish government claims a 5.2% unemployment rate but they also control the official classification of worker status. This means they can categorize non-working adult individuals as “early retirement” or “sick leave” so that non-employed adults don’t count as unemployed adults. Of course, numbers don’t lie and statistics are merely numbers.