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The big, enlightened, compassionate central government in Stockholm doesn’t let market forces get in the way of its universal healthcare, enviable schools, and guaranteed cradle-to-grave financial security…
…I honestly thought that’s what this documentary was going to be about. But charming Swede Johan Norberg has a different perspective. He argues that Sweden is better than the United States because it is more committed to free market capitalism.
The hero of this story is – you guessed it! – Anders Chydenius.
In the 18th Century, the average Swedish peasant was worse off than during the Viking era a thousand years before. Chydenius, a Lutheran minister, argued that the only way to improve the lives of Swedes was to grant them freedom.
Decades before Adam Smith and Thomas Paine, Chydenius demanded that government get out of the way and allow freedom of the press and freedom to produce and sell goods.
By 1950, Sweden had gone from one of the poorest countries on earth to one of the richest. Its citizens were inventive and industrious. Then they almost threw it all away.
According to Johan Norberg, the 2nd half of the 20th Century was an experiment in statism gone horribly wrong.
There was a law forcing corporations to give a percentage of their profits to labor unions each year. Sounds pretty good, right? Except the unions were forced to spend that money on shares of the company’s stock. In other words, the innovators who founded companies were losing control and private ownership was going away. The founder of IKEA moved his company to Switzerland in response.
A cradle-to-grave welfare state was created. Sounds pretty good, right? Except taxes got so high that famous Swedes were disowning their country. Sweden’s most beloved author, Astrid Lindgren (“Heidi”), announced that Stockholm was bleeding her dry with the 102% tax she was paying on each book sold.
When Sweden was on the brink of a Greece-style collapse, the major political parties agreed to cut taxes, slash regulations, and significantly reduce Stockholm’s role in Swedish life.
Swedish parents get voucher money so that they can send their children to whatever school they choose. Now more than half of Swedish students attend private school.
The healthcare system was largely denationalized. It is now run at the local level with private companies providing most of the services.
There is no minimum wage in Sweden. However, Sweden’s private sector labor unions voluntarily reformed and started focusing on helping the average worker rather than conducting hostile corporate takeovers. Unions and businesses have a symbiotic relationship now, and the result is a living wage for workers.
Some say that the American rich don’t pay their fair share. If they mean Buffet and Bezos, that’s certainly true. The upper middle class and working rich, however, shoulder an outrageous tax burden. Nearly 37% is taken by the feds. Nearly 10% is taken by Montpelier. Then there’s the thousands taken in property tax. Meanwhile, the bottom third of Americans pay almost nothing.
Sweden, believe it or not, has a much more regressive tax policy. A huge chunk of federal revenue is derived from its 25% Value Added Tax on purchases.
And check this out: Sweden still pays a pension to older citizens, but the system can never go broke because the amount that is paid is directly tied to how productive the country is that year. If Sweden’s businesses are thriving, the social security check rises. If companies are not doing well, the government checks shrink accordingly.
“We all want a piece of the cake,” a Swede explains. “But we need to make sure the cake gets baked first.”
Republicans and moderate Democrats will enjoy this breezy, happy movie. Progressives will view it as Capitalist propaganda, and they may be right.
But “Sweden: A Lesson for America?” powerfully argues a fundamental truth of humanity. The backbone of a thriving country is its private industry and a labor force that is small enough or organized enough to demand a living wage.
Strong central government can never create a great society. And it has an ugly track record of making things worse.