What Inferiority Complex? The Swedish Welfare State

We don’t need no stinkin’ US style capitalism!  Sweden tells Europe to hold its head high:

In defense of the welfare state, by Jonathan Power, International Herald Tribune:  (Stockholm) The statistics had arrived on the Swedish prime minister's desk … It was good news. Goran Persson, now in his ninth year of office, told me that the growth rate for this year will be near 3 percent and next year more than 3 percent - enough, he said, to maintain Sweden's trajectory of the last decade, which was "above the average for the European Union" and, in particular, "as good as the Anglo-Saxons, Britain and the U.S."  ... This raised the first question - how does this self-confessed socialist state do it? What is the secret for success when Swedish taxes are the highest in the world and the welfare state is the country's single largest employer? After all, when Persson came in as finance minister in 1994 the country was reeling economically, as state expenditures on the health and social sectors raced ahead of the country's ability to generate wealth.  

"If you have a free economy," explained the prime minister, "a highly educated work force, a very healthy people, very high productivity and a sound environment then you can create the critical size of resources to create good growth. "That has to be joined with adequate public financing of universities, research and development. As long as we are efficient and constantly challenging ourselves we continue to be productive. "Then if we produce successful growth, the government gets the public's support for high taxes. If the quality of the public sector is good, then a prosperous people will continue to vote for funding it."  

The Social Democrats have been in power for most of the last 73 years. But recently public opinion has turned away from the government, partly because of the prime minister's apparent dictatorial style and partly because of a series of scandals including his slow response to the tsunami, when hundreds of Swedes on vacation in Thailand died. ... Many have observed that Sweden cannot sustain its generous womb-to-tomb system if so many Swedes abuse the system by calling in sick and claming unnecessary disability leave. On an average day, one-fifth of the potential workforce is claiming these rights, in a country that along with France and Japan is the healthiest in the world. "I had a new report on my desk today to show that we are getting these figures down," [Persson] said. "It is now under control. We have given employers an incentive to convince their personnel to return from sick leave by offering them a tax benefit if they succeed. … At the same time, we have been scrutinizing those doctors who have been too generous in signing sick notes."

Persson … ends the conversation with two quick jabs. "Europe has a lack of confidence vis-à- vis the U.S.," he said. "The U.S. is competitive, but not as competitive as we think. We are too self-critical in Europe, even though we have a much better social system and in Sweden are just as productive. On unemployment, it is overlooked that the U.S. has approaching two million people in jail and out of the labor market."…

Comments

[Hinterlands]

My thought only critical thought of the article is the last paragraph qutoed. Any comparison numerically between Sweden and the United States in terms of imprisoned and crimimal acivity will alway make the US look bad (A closer comparson would be a comparison between EU and US for numerical purposes)

I do realize that on a percentage bases the US also would do very poorly against Sweden and most other northern European states on most liviblity statisics so I am not faulting the general thrust of the article. I am just getting tried of people give numbers with no statistical context.

[Bruce Webb]

Here is the context you asked for:
http://www.sentencingproject.org/pdfs/pub9036.pdf
Comparative International Rates of Incarceration:
An Examination of Causes and Trends
p. 2 US 792 per 100,000 Swedan 75 per 100,000

For the record I don't see the Prime Minister directly contrasting numbers, he cites a single number, a number that is accurate. He could have piled on and given an absolute number for Swedan, one that would have been distorted by the differences in population you cite, but in point of fact he didn't.

We are locking up people at ten times the rate of Sweden. Would the Prime Minister have been doing us a favor by providing that numeric context? If anything he was pulling his punches here.

[Dave Schuler]

I think that the Germans, French, and Swedes are entitled to have any kind of society they want to have. I think the same about us here in the United States. European governments tend to have significantly more ambitious programs of social services than we do here in the US. And, once again, that's their choice. And ours. Pointing out that their social services presume either faster population growth or faster economic growth than they're currently experiencing is just telling them to put the red Jack on the black Queen. There's no need to get truculent about it.

[ken melvin]

They have dealt with many of those things that we are just beginning to come to face with. Probably, they are where we're headed, perforce.

[anne]

Still, the most interesting of perspectives for me:

http://www.irs.princeton.edu/krueger/02_05_2004.htm

February 5, 2004

Some lessons from Sweden on the pros and cons of privatizing Social Security.
By ALAN B. KRUEGER - New York Times

"YOUNGER workers," President Bush said in his State of the Union address, "should have the opportunity to build a nest egg by saving part of their Social Security taxes in a personal retirement account."

According to former Treasury Secretary Paul H. O'Neill, the president believes that the reason he was elected was his bold -- some would say risky -- stance on replacing part of Social Security with personal accounts. If the president holds onto office in November and his party continues to hold Congress, the creation of some sort of personal retirement accounts as part of Social Security seems likely.

Although it is impossible to know what form such accounts might take, in 2000 Sweden instituted a system of personal accounts that holds many lessons for any country seeking to reform its retirement system.

Sweden now has a blended system, an approach Mr. Bush apparently favors. Employers and employees contribute a combined 16 percent of payroll toward a "pay as you go" retirement system like Social Security, and an additional 2.5 percent toward individual retirement accounts. Those born after 1954 are fully in the new system, while older workers are phased in....

[cm]

Hinterlands: I'm not sure what your point is. That the speaker should have used percentages? Or percentage ratios? That would have opened the question about the reference number (i.e. what is the 100%). The absolute number has a higher information content (and is of course rhetorically more effective).

[cm]

Dave Schuler: I figure you never had to "choose" that you cannot pay for a needed doctor/dentist visit. But rest assured, you are entitled to this choice.

[anne]

Speaking of Sweden, rent some Ingmar Bergman :)

[anne]

And, oh my :)

http://www.nytimes.com/2005/04/04/arts/04hans.html?ex=1270267200&en=00fbfb104ee1fb7d&ei=5090&partner=rssuserland

April 4, 2005

And the Cobbler's Son Became a Princely Author
By ALAN RIDING

COPENHAGEN - In his lifetime, Hans Christian Andersen was Denmark's most famous native son. Yet even after his fairy tales won him fame and fortune, he feared he would be forgotten. He need not have worried. This weekend, Denmark began eight months of celebrations to coincide with the bicentenary of his birth. And it is eager that the world take note.

The festivities began here on Saturday, Andersen's actual birthday, with a lively show of music, dance, lights and comedy inspired by his fairy tales before a crowd of some 40,000 people - including Queen Margrethe II and her family - at the Parken National Stadium. It will be followed by concerts, musicals, ballets, exhibitions, parades and outreach education programs costing a total of $40 million.

So more than in recent memory, Danes - and, they hope, foreigners - will be reliving the humor, pain and lessons to be found in evergreen stories like "The Little Mermaid," "The Emperor's New Clothes," "The Ugly Duckling," "The Little Match-Seller," "The Steadfast Tin Soldier," "The Shadow," "The Princess and the Pea" and others among Andersen's 150 or so fairy tales.

In organizing this extravaganza, of course, Denmark is also celebrating itself: after all, Andersen still is this country's most famous native son. In trumpeting his name and achievements, it is therefore not only drawing attention to its contribution to world culture, but is also hoping to woo more foreign tourists to visit his birthplace in the town of Odense and to be photographed beside the famous bronze statue of the Little Mermaid in Copenhagen's harbor.

Denmark, however, has more in mind. Local guardians of the Andersen legacy evidently feel his stories have lost ground in recent years to the likes of J. R. R. Tolkien's "Lord of the Rings" and J. K. Rowlings's Harry Potter series. Andersen's fairy tales may remain central to the Danish identity, serving as homespun guides to the vagaries of human behavior, but what about the rest of the world?

"What we really need is a rebirth of Andersen," noted Lars Seeberg, secretary general of the Hans Christian Andersen 2005 Foundation. "Two centuries after his birth, he still fails to be universally acknowledged as the world-class author he no doubt was. In blunt terms, Andersen's fame stifles his wider appreciation. His name puts smiles on peoples' faces around the world from China to the United States, but the smile is one of childhood nostalgia and memories of bedside storytelling."

Certainly, Andersen himself hoped for more....

[gary lammert]

Limited

I am riding on a limited express, one of the crack trains
of the nation.
Hurtling across the prairie into blue haze and dark air
go fifteen all-steel coaches holding a thousand people.
(All the coaches shall be scrap and rust and all the men
and women laughing in the diners and sleepers shall
pass to ashes.)
I ask a man in the smoker where he is going and he
answers: "Omaha." Kindly visit
The Economic Fractalist http://www.economicfractalist.com/

[Movie Guy]

I found Sweden to be a boring country. Nice people and so forth, but the economy goes to sleep early each evening.

If faced with a choice, I would live in Denmark, Norway, or The Netherlands over Sweden. At least among nothern European nations.

Comparing Sweden or any western European countries to the USA is a futile exercise, though. Their approach to living is quite different. Their lives and social experiences extend far beyond being part of a large production machine. That's about all I see back here in the States.

We're in a big hurry going nowhere. And our time away from the production game is not only limited, but filled with unnecessary pressures as we attempt to pack in as many activities as possible.

America has become the land of franchises. That, too, is almost as boring as Sweden.

[slothrop]

Yet another arrow in the canard that high taxes stifle growth.

[Norman]

What motivated the Swedish PM to go through this comparision? We in the US really don't care about Sweden nor for that matter the rest of Europe but they care a lot about us. We are a 'live and let live' country. Run your business how you like just don't bother us. The PM though should consider our military expenditures and the people so taken up in defense. After all, when the Balkans were going crazy the Europeans came begging for our help. Anyway, we Americans wish them only the best and if they do something that works we'll be the first to copy it and give them the credit.

[evagrius]

Norman, Americans never give credit to anyone for what they think they discover on their own. They just buy it with borrowed money and think they've made it.

[Mikael]

Well, the PM of Sweden could also have mentioned that by creating a very large labor market policy program they are hiding a lot of the unemployed in silly programs were a lot of people sit around doing practically nothing. An analyst at the biggest union in Sweden argued that including these people (and people on sick leave that actually could work), the unemployment rate would go from 6% to something like 10-15%. Oh by the way, he got fired after writing that memo.

I would also like to add the impossibility to compare countries such as the Scandinavian ones with the US. Even though I favor my home country (SWE), it must be admitted that it is still an extremely homogenous society, especially compared to countries such as the US. I think this can explain a lot concerning inprisonement etcetera.

To Movie Guy: Okay, I can understand the Netherlands. But Norway? Every city there goes to sleep after 6pm (no wonder, given that beers cost you around 10-15 USD in the pub).

[Dave Schuler]

cm:

I've been poor and I've been sick. I've had to make exactly those choices you tell me I've never had to make. I spent my first ten years in the toughest neighborhood in St. Louis with a brothel on one corner of the block we lived in and a bar on the other and a woman who ran numbers next door and a guy who sold drugs across the street.

If you'd read things I actually wrote you'd know that I'm no anarcho-capitalist. I believe in Social Security and in helping the other guy. I also believe in working and not depending on the government unless you absolutely must.

Look, if you want to live in Sweden go aheadis anybody stopping you? If you don't, shut your cakehole. My point is that there's room for diverse solutions to the problems of living around the world. Do you believe that or not? If you don't, so much the worse for you.

[anne]

Well, I took my own advice last night and watched 'Fanny and Alexander' and 'Cries and Whispers.' Now, if you do not know Ingmar Bergman's films this is the time to learn. A wonder.

[anne]

http://travel2.nytimes.com/2005/06/12/travel/12finland.html?ei=5070&en=af04e757a2c7f95a&ex=1121140800&emc=eta1&pagewanted=all

June 12, 2005

After Sibelius, Finland's Rich Bounty of Musicians
By RICHARD B. WOODWARD

WHEN you live in a country of only 5.2 million people and your native tongue is unintelligible to virtually everyone outside your borders, you'd better learn to converse with the rest of the world if you don't want to end up talking to yourself.
This is the problem faced by the Finns, and among their many admirable traits has been shrewd adaptation to this exigency. While they hold dearly to the foundations of their national culture, such as the ''Kalevala'' epic, they also compete internationally in an eclectic array of fields, from cell phone technology to javelin-throwing, and from contemporary architecture and design to ski-jumping.

The Finns' recent emergence as a power in classical music is another case in which they have mastered a lingua franca. Defying a trend in many Western countries, where audiences are dwindling and the tradition itself seems in retreat, Finland has in the last 15 years developed first-class classical musicians out of all proportion to its size. Steady investment in music education by the government has created generations of avid listeners and, according to official figures, more orchestras per capita than anywhere on the globe.

Finland's tiny market guarantees that a number of its musical stars must be exported....

[anne]

Educationally among the soundest countries of all, ecologically among the soundest, among the most competitive of countries. What's not to like in the Nordic countries? And, I suggest getting to know Finnish music for a special treat. Notice what education can mean?

[Anders Widebrant]

"Anyway, we Americans wish them only the best and if they do something that works we'll be the first to copy it and give them the credit."

Perhaps Sir would be interested in a health insurance system that provides the same quality and quantity of health care as Sir's current system, but at half the cost, while providing universal coverage?

No? I see, Sir. Moral hazard, indeed.

[Bruce Webb]

"You know? The French don't even have a word for entrepreneur."

Maybe Bush said it, maybe he didn't. Blair denies he passed the story on, but then if confronted he would, it wouldn't be the first time he covered for Bush.

But it reveals a bigger point. Most people on the Right just seem bone ignorant about the realities of daily life in Europe or the rest of the world. Which wasn't so bad back in the fifties when the Republican Party was dominated by isolationists. Now that they have hitched a conviction of American Surpremacy in All Things with a Total Disdain for "Old Europe" with "My Aunt in Duluth is a little nervous, lets bomb the carp out of Iran to make her feel safer" you have to feel scared.

Take the example of health care that Anders brings up. A lot of people on the Right explain that poor people get care anyway, they just show up at the Emergency Room. Case closed. Leaving aside the fact that this is a prodigiously wasteful use of very expensive Emergency Rooms, the bill doesn't magically go away. The Hospital bills you, you don't pay, they turn it over to a collection agency and you still don't pay because you can't afford thousands of dollars, eventually the collection agency gives up, and the Hospital writes it off. And sure enough the next time you get sick they will still treat you.

But meanwhile your credit rating has been trashed beyond repair. You will never qualify for a mortgage, you will never be able to buy a new car, which means you buy beaters for cash, and put more into them for repairs than a car payment would cost because you got to get to your job.

The bland argument that the Emergency Room's legal obligation to treat you somehow equates to Universal Coverage is simple lunacy. Yet you here it everytime the topic comes up.

The French and Germans were right on Iraq. In their heart of hearts the Right knows this and it is tearing them apart. The result is the kind of defensive lash out revealed here.

[Bruce Webb]

Thanks Anne, I loved this quote the first time it came around.

"Sweden now has a blended system, an approach Mr. Bush apparently favors. Employers and employees contribute a combined 16 percent of payroll toward a "pay as you go" retirement system like Social Security, and an additional 2.5 percent toward individual retirement accounts."

You let me take the combined contribution from current 12.4 to 16 percent and then add on another 2.5 percent on top of that and I can supersize Solvency. This is a combined 18.5% rate. I hope no one is tempted to use this a model to sell private accounts, the current payroll gap is only 1.92 points which would translate to 14.32%. Of course private accounts work if we boost the payroll tax by 50%. Which oddly enough if the exact 50% privatizers are threatening us with if we do nothing between now and 2041.

This pops up over and over. "Private Accounts in Chile Work. Or Britain. Or some County in Texas". Except on examination they really don't, unless you are lucky, or happen to be a top paid worker. "Private accounts in Sweden work" Yes when accompanied by a much higher contribution.