Swedish Models

Assar Lindbeck, professor of international economics at Stockholm University, looks at Swedish models. He has a favorite:

A torrid tale of three 'Swedish models', by Assar Lindbeck, Project Syndicate: Sweden's economic and social system, sometimes called the "Swedish Model," is often depicted either as an ideal or an abnormality. But Sweden's system has varied considerably. In fact, broadly speaking there have been three different Swedish "models" since the late 19th century.

The first model lasted from about 1870 until the 1960s. During this "liberal" period, the government basically provided stable market-supporting legislation, education, health care and infrastructure. As late as 1960, both total government spending (as a share of GDP) and the distribution of earnings were similar to those prevailing in the United States.

During this century-long period, Sweden moved from being one of the poorest Western countries to being the third-richest country in terms of GDP per capita. In other words, Sweden became a rich country before its highly generous welfare-state arrangements were created.

A second era lasted from 1960 until 1985. The free-trade regime of the liberal period was retained during this period — indeed it was deepened... — but the dominant thrust was the creation of a generous welfare state.

By the late 1980s, total public spending reached 60 to 65 percent of GDP, compared to about 30 percent in 1960. Moreover, marginal tax rates hit 65 to 75 percent for most full-time employees, compared to about 40 percent in 1960...

Economic incentives to work, save and start businesses were also reduced through the compression of wage differentials and a big squeeze on company profits, both largely the result of strong and centralized labor unions.

Moreover, new labor-market regulations were introduced, the most important being strict job-security legislation implemented in the early 1970s. ... It is this economic and social system that is usually identified as the "Swedish model."

Although economic performance during this period was not dismal, it was certainly not impressive. ... As a result, Sweden fell from third to approximately 17th place in the Organization for Economic Cooperation and Development in terms of gross domestic product per capita. This can partly be explained by the "catch up" mechanism, as technologically less advanced countries imported technology from more advanced countries. But this does not explain why 14 countries not only caught up with Sweden..., but surpassed it...

The removal of capital-market regulations and foreign-exchange controls in the late 1980s, and Sweden's entry into the EU in the early 1990s, signaled a new era — the embryo of a third Swedish model. In 1991, marginal tax rates were cut by 10 to 20 percent... These reforms had broad political support... Subsequently, ... several product markets were deregulated: telecommunications, electricity, road transport, taxis and, to some extent, railways.

A process of deregulation and privatization, although with continued tax-financing (in fact, basically a voucher system), began in the field of "human services," in particular for child care, education and old-age care. One purpose of this was to increase competition and freedom of choice.

Partly in response to these reforms, Sweden's growth rate picked up from the mid-1990s, and today about a third of the previous lag in GDP per capita since 1970 ... has been recovered. However, Sweden is still characterized by high welfare dependency, with about 23 percent of working-age people in recent years living on various types of government benefits, including temporary and permanent disability payments.

The new center-right government elected in the fall of 2006 has committed itself to continuing economic liberalization. The government has announced plans to privatize state-owned companies, improve conditions for small firms, and continue increasing individual freedom of choice in the case of human services. It has also abolished the wealth tax (after the previous social-democratic government had already abolished the inheritance tax).

Moreover, the government has modestly reduced taxes on wages and slightly scaled down the generosity of some benefits. One argument for the latter policy is to improve the government's budget, another to make work more economically rewarding relative to government benefits.

Indeed, in important respects, today's Sweden is moving back to the liberal economic regime that existed before the explosion of government interventionism in the 1960s. But there are two basic caveats:

All political parties agree that welfare-state arrangements should remain tax-financed, although possibly with a stronger application of insurance principles... So even if the generosity of state benefits may be curtailed, aggregate government spending is unlikely to be rolled back dramatically from the current 53 percent of GDP.

There is general agreement that the government should take more active responsibility for environmental issues, although policies in this area increasingly rely on market instruments ... rather than on quantitative regulations.

Clearly, some of these policy measures may conflict with traditional egalitarianism in Sweden, at least in the short term. Hence, the big question underlying the current wave of liberalization is whether these reform tendencies are politically sustainable. The next general election in 2010 will give part of the answer.

[See "Lessons from the North on Economic Security and Economic Performance" for a more favorable view of the "Nordic Model."]

Comments

[Bruce Wilder]

The idea that a single "liberal" economic regime can be said to have held for the whole period, 1870-1960, boggles the mind. Those dates cover the industrial revolution in Sweden, as well as the development modern democratic institutions. Most conventional histories would date the welfare state from 1940, when the Social Democrats had secured political dominance.

[Tom Geraghty]

Yes, a very selective history economic history of Sweden.

He forgot to mention some other things. Although Swedish per-capita GDP peaked in the mid-1970s as a percentage of the US level, the ratio of the two countries UN human development indices has remained stable over that time. Swedish labor productivity growth has continued to outpace that of the US (according to OECD figures, Swedish labor productivity was 61% of the US level in 1950, 78% in 1973, and 86% in 2003). Per-capita work hours in Sweden, in 1950 fully 26% higher than in the US, fell to 10% below US levels by 1998, so maybe the Swedes are taking some of that increased labor productivity as increased leisure.

There's more: Swedish public spending on subsidies and transfers was already 50% higher than US levels as early as 1960. The Rehn-Meidner model of active labor market policy and wage equalization dates back to the 1950s and did not prevent Swedish per-capita GDP from converging to US levels through the mid-1970s.

[Lafayette]

AL : new labor-market regulations were introduced, the most important being strict job-security legislation implemented in the early 1970s. ... It is this economic and social system that is usually identified as the "Swedish model."

The above is what characterizes most the Swedish model, job protection and welfare.

These points were brought out vividly in the recent French presidential elections. The Socialists, bereft of any new ideas, harped about the Swedish Model. Meaning maintain the generous welfare subsidies, maintain the heavy social charges on labor rates, and therefore maintain the fact that French industry is not hiring but off-shoring.

The French saw this for the “canard” that it was. It didn’t wash, and their candidate was roundly defeated. Sarkozy will not reduce basic entitlements all that much, but he expects to loosen constraints on hiring (meaning essentially a better ability to lay-off personnel without astronomic penalties). The French had assumed that the lifetime employment that their parents enjoyed during the post-war years should continue forever into the future. The past fifteen years has taught them how wrong they were.

Moreover, they have adopted a propensity to sacrifice pay for tenure, meaning work for a mediocre salary but in a state job that guarantees life employment. Sad, ‘tis sad. This is not the recipe for a dynamic society. Which is why Sarkozy hammered home his principle message: “Work more to earn more”.

Fortunately for the French and the Swedes, they have nominal productivity (output per hour worked) that is similar to that of the U.S. Unlike the US, however, neither works as many hours annually – but about 15% less. Therein lies all the difference.

So even if the generosity of state benefits may be curtailed, aggregate government spending is unlikely to be rolled back dramatically from the current 53 percent of GDP.

France is at about 43% of GDP in this important statistic. The US, I think, somewhere around 30%, perhaps more since the Iraq quagmire has begun.

What is surprising about Lindbeck’s analysis, which, I grant, is well explained, is this: It does not touch upon income distribution. What percentage of wealth is earned by the top 5 percent of the population?

(I cannot find income distribution data for either France or Sweden. Though, Pickety started his career in economics doing income distribution studies in France and Switzerland, before doing the same stateside. The US study of income inequality is here and in English.)

It would be interesting to see a study comparing both Europe and the US. I am almost sure that one would see Europe with far less wealth accumulation at the top – which is why its array of public services is so much more … “rich”.

[Lafayette]

TG: Per-capita work hours in Sweden, in 1950 fully 26% higher than in the US, fell to 10% below US levels by 1998, so maybe the Swedes are taking some of that increased labor productivity as increased leisure.

Here's the OECD data for 2004, in percentages:

Country ----- Hours Worked ----- GDP/ hour worked
US ---------- 100 ------------------- 100
France ------ 89 -------------------- 101
Sweden ----- 94 -------------------- 89

So, the French work less and obtain a higher GDP productivity than the US. Whilst the Swedes work more but obtain a lesser productivity.

(Which surely explains why the birth rate of French women is more than that of the Swedes. Ah ha! I knew the French were up to something ... ! ;^)

In fact, I suggest the above indicates that the number of hours worked is not the only factor in determining productivity. It is possible that work techniques/processes and technology usage may also be important factors - but to what extent remains a mystery (to me).

The only striking difference between France and Sweden, in terms of the sectors generating GDP, is that agriculture is a higher component in France than in Sweden. And, I doubt farmers in either country are contenting themselves with a forty-hour work week.

[robertdfeinman]

Once again the implicit bias of the author towards "growth" informs what he thinks are good policies.

Perhaps Sweden got to a point where enough people were living a good enough life that "growth" was no longer a primary goal. Isn't it possible for a society to achieve its aims and then just enjoy what they have created?

The push for continual growth when the standard of living is high enough reflects the interests of the investor class, which wants ever more. There are other ways to structure one's life.

I had a co-worker once who worked as a high-priced consultant for several months until he had accumulate as much money as he needed to live the rest of the year in the south of France. When the money ran out he came back for another fill up.

Why can't capitalists ever be satisfied?

[reason]

Robert D Feinman...
much as I would like to agree with you, I think the Fillip for reform came from increasing unemployment.
But as for growth, part of the problem is that you can't just sit on your laurels. Whatever comparitive advantage you have that is not based on raw materials can be eroded (and raw materials can be used up), so that terms of trade changes will see your income falling if you don't try to progress. A completely automatous economy could ignore this, but not one integrated into the world economy.
I get the feeling sometimes that US Liberals of a particular vintage forget how integrated the world is. I grew up in Australia and so have a somewhat different perspective. I keep thinking the best advice to offer is the following: always ask does what I am saying also make sense for New Zealand? Don't let the current position of the US as having a reserve currency fool you. That can (and probably will) change.

[robertdfeinman]

Reason:
I'm not sure what you man by "comparative advantage". Advantage for what? Let's say that Sweden trades Volvos with China for rice. Some day in the future China makes something equivalent to Volvos themselves. What happens?

One possibility is that more people in China can now buy this type of vehicle. Another possibility is that Volvos have improved so that they still sell in China into the "real" Volvo niche. Neither scenario implies that the market for Volvos has to increase, nor that workers in Sweden have to see their standard of living decline in order to compete (on price).

Trade doesn't have to lead to growth if both sides are satisfied with the present arrangement.

[reason]

Robert,
This only works if Volvos are improved (implies effort from Sweden) more than competing models (Skodas)are improved so that the real price stays the same.

[ken melvin]

It's those damned trees. Social democracies evolved as a way to compensate for the decreased leverage of labor. They offer a way of dealing with the loss of political parity for the common man. Neither France, Sweden, nor the US will ever again have enough jobs as jobs are currently defined. What Sweden and France are doing, consciously or subconsciously, is adjusting to reality. The US is in deniality.

[Tom Geraghty]

reason says...

. . . you can't just sit on your laurels. Whatever comparitive advantage you have that is not based on raw materials can be eroded (and raw materials can be used up), so that terms of trade changes will see your income falling if you don't try to progress.

World Economic Forum Global Competitveness Rankings, 2006-07

1. Switzerland
2. Finland
3. Sweden
4. Denmark
5. Singapore
6. US
7. Japan
8. Germany
9. Netherlands
10. UK

[anne]

http://www.mscibarra.com/products/indices/stdindex/performance.jsp

National Index Returns [Dollars]
12/31/96 - 12/31/06

Australia 12.8
Canada 13.5
Finland 17.4
France 11.9
Germany 9.7
Hong Kong 5.2
Japan 2.3
Netherlands 8.3
Norway 13.2
Sweden 13.3
Switzerland 11.5
UK 8.8
USA 8.3

[Sweden also seems thoroughly competitive from another perspective.]

[reason]

Tom Geraghty...
did you read the thread. Please, quote figures from the 1980s if they are to be relevant. Sweden has adopted more pro-growth policies in the last couple of decades.

[Lafayette]

rdf: Once again the implicit bias of the author towards "growth" informs what he thinks are good policies.

I doubt it is the bias you may have in mind. Meaning this, the Swedes are not addicted to growth as are, say, the Americans or Singaporeans or maybe Australians.

Most Europeans, I think, understand that growth is not essential to more happiness, but very important to maintaining well-being in a growing population. They are quite willing to accept growth that maintains a modest well-being (some call it welfare, but unlike that word's connotation in the US), and simply unwilling to make the sacrifice for growth-at-all costs.

But, America is positively fixated on growth in hyper-frenetic fashion. Bigger is always better, more is always marvelous and too much is never enough.

This is a cultural attribute, of which I am almost certain. The constant query that I get, as an American living in Europe, from Europeans is: "Why are you Yanks never satisfied?" (Coming from the French, that is really quite odd. Whining is a national pastime, here.)

Mind you, the query is no reproach. Just an impression. I've known many a European who've lived in America and highly enjoyed working there. But, they return to Europe where they find life more low-keyed and less frenetic.

More refined, as well. But that is altogether another question.

[robertdfeinman]

Reason:
If you read the ecological economists like Herman Daly you will find that they separate growth from improvement. One is quantitative, the other qualitative. They see no limits on qualitative growth which is why they are willing to call what they advocate "sustainable development". I prefer the term "steady-state" because it implies that the amount being consumed is equal to the amount that can be renewed. Ultimately we only have two sources of input to the earth.

The most important is the sun, and the second is the heat of the core. Our ability to capture enough sunlight is just now being investigated (outside of agriculture, of course) and geothermal energy is only of use where it is near the surface as in Iceland.

Everything else on earth is a closed system. If we use up the deposits of a mineral the material is still there, but has now become so diffuse that it can't be reclaimed economically. Look up the amount of gold in the oceans as an example.

What I'm leading up to is that we need to get away from consumerism and look for other things to value in life.

[paine]

this august swede
has a polemical streak
two clicks wide
btw
as the folks behind
these very informed comments here
prolly already know
the academic econmists
" mafia"
in sweden
is to the right
of the social democrats
on econ con policy

btw
sweden kept currency rate flex
and could devalue toward trade balance
whereas even
the pre euro snake
in the 90's
started constricting its inmates

[Lafayette]

rdf: geothermal energy is only of use where it is near the surface as in Iceland.

Not so. I am presently heating my house using geothermal energy and I live at a latitude similar to Boston.

At one meter below the surface, the average temperature is 18°C. With adequate heat capture and a heat pump, there is more than enough heat for for both ambient and water heating.

Heat pumps have been around for a donkey's age. The price of petrol has suddenly made them look very attractive. Also with government subsidies, they will become even more so. In France, a tax payer receives a tax credit amounting to half its cost of installation.

Any rural population can access geothermal heating with present technology. In fact, it is selling like hotcakes in Europe - but Europe has had higher energy costs since a great many years. So, it is most pertinent here for exploitation at present.

PS: And, contrary to solar panels, the heat is there even on cloudy days.

[Lafayette]

rf: What I'm leading up to is that we need to get away from consumerism and look for other things to value in life.

I quite agree. But how? What other things, of mercantile value as either products or services, generate employment?

Without consumerism, there is no motor to the economy. None, nixt, nada, niente.

As much as one may decry the idiocy of some aspects of consumerism, especially the throw-away variety, it creates employment. Even if in China, it is the heart-throb of any economy.

Reinventing life-as-we-know-it is far more complex than estimating how many angels can dance on the head of a pin.

[robertdfeinman]

Lafayette:
Heat pumps are not geothermal energy although they may extract some of the natural heat from below the frost line.

As to doing away with consumerism. Yes, this is a difficult subject, which only means that more bright people should think about it.

One of your implicit assumptions was that we have to keep people employed. I suppose that in any kind of society I could envision people would need to do some work, but in advanced societies people do more than they need just to be able to spend on things they don't need.

I always am reminded of Herman Melville's book "Typee" where he describes life on a south sea island. The inhabitants did some cultivation of things like bread fruit and did some fishing, but once they had enough to eat, some basic clothing and shelter they spent the rest of their time on other things (like sex, ceremony and sleeping).

I'm not advocating a return to nature, but even today in parts of Europe one can find people who trade material wealth (and the time it takes to acquire it) for socializing at the local bistro.

[Suvi]

"I cannot find income distribution data for either France or Sweden"

Someone ought to be able to help with that, but if no one does, check out the child poverty levels the various countries tolerate

[DRR]

Good thread.

[Lafayette]

rdf: Heat pumps are not geothermal energy although they may extract some of the natural heat from below the frost line.

Unless there is some loss in translation, which I seriously doubt, they are classified for tax purposes exactly as geothermal energy (la géothermie) in France. A heat pump is only the mechanism for extraction and compression to a higher temperature for eventual redistribution internally within a building/house.

but in advanced societies people do more than they need just to be able to spend on things they don't need.

Then our society is perhaps not as advanced as we might think.

I can think of Amazonian Indian tribes that are really quite happy with their existence and have few qualms about it. But, the rest of the earth seems to be inhabited by people constantly in the search for more, not less.

Methinks.

[Bruce Wilder]

robertdfeinman: "One of your implicit assumptions was that we have to keep people employed. I suppose that in any kind of society I could envision people would need to do some work, but in advanced societies people do more than they need just to be able to spend on things they don't need."

And, in American society, at least, an awful lot of people are employed convincing people to buy things they don't need.

I see that James Galbraith posted his recent lecture to the Canadian Economic Association's Progressive Economics Forum.

John K. Galbraith's views on advertising and marketing, lo these many years ago, provoked my old teacher, Demsetz, into a mania on the subject. Galbraith's views on the subject had an important defect, which is not repaired, in son James's reiteration and call to glory. That defect is that Galbraith's view were more descriptive than analytical, and because they were not analytical, it was hard to take a different point of view, and still get anything out of what Galbraith wrote. If you took Galbraith's point of view, then, of course, things looked to you the way they looked to Galbraith, and it was easy to assent to his description. But, if you didn't, as Demsetz, a reactionary libertarian, did not, then Galbraith was just so much subjective horse pucky.

I think that's too bad. Advertising and marketing have advanced since Galbraith's day, taking over more and more of the culture. I can only imagine the droll commentary Galbraith would inflict upon the transition from naming sports stadia as war memorials to naming them for popular consumer brands.

But, the deep analytical point, which Galbraith, unfortunately, did not press, is that advertising -- particularly, mass advertising by broadcast means -- is a public "bad" -- a negative public good, financed by private means -- which we ought to, as a matter of good public policy, limit and burden with taxes and regulation.

Instead, we foolishly embrace "free", when "free" means paid for by advertising. And, over-produce a whole lot of shoddy goods, which crowd out quality goods. This is especially true, and of acute importance, with regard to our news media, which is, almost universally, advertiser-supported, and, because of the various economic pressures associated with the advertising model, of dangerously poor quality.

The fact that so much employment is concentrated in advertising, marketing and salesmanship ought to trouble us, because it actually reduces the general welfare.

If we could find ways to dial back on the resources devoted to these activities, it would actually improve our overall welfare, since whenever leisure replaced the bad of excessive salesmanship and marketing, that would be a gain to society.

And, there would be corollary benefits, to the extent that we chose to ensure that important activities, like news dissemination, were not fatally undermined by an exclusive reliance on advertising.

[reason]

Bruce Wilder...
Excellent comment.

Lafayette
Without consumerism, there is no motor to the economy. None, nixt, nada, niente.

I disagree - exactly in the vane of Bruce - there are lots of quality things to do with our time and money. The rubbish crowds it out.

Robert D. Feinman...

I don't disagree with your general drift, just your specific example. I think there is a balance to be drawn between social cohesion and incentives, between the co-operative and the competitive, Sweden crossed it in the eighties and then came back again.

All...

Personally, I think that the way forward is to target sustainability within the market model. A few principles

1. Move taxes towards externalities, and raise them as early as possible in the product cycle. For instance I think the cost of disposal should be part of the price paid for a product.
2. Tax use of resources HARD.
3. Redistribution should be an aim, but it should not be done in such a way as to create poverty traps, or substantially affect incentives. Basic social infrastructure must be maintained in order to support equality of opportunity and there should be a safety net to encourage economic risk taking.
4. Lifetime education must be supported. Credentials should not be granted by the educator but by independent bodies. (Rediscover Ivan Illich)
5. We need to examine critically our institutional world. Constantly. There is too much concentration of power, and our financial institutions are dangerously disfunctional.
6. Perhaps more controversally on this forum, domestic investment should be encouraged by preferential tax treatment over consumption. How this is to be made compatable with 3 is a good question (inheritance taxes?)
7. An upper limit on working hours should be enforced, while a flexible model of time use is to be encouraged. Efficient use of assets is to be encouraged but competition in the labour market makes it impossible for people to balance work/life commitments. The imbalance in power between employees/employers needs to be recognised and conteracted.

[Lafayette]

BW: And, over-produce a whole lot of shoddy goods, which crowd out quality goods.

This is a subjective judgment and, though I would agree with your qualification of the nature of these goods, it is more largely a matter of cultural values.

When I came to Europe from America, I noticed how the "shoddy goods" that I was used to seeing on shelves in stores stateside where simply absent here. That was some time ago.

Since then, Europe has undergone an overall decline in net asset wealth per person and, as the poor have suffered most in that decline, lo and behold, there's the junk from China flooding the markets.

So, even if before it was a matter of culture, I must now admit that it is also a question of pricing - economic circumstances having changed.

[reason]

Re what Bruce Wilder was saying:

http://www.guardian.co.uk/comment/story/0,,2095325,00.html

[ken melvin]

What diff an economy based on consumption of necessary goods of good quality and one based on built in obsolescence and buying goods for the sake of ownership?

[Lafayette]

reason: I disagree - exactly in the vane of Bruce - there are lots of quality things to do with our time and money.

Perhaps, but in the aggregate they are not likely to create full employment in a nation of 300 million plus people.

[Lafayette]

km: What diff an economy based on consumption of necessary goods of good quality and one based on built in obsolescence and buying goods for the sake of ownership?

North and South Korea, for instance?

The difference should be obvious. It's called communist dictatorship.

[realpc]

"The idea that a single "liberal" economic regime can be said to have held for the whole period, 1870-1960, boggles the mind. Those dates cover the industrial revolution in Sweden, as well as the development modern democratic institutions. Most conventional histories would date the welfare state from 1940, when the Social Democrats had secured political dominance."

Bruce Wilder, you misunderstood. "Liberal" means the opposite of "socialist." How they became synonyms in America is a mystery. Sweden became rich through free enterprise, and started slipping because of socialism. So they started correcting the imbalance.

[realpc]

"our news media, which is, almost universally, advertiser-supported, and, because of the various economic pressures associated with the advertising model, of dangerously poor quality."

So let's have all news supported by the government!! Terrific idea. I mean, the government would always tell us the truth, right?

Get rid of all that stupid advertising. Stop selling things. Don't start a business. Who needs businesses and jobs? We can just have the government support us. We don't want to work anyhow.

The government can support us and provide our news. It will be heaven.

[Ben]

Lafayette: The system you refer to as a "heat pump" is typically referred to as a "ground-source heat pump" in the U.S. and is rare -- only about 40,000 were installed here last year (reflecting the general bias against initial cost in consumer decision making). Heat pump in common parlance refers to an air source heat pump.

[Lafayette]

"Heat pump in common parlance refers to an air source heat pump."

Your getting confused with words.

A heat pump is used to distribute heat. The central mechanism of geothermal/ambient air heating is the Carnot Cycle, that is, the thermodynamic process of compressing a element that carries/distributes heat - which can be a gas or water or air or some liquid. The objective is, within a Carnot Cycle, to raise the conductor's temperature under compression (therefore the need of a compressor) and then distribute it. (It is the reverse of what happens in a refrigerator.)

So the pump is simply the means of distribution, the key element being the compressor to raise the temperature of the heat-conducting substance.

As I said, France has a half-the-cost tax credit to install them, and is doing so like hot cakes. Europe is on the same trend. Whether heat is obtained from ambient air or sub-ground level does not matter (except that sub-ground level is a more reliable source in very sub-zero weather. What matters is that, unlike solar energy, it is ALWAYS there ready to be exploited.

Using geothermal heating I am reducing my total heating bill from 1000 Euros per year to 300 - a reduction of two-thirds. That means that the geothermal heating total cost is amortized in 5 to 7 years.

If America wants to get serious about suburban and rural heating of homes/offices, it must look to geothermal solutions. The total installation cost is about $15 a square foot here and quite likely less stateside, halved in case of a tax credit.

It is just one more solution to implement renewable energy sources and do away definitively with the carbon molecule. There are admittedly many sources, but geothermal heating depends upon an individual decision and one need not wait for some institution to install a wind-farm, nuclear reactor, or whatever to provide a suitable, ecological alternative.

NB: The distribution technique is as old as the Romans, who employed wood to heat water to steam, which was then channeled throughout the floor and walls of a house - before evacuating to the exterior. All we've done in the past century is employ the Carnot cycle, or Carnot "heat engine" as it was called in the mid-1880s.

[Lafayette]

realpc: So let's have all news supported by the government!! Terrific idea. I mean, the government would always tell us the truth, right?

You don't do sarcasm well.

The alternative is there, public television and responsible reporting on the Internet. No one is controlling the Internet, which brings both goodness and badness.

Admit it, most people have taken the bad habit of turning on morning TV to hear its pap for the masses. Marx railed against institutionalized religion as the means of communicating the pap, but modern TV is really no different. Neither the mindless twits who simply absorb the pap on the boob-tube as gospel truth.

Remember, news is on the front-page, and opinion is on the editorial page. Journalists should never confuse the two ... but they do. They can't help putting their own personal, individual twist to news reporting. Which is why they are accused of "bias" and "favoritism". And, which inevitably leads to internecine media bickering.

How many economic journalists take the time to enter into the arena on a blog and word-scuffle with others who have other points-of-view. No, they prefer to do it in what they think is "public media" (print/TV).

The worst error was Fox News which, under the aegis of Murdoch, decided to mix news with opinion in order to capture a select group of TV spectators.

[Lafayette]

And, there is another element at play. It is the bent of the harried of today to have all that is complex reduced to its utmost simplicity in order to be understood. This is what marketing does to messages in order to sell soap powder or breakfast cereals.

It works in commercials. But, it does NOT work in politics, where matters are exceedingly complex. Only long-winded debate will air the issues sufficiently such that we can all have a fairly well-balanced idea of them.

Americans/Europeans have become "news lazy". They want all information handed to them on a platter in an easily understandable fashion. When taken to an extreme, this method leads to "reduction to the absurd". We don't like the give and take of long-winded television debates, which really solve nothing but do serve at least to air differing points of view. (Ditto for blogs.)

So, if the public allows others to think for them, then that is precisely what others will do. This is what gives politicians their reason to exist. It is also why republican government has hit a hard wall, one with an excess of cronyism, lobbyists and money.

It is time to open the decision-making process to the people by means of national referendums. "Vox populi". Of course, that notion scares politicians sh**less. The levers of power are out of their hands - and back where they belong, in ours.

[realpc]

Lafayette,

People who have the time and interest can hear long-winded discussions on CSPAN or public TV, and can read newspapers and blogs. The daily TV news shows contain very little news -- now they mostly summarize pop culture in case you missed American Idol the night before, or want to get caught up on Paris Hilton's latest mischief.

Not everyone has the time or interest for serious news, and there is little point in forcing it on those who don't. I hate pop news and can't imagine anyone likes it. But if there were no demand, I guess it wouldn't be supplied.

But maybe everyone hates it, and this is just the TV stations desperately grasping for ratings.

[realpc]

But whatever the reason for the poor quality of TV news, the last thing we want is news provided by the government.

If there is a market for serious news -- and I'm sure there is -- someone will eventually provide it. I am tired of giggling pop news in the morning, and I can't be the only one.

Providers of TV shows try to figure out what people want.

Now if your opinion is that people don't want what's good for them and you want government to play the role of wise parent, then you are absolutely wrong.

[reason]

Realpc...
I think we should have many sources of news.

Historically, public broadcasting has been one of the best. (Just try the BBC). Very often an independent public service ethos, can produce very good results.

It is not "government provided news", it is news provided by a publicly financed automous organisation. It is governed by principles of fairness and objectivity, and reports to parliament, not the government of the day.

Being tied to a commercial owner, is just as biasing as being to tied to government. I think it has been a mistake to have diluted rules meant to ensure a dispersed ownership of media.

Don't just listen to slogans, check things out yourself.

[reason]

Lafayette,
as far as direct democracy is concerned, I'm suspicious of it. Not because I love politicians by the way, but because of the "paradox of voting". Every individual may prefer A to B ,B to C and A to C consistantly, but that doesn't mean the majority cannot prefer A to B, B to C but C to A. Having a responsible goverment make the trade offs is better, because if something goes wrong, somebody gets the boot for it. Look what has happened in Californian local government with disastrous tax decisions. Where decisions interact with one another making them by independent majority rule is a recipe for chaos.
Of course if you were to limit direct democracy to specific non-administrative legislation, perhaps I would agree it is a good thing (legalise marijuana - let the people decide).

[reason]

Lafayette,
I think it is unfair generalisation to describe Americans and European as news lazy.

We aren't.

If I look at German TV there is a great deal of political talk (I don't listen to it much, but then I don't get to vote here either).

Different countries have different styles. Tabloids (particularly in England) are the worst for telling people what to think.

I never saw such papers in Australia - Australians like to have their own opinions. Papers tried to inflence opinion in Austalia, but were much more subtle about it.

Strange that Murdoch (an Australian) has much less influence in Australia. Perhaps thats why he decided to become an American, Australian scepticism didn't suit his style.

[ki]

Reason, on the contrary, a lot of people here in the US (I dont speak for Europe) are news lazy. They gobble it up from whatever news station they find the most interesting, appealing (CBS, ABC, FOX etc). But they stories are all the same, and they repeat it like 5 times in a segment. Very lame. And very boring and uninformative. I could read a summary of the same on yahoo news in 5 mins. I just think it is a waste. And the people on these shows just sound like lame donkeys. Trying to make funny jokes in between the pathetic news stories.

I think a lot of people do not not watch long-winded news programs because they are boring to the average and perhaps even over their heads.

For me the most influential news source is blogs. I have learned much more on here than from any other media source because we voice our opinions (and we have differing opinions and different ways of approaching issues) However news stations write what they are to say and thats it. No controversy, no debate,no real information, lame.

[realpc]

"Being tied to a commercial owner, is just as biasing as being to tied to government."

Commercial owners compete with each other. Government-provided news would be total and complete BS.

There have been good serious commerical news shows by the way -- 60 minutes used to be pretty good. Lately, TV news has to compete with the internet so it's desperate. The result is idiotic attempts to be entertaining. Everyone probably hates it and the ratings will continue declining. Eventually either there will be no TV news, or it will find a way to compete.

We won't really need TV anymore, once everything is on the internet.

[Lafayette]

reason: as far as direct democracy is concerned, I'm suspicious of it.

Perhaps you should indeed ... but it happens to be the lesser of two evils.

Why must a nation of people, most of whom are fairly intelligent, or at least equipped with a good level of common sense, depend upon a select group of people who are "career politicians".

Regardless of the goodwill that this latter group may bring to politics, they remind me of both army generals who always are fighting the last war and not the present one. Politicians become the Praetorian Guards of conventional wisdom. Why?

Politics, like running a business, is difficult because it must manage a diversity of opinion. In fact, it is diversity that allows points-of-view to develop and even become, finally, conventional wisdom.

Marx was right; "Doubt everything", it is said that he said. This makes good sense. By questioning and questioning and questioning we keep awake.

It is when we (the public) stop questioning and let the politicians to do as they see fit, that they invariably chose continuity over change. Don't rock the boat, or you wont get re-elected. (Chapter 1 of the book from Political Job Security 101 class.) And, it is just this lack of courage to change/reform/take risk, whether in politics or business, that turns the ship of state onto the rocks.

Besides, popular referendum is an enormous responsibility, because people must keep informed. This is what I meant by "news lazy". We want to be spoon fed the news - a dash of tragedy, a tid-bit of comedy, a dollop of political blather and lots and lots of coverage of people like us coping with life. It's all rather banal - but the business of TV is to cater to our interests.

This permits us the luxury of blaming politicians. After all, it isn't our fault, is it? It's their job, not ours. So, let's blame them!

Wrong, or maybe only half right. Any democracy is the responsibility of its citizens ultimately, I suggest, because - after all is said and undone - we all share the consequences.