Swedish “Socialism”
It came up in a recent conversation that Sweden was an example of socialism working. At the time, I really didn’t know a thing about Swedish politics or economics, so I left it alone. I’ve done a bit of research, and I don’t think Sweden is a socialist state at all. At least not as I interpret the word.
Webster’s defines Socialism as:
“Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”
And this seems to be not at all what sweden is. Industry in Sweden is primarily privately owned. Even energy production is largely privatized (with very little fossil fuel usage, BTW). It ranks #1 on The Economist’s Index of Democracy. The new face of Swedish socialism on Forbes.com contrasts the “socialist facade” with a booming economy with low inflation and a lot of entrepreneurial growth. The Sweden Wikipedia article and related articles also give a good overview.
I think few will disagree that Socialism as defined above has not worked out well historically. Alan Greenspan captures why this is very effectively in his book, “The Age of Turbulence“. It is because a centrally planned economy relies on the central planners to set prices, allocate production resources, etc. They simply can’t do this effectively. Markets can. When lots of people are acting individually, using price signals to determine the best way to deploy the capitol under their control, they can arrive at a more optimum distribution of resources. Additionally,private property rights must be guarantee, or there really isn’t any reason for anybody to invest themselves or their resources (which they don’t really have in the first place) in anything.
There is little doubt that markets are an excellent tool for optimizing resource allocation and determining prices, and private ownership is required to maximize motivation to succeed. However, what people so often call socialism in sweden, includes both of these things. Okay, some services, such as health care and education, are “socialized”. It is certainly a welfare state by anyone’s definition, with guaranteed health and education services for everything, extensive unemployment support, and a tax burden higher than any other industrialized country (as percent GDP). But these taxes are used to provide services that Swedes apparantly think are worth paying for. They’ve decided that it is worthwhile to pay for health care for everyone. And socializing a service doesn’t mean the government is going to screw it up. Since 1992, Sweden has implemented a school voucher system, where the state will pay full tuition costs to the for-profit private school of the parent’s choice. Schools must compete for students providing the motivation for excellence, yet equal access is still guaranteed for all citizens.
I’m not suggesting that Sweden is a perfect model of government that the U.S. or any other country should strive for. I just want to make two points:
1) I wish people would stop throwing around the word Socialism or Socialist every time someone suggests the government provide health services for the WHOLE public. They are just trying to associate an old stigma, that really doesn’t apply at all. We are not talking about abolishing private property, compromising democracy, or throwing away free markets.
2) Tax-payer funded health care and education (among other things) can work, and has in several countries, Sweden included. As far as I can see, it is the only way to guarantee equal access. The real question people should be asking themselves is if they are willing to pay a bit extra in taxes in order to provide it. The same goes double for education. We ALL benefit from a well educated public.
July 20th, 2008 at 10:08 am
Maintaining price signals is really the crucial point, and the school voucher system hits the nail on the head there. I cannot really wrap my head around why people are so opposed to it here (though it does seem to be gaining more and more support). I think, at least in the case of children, we can almost all agree that welfare is a good thing. Purely public education however has proven itself highly ineffective at leveling the field though, so why cling to it when other countries have already proven the effectiveness of vouchers?
July 20th, 2008 at 1:02 pm
It is worth noting that, according to the BBC article, only 6% of children are in private schools even though it is a free switch.
August 10th, 2008 at 12:33 pm
I agree with your 2 points. On NPR a week or so ago they were discussing health care in Sweden, I believe, or maybe France, and when the interviewer asked the question “Does it bother you to pay for health care for fellow countrymen?”, (all are required to pay for basic care, like a tax) The interviewee replied that that was an American question. That we are all so individualistic, to a fault here in the US. That in their country they belong to each other and it is to the benefit of all to care for each other. I think that is true in all respects, but particularly with our most vulnerable citizens (the young, the infirm and elderly, and the poor) I would not mind paying a higher tax if someone were to benefit from it. It makes sense to me. Our health care system and education system are outdated and dysfunctional. Sorry for the soap box.