Sweden Isn't Socialist

In international economic-freedom comparisons, Sweden often earns a higher ranking than the U.S.


For years, I've heard American leftists say Sweden is proof that socialism works, that it doesn't have to turn out as badly as the Soviet Union or Cuba or Venezuela did.

But that's not what Swedish historian Johan Norberg says in a new documentary and Stossel TV video.

"Sweden is not socialist—because the government doesn't own the means of production. To see that, you have to go to Venezuela or Cuba or North Korea," says Norberg.

"We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily. And that's the period in Swedish history when our economy was going south."

Per capita GDP fell. Sweden's growth fell behind other countries. Inflation increased.

Even socialistic Swedes complained about the high taxes.

Astrid Lindgren, author of the popular Pippi Longstocking children's books, discovered that she was losing money by being popular. She had to pay a tax of 102 percent on any new book she sold.

"She wrote this angry essay about a witch who was mean and vicious—but not as vicious as the Swedish tax authorities," says Norberg.

Yet even those high taxes did not bring in enough money to fund Sweden's big welfare state.

"People couldn't get the pension that they thought they depended on for the future," recounts Norberg. "At that point the Swedish population just said, enough, we can't do this."

Sweden then reduced government's role.

They cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes, and sold state-owned businesses like the maker of Absolut vodka.

They also reduced pension promises "so that it wasn't as unsustainable," adds Norberg.

As a result, says Norberg, his "impoverished peasant nation developed into one of the world's richest countries."

He acknowledges that Sweden, in some areas, has a big government: "We do have a bigger welfare state than the U.S., higher taxes than the U.S., but in other areas, when it comes to free markets, when it comes to competition, when it comes to free trade, Sweden is actually more free market."

Sweden's free market is not burdened by the U.S.'s excessive regulations, special-interest subsidies, and crony bailouts. That allows it to fund Sweden's big welfare programs.

"Today our taxes pay for pensions—you (in the U.S.) call it Social Security—for 18-month paid parental leave, government-paid childcare for working families," says Norberg.

But Sweden's government doesn't run all those programs. "Having the government manage all of these things didn't work well."

So they privatized.

"We realized in Sweden that with these government monopolies, we don't get the innovation that we get when we have competition," says Norberg.

Sweden switched to a school voucher system. That allows parents to pick their kids' school and forced schools to compete for the voucher money.

"One result that we've seen is not just that the private schools are better," says Norberg, "but even public schools in the vicinity of private schools often improve, because they have to."

Sweden also partially privatized its retirement system. In America, the Cato Institute proposed something similar. President George W. Bush supported the idea but didn't explain it well. He dropped the idea when politicians complained that privatizing Social Security scared voters.

Swedes were frightened by the idea at first, too, says Norberg, "But when they realized that the alternative was that the whole pension system would collapse, they thought that this was much better than doing nothing."

So Sweden supports its welfare state with private pensions, school choice, and fewer regulations, and in international economic-freedom comparisons, Sweden often earns a higher ranking than the U.S.

Next time you hear democratic socialists talk about how socialist Sweden is, remind them that the big welfare state is funded by Swedes' free market practices, not their socialist ones.

NEXT: Biden in 2020? The Democrats Could Do Worse.

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  1. Hey! You know what's a good idea? Let's fund a libertarian study on why a high-tax state with cradle-to-grave social security and generous unemployment benefits might also have a free-market economy. Then we can gin up elements of the latter, de-emphasize all the icky public-sphere aspects of said economy and, voila, attribute all the goodness of Europe's welfare state economy, where people enjoy 8 week's of paid vacation benefits, to the glories of good old-fashioned capitalism.

    Think anybody will buy that? Sure! It's Trump-Land so anything's game. Yay!

    1. Welcome to 2019; all things are new and different.

    2. "..where people enjoy 8 week's of paid vacation benefits."

      Having lived in Europe for several years, it always annoys me when my fellow Americans claim how much vacation time Europeans get. The reason is because they count numerous bank holidays as vacation time. If you eliminated those, or counted American holidays (memorial day, thanksgiving etc), you would quickly realize that people actually don't get more vacation time. It's pretty much the same...but as American's we have become the best as whining and complaining about not being treated fairly. It's a luxury only people living in the best time period for our country can afford.

      1. The US has no mandated paid vacation days, while most European countries do. Sweden has 25 mandatory vacation days, and 9 paid public holidays. Compare that to zilch for the US.

        1. you need to add "private sector". Government employees are given those days under statute in many situations.

      2. This is really silly. Not only do current Europeans have more paid time off than most current Americans - people in the middle ages or pre-industrial economies had more time off than most moderns living in industrial economies.

        Americans are correct in seeing the costs of that PTO - that it isn't free and that is an overhead cost to an employer of hiring an employee. But that PTO IS delivered. So make your argument on the basis of whether the benefits of that outweigh the costs -- not on BS counterfactuals of whether the benefits even EXIST though the costs do.

        The only group of Americans who may exceed PTO are those with prob 20+ years of service with the same rel large employer (since that is the typical way days beyond just holidays are granted in the US - and large cos offer more than small cos - and higher income get more vacation than lower income). And that sort of career employment with a single large employer has become quite rare over the last few decades.

        And yeah - I lived and worked in Europe too.

        1. I'm not making any arguments (if you are talking to me). In my case, i left a job with a US medical device company after ~15 years of service where I had 3 weeks vacation time (plus 1 week unpaid) to go to work for a european company in western europe that claimed similar vacation time. What I found out was that some of that vacation time that was promised was bank holidays and, in actuality, I had really no more vacation time, plus the process to get vacation time approved was ridiculous at best. I guess YMMV. I'll agree that people with little experience get much more vacation time in Europe.

      3. Funny story, I was just doing a rough plan on my leave balances this year, so I know how many leave days I get, including paid holidays.

        It's six weeks, or 30 days worth. Ten holidays spread throughout the year and another 160 hours to use as I see fit.

        And my time off policy is way better then most Americans get.

        So yeah, they do get better time off and it's not "pretty much the same".

        1. Depends on where you work in the US, I suppose. I'm also assuming you are working as a professional in Europe (since you don't say). Out of curiosity, how many years of professional experience do you have? I am guessing your vacation time is probably comparable or very similar to what a decent, competitive company in the US would give. In my opinion, people with little to no experience are the ones that benefit by western Europe's generous vacation policies ...and then if you can manage to get laid-off, you really hit the jackpot.

          1. You misunderstand me.

            I'm a working professional in America.

            And yes, I'm doing much better then most Americans, including most Americans who have been in their careers considerably longer then myself: [Link to article].

            And yes, the best of Americans are pretty much hitting the minimum for European countries: [Link to wikipedia]

            You are, quite simply, wrong about how much vacation time Europeans get compared to Americans.

            1. So, as an American you get the same as Europe. Thanks for proving my point. What I was trying to say is that people that claim Europeans " enjoy 8 week's of paid vacation benefits," don't realize that most Europeans count bank holidays into such figures (nobody in Western Europe gets 6 weeks of paid vacation excluding bank holidays). What I should've said is professional people with experience have pretty much the same vacation benefits as Europeans. Where I worked, you also had to have a written note from a doctor to claim sick days and a relatively lengthy request procedure to use your vacation time that could pretty easily be rejected. My job in the US was much more flexible.

      4. A childhood friend of mine married an Italian man, and they live outside Naples. He is a municipal accountant. He got 5 weeks off per year when he started, and he gets at least 8 now. He also has only a 32 hour work week.

        So yes, these things are true.

        1. Because an n=1 is proof. He's also probably Berlusconi's personal accountant and is responsible for paying for for bunga bunga parties, as well as attending. Sti Cazzi!

          1. Its proof that his one anecdote blows your stupid assertions without citations out of the water.

            1. Because an n=1 is proof. Thanks for coming to his rescue to prove you're as incompetent as him.

              1. Also, I'd be willing to bet that the Italian municipal accountant got 3 weeks vacation and 10 bank holidays when he started and he now gets substantially more depending on time served. Not much different than the high end in this country among generous employers. Also, it's becoming very common for people in this country to work less than 40 hours/week for reduced pay. You can find all of this info at the Bureau of Labor statistics and someone posted a link to the wiki page for minimum time off by country. My only point is that when people say the Europeans get a lot more vacation time they don't realize it's common practice for them to include bank holidays in their calculations. My experience of living there for 5 years is that it is no better for professional people with some experience. I assert nothing other than that. You're free not to believe me.

              2. Because n=1 also means that anecdotes that you dont like scare you from providing any support for your position.

                Trolls like you keep doing what you do while the rest of us discuss things of interest.

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  3. Well, they seem pretty Leftist just letting all these 3rd world migrants in to bring more crime and rape their women!

    1. Do you have any cites for that? It's kind of a blunt statement to just equate an influx of immigrants with "crime!"

      I don't know how many people have migrated to Sweden and from where but it's mostly a recent phenomenon I think. I really don't know, I'm just being a Jeff about your "crime and rape!" statement because reasons.

  4. I don't know about today, but when I lived near Helsingborg in the 1990s we always went to Denmark to buy our booze, they still sell all liquor through the government liquor store, the systembyloget, and anyone who wanted to buy a Swedish Volvo went to Denmark to buy it because it was cheaper there than in Sweden where the cars were made.

  5. Even if the Nordic countries are socialist success stories, we're still left with what strikes me as an obvious question: why didn't socialism work anywhere else? Why would it work in the U.S.?

    1. No one ever wants to confront the probability that Scandanavian socialism works because it's run by Scandanavian socialists.

      Meanwhile, 60-plus years of Latin American, East Asian, and African socialism should have demonstrated that third-world countries aren't capable of running these systems effectively.

      1. No one ever wants to confront the probability that Scandanavian socialism works because it's run by Scandanavian socialists.

        Likely apocryphal but the point is well made: A Scandinavian economist said to Milton Friedman: "In Scandinavia we have no poverty." Milton Friedman replied, "That's interesting, because in America among Scandinavians, we have no poverty either".

        Not apocryphal from MIlton Friedman: "The Scandinavian economies have a very small homogeneous population. That enables them to get away with a great deal they couldn't otherwise get away with. What works for Sweden won't work for France or Germany or Italy ? in a homogeneous culture, they are willing to pay higher taxes in order to achieve commonly held goals. But common goals are much harder to come by in larger more heterogeneous populations."

        1. That. It's very good point.

          1. Plus it's only very recently changing with a bigger influx of immigrants than has previously happened in Sweden, so the changes this brings will be interesting to see.

        2. It's the same for Japan. After 30 years of stagnation they'll still allow themselves to be handicapped by their government. It's the authority that comes from being a mono-ethnic state.

        3. Well-stated. That argument applies even more strongly to Japan, with even more homogeneity and more collective cooperation. It's like one big extended family, with one culture which values family, honesty, and a strong work ethic.

        4. When the in thing in business during the 1980s was the Japanese model, many were saying the same thing: Japan was a very homogeneous society racially, culturally, religiously.

          The U.S. was far from it.

          What works in Japan and Japanese businesses wouldn't work here. For that reason.

      2. Apparently neither were second-world countries so let's not forget the European socialist countries.

    2. One factor is the concept of social trust. Social trust derives from shared values and commitments, and is degraded by differences (i.e. diversity). Monolithic societies can generate higher social trust, which in turn enables both less government and more support of government programs (which does indeed sound contradictory).

      Any country with entrenched opposing interest groups and active tribalism will have low social trust and almost certainly fail at socialism.

      1. Unless the outgroup is all slaughtered, disenfranchized, chucked into gulags, or flees. Then it will be a socialist utop- oh never mind.

      2. You got that exactly right Earth Skeptic.

        I lived in Sweden in the 70s and 80s. One day I asked my coworkers, "Doesn't it bother you having the government in Stockholm making so many decisions about how you live your life." Their reply was, "Not at all. We are confident that those people would make exactly the same decisions we would."

        That really brought home to me the real reason the social democratic state could never ever work in the USA. Imagine Clinton and Trump supporters saying, "It doesn't matter who is President, they all would do exactly the same thing."

        Since then, things have become much worse in Sweden. The health care system, the schools, social trust have all gone downhill. There was no poverty, no riots before; now both exist. They have a significant number of immigrants who have no interest in learning how to become "good Swedes" and being assimilated into the monoculture. The system requires near unanimity to work.

        1. Great point. The Socialist hive mind requires no opposition to work for awhile. Once reality sets in, socialism's are unsustainable. And something has give.

          For the USA, we all get along pretty well for ~310M people and Socialists actively trying to murder dissenters.

  6. "For years, I've heard American leftists say Sweden is proof that socialism works"

    It's amusing how the Left always point to the whitest of white ethnostates as their ideal societies.

    1. Even more amusing is how easily you right-wing goobers can swallow bullshit.
      Stossel lied in that quote. And you're a partisan bigot.

      Left - Right = Zero

      1. Hihnsane in the membrane,
        Hihnsane in the brain!

        1. Hihn's insane, got no brain?

          1. Nah, Hihn has the special stupid, the kind you only get when someone very bright goes completely off the rails.

      2. Abs(Left) = Abs(Right)


        Right = -Left


        Left - (Right) = Left - (-Left), or Left + Left.

        Left-Right = further left.

        1. Yeah well - Up up down down left right left right B A start = Cheat

          1. Super Sonic?

          2. you got 30 lives.

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  8. So if it's not actual socialism, then what is it? What do you call letting the free market create wealth then stepping in to redistribute the spoils? I need a label.

    1. Mixed economy? Welfare state?

      I think it's a distinction worth making. There's a big difference between hard socialism where the government controls and owns major industries and the big welfare states you see in some of Europe. The former hasn't remotely succeeded anywhere.

        1. You call China a success story? I guess, if you like people thrown into concentration camps (Uighurs), practicing religion to be an offense worthy of prison time, the slaughter of tens of millions during the cultural revolution, 25 million people still living in caves, serving as the economic lifeline for the brutal regime in North Korea, and just for you leftists - environment degradation on a scale that would be scandalous if it ever got reported here.

          But they have some sky scrapers and a fast train or two. Total success, Mr. Friedman.

          1. The same people who decry America's capitalistic greed embrace Chinese capitalistic greed as "success". They like to denounce America for the sins of it's past while ignoring even larger sins elsewhere. Most of our sins are in the past while in China, they are simply a continuation of the policies of an authoritarian regime.

            They're also are happy to ignore the fact that China's economic success is based on unverifiable data provided by a corrupt, self-interested Chinese government.

        2. China only stopped being an economic basket case when they broke down and admitted this socialism crap wasn't working. While the Chinese state/military still own plenty of companies, they no longer own anywhere close to everything. Current-day China is a weird hybrid of authoritarian government and significant (if far from complete) economic freedom. Their recent slowdown in economic growth suggests that this model isn't sustainable, although it's far from clear exactly where they go from here.

      1. In true socialism, it isn't the government that owns the means of production, it's the people. ;-(

        I've never heard how "the people" would own non-productive means of work. Like, how do "the people" own the physician that is plying his or her trade?

    2. How about Social-Capitalism? Socialists will think they won but capitalists know where the wealth comes from.

      1. That slope gets real slippery real quick.

    3. "So if it's not actual socialism, then what is it? What do you call letting the free market create wealth then stepping in to redistribute the spoils? I need a label."


  9. A silly distinction. Sweden is a unique beast, incorporating a variety of socialist policies that would be non-functional in many other parts of the world.

    Comparing anything in an extremely diverse multi-cultural country like the US to something in a culturally monolithic, insular country like Sweden is ridiculous.

    1. this is similar to Japan which is mostly a mono culture however Swedens success recently may fail yet again since they've allowed immigrants in who do not share the same ideals

    2. Don't forget that they are oil rich and have a tiny population.

      Wow, you mean if I took Texas' oil and moved it to Vermont, we could support a large welfare state?

      1. Sweden isn't "oil rich". I believe you're thinking of Norway. Eh, it's tough keeping the various Scandahoovians straight.

  10. "...since they've allowed immigrants in who do not share the same ideals"

    The muzzies do share at least some of the same ideals under the principle of what's yours IS mine... penchant for Swedish Welfare and Swedish Women and what's mine WILL be yours ...muzzie death cult Worship, so as not to be exclusively takers. Shhhh, the viewpoint that the loss of freedom of worship is actually an additional taking must be ignored. Forced adherence to the religion of peace is surely a gift that one best not lose their head over or one may literally lose their head over it.

    Ahhhh, I love the smell of dark ages infused multi-culturalism in the morning. More precisely, a fleeting transatlantic whiff.

    Yeah, not one of the W's was for Work. Go figure.

    1. Bring back the Crusades....or, at least the Spanish Inquisition!

  11. Socialism (strict definition): the government owns the means of production. So not modern Sweden.

    Socialism (practical definitions): 1. The government claims and controls a majority of GDP. 2. A method for redistributing wealth (as opposed to capitalism: a method for creating wealth). Very much Sweden.

  12. Sorry Stossel, Sweden IS Socialist.

    List of state controlled businesses that are wholly or partial owned by the Swedish government.
    State controlled businesses in Sweden

    The state is a significant company owner in Sweden. The state's company portfolio contains 48 wholly or partially owned companies, of which two are publicly traded. In addition, two business foundations are administered. In total, the state-owned enterprises employ approximately 137 000 people. The estimated total value of the state company portfolio amounts to SEK 510 billion.

    1. Wow. 137,000 people in a country of 5 million.

      1. That would make about ~2.7% of the Swedish population government employees.

        In the USA with a population about 310M and 2M federal civilian employees, that makes it .65% of the American population are federal workers.

        1. Which is still far too many.

          1. Oh yeah.

            This shutdown is illustrating to more and more Americans how worthless most bureaucrats are.

        2. Add state and local employees to the federal numbers and let's talk. They are government too.

      2. Sweden has a population of 10 million.

  13. Swedes were frightened by the idea at first, too, says Norberg, "But when they realized that the alternative was that the whole pension system would collapse, they thought that this was much better than doing nothing."


  14. "Sweden's free market is not burdened by the U.S.'s excessive regulations, special-interest subsidies, and crony bailouts."

    Well then, Sweden doesn't know what its missing... the joys and pleasures of heavy handed bureaucracies, bailouts, wasting taxpayers money, and making our ruling elites' cronies wealthy.
    I feel sorry for these poor Swedes and all the waste and fraud they're missing out on.

  15. Stossel has it all backwards. It's the Republicans who claimed places like Sweden and policies like social security are "socialism".

    1. Yep, Bernie Sanders the Republican looking to Scandinavia and Denmark in particular and calling it socialism. Mention that socialism never works and you'll get crowds of former wannabe-Chavistas (Republicans, of course) coming to tell you about the minor countries of Scandinavia.

    2. They did it for so long that now Democrats believe them

    3. Either way, the point is we should never become socialist, and need to scrape off the progressives to ensure that never happens.

  16. Fun fact: The US government spends more money on healthcare per capita than the Swedish government does

    1. Taiwan spends 15% of what the US spends, plus small copays, and everyone is covered. Prescriptions are included and the health care is excellent. Seems like US insurance companies and providers are raking it in by price gouging, after all the doctors' labor union, the AMA, holds a monopoly. The US should have a free market in health care or regulate it as a public utility.

      1. My health insurance costs about fifty bucks a month.

        1. I have catastrophic insurance for a few hundred per year and doctor visits cost a few hundred per year.

          And my taxes are low.

          Socialized medicine is an expensive moneypit.

          1. I've heard that in Russia, health insurance is low. However, I had no idea they were that low.

          2. Uh, is an emergency room visit considered catastrophic under your plan?

            I hope so or, you might get wiped out from a relatively minor accident or illness.

      2. The insurance companies don't benefit from paying high prices to providers, and they have the clout to negotiate prices. Also, the AMA doesn't hold a true monopoly (there are alternatives) but I will grant you that it is a de facto monopoly

        But the fact is that the government simply overpays, not just for healthcare but for everything, because they are never held accountable for how they spend tax dollars, nor how much of a deficit they run

        1. As a former government employee I can say with authority: BTDT.

          The biggest difference between my first 18 years of post college, private sector employment and my final, 20 years of government employment was the emphasis of the first on cost controls and efficiency whereas, the emphasis in government was always seeking more revenue (taxpayer funds). Cost controls were verboten in government employment. Seeking better efficiencies was occasionally given lip service through "studies" and academic research. But never seriously considered.

    2. Not sure about the government share, but overall the US spends more on healthcare per capita then any other country in the world. So this should be no surprise.

      1. The USA also has the best nealthcare system in the World and subsidizes socialist nations for med tech and pharmaceuticals.

  17. So you want to bash Sanders for being a socialist, but you're also saying that the policies he likes aren't "really" socialist?

    Sounds like you just undercut one of your own talking points regarding Sanders.

    1. Sanders believes that the policies he likes are in Sweden but he's really thinking about Denmark. Denmark isn't nearly as nice as Sweden and still isn't socialist.

      Besides, it's consistent to complain that somebody identifies as something even as they act differently. During the period when Mao was still around but before the Cultural Revolution China still identified as Maoist and wanted to keep up the spirit but didn't implement new Maoist policies. Once he came back into power they gladly went along with the carnage. They were shitty at the time both for being Maoists and implementing other shitty policies, seeing as how they'd go further in the future. I have no doubt that Sanders would try to nationalize more industries after healthcare, none of which have worked better in Sweden than here.

  18. "Sweden switched to a school voucher system. That allows parents to pick their kids' school and forced schools to compete for the voucher money."

    A couple of things that I've read about Sweden's voucher system:

    1) The vouchers are very close to what the public schools are allocated per pupil. Voucher systems here in the U.S. are often sold as a way to save money.

    2) Parents choosing a Free School (what the private schools in the voucher system are called), cannot add in their own money.

    3) The Free Schools must still use the national curriculum.

    4) The Free Schools may not have criteria for admission other than a first-come-first-served basis. They may not select students by ability or exclude students with disabilities, for instance.

    I don't see many private schools in the U.S. agreeing to these kinds of restrictions, even in exchange for universal vouchers. Most private schools here are religious schools, so they would not be on board with a required curriculum (some are still going to want to teach creationism, for sure). Those that aren't religious are often elite private schools that charge way more in tuition than what public schools spend per student. (Elite prep schools in my area of Florida have ~$15k/year tuition, which is double per pupil spending in public schools.)

    The bottom line is that I have seen no country run a voucher system anything like the way states in the U.S. do it.

    1. All tax money for schools should be cut by 50%+.

      Parents should pay for their kids education even if taxpayers decide that some public should supplement that to give kids a very basic education.

      1. You do realize that making parents pay for their kids education directly would mean that the parents' income would determine the quality of education their kids receive, don't you? Well, of course you do, since it already does, even before your 50%+ cut. Even for the vast majority of students that attend public schools, the ability of their parents to afford to live where the schools are rated better is the first form of school choice. Parents that are even better off will naturally be able to send their kids to elite private schools.

        What your proposal would do is hurt the poor the most, since they already have the least amount of choice available to them.

    2. Jason:

      You're wrong on the private/religious schools. I attended a nationally known, Catholic high school (and I'm not even Catholic). The school was required to conform to the same curriculum standards as public schools. Creationism wasn't even discussed. We did have to take one religious studies class per quarter. But they werent Catholicism either.

  19. The left here in the US will never believe this.

  20. Easy for the government to offer more goodies when you have a mostly homogeneous population of 10 million (about the size of North Carolina). Try doing that in a non-homogeneous country of 325 million where SJWs demand that each identity group must have all their needs paid for in full, and it will never work, ever...

  21. Look, Sweden "really is" socialism for the same reasons the USSR, Nazi and Stasi Germany and Venezuela "weren't really" socialism. Communist looters are exactly like Creation Scientists, Klansmen, Warmunist Millerites, Comstock Law advocates, glossolalian snake-jugglers and fetus-forfeiture fetishists. They make up their minds (or are conditioned) to believe something, then proceed to believe it, contradictions be damned!

  22. Those rankings are rigged so that the richest countries appear at the top.

  23. 50+% tax rates are socialist.

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