Contrary to the supposed utopia thought of by Democratic Socialists of America (DSA) when they talk about place like Sweden, CNN host Fareed Zakaria broke down Sweden's huge political and political transformation. He argued that the country being stereotyed as a expansive democratic socialism has actually spent decades moving toward a more entrepreneurial economy, lower taxes, tighter immigration policies.
American socialists have beaten a dead horse claiming Sweden as evidence that their uneconomic model can work. DSA's own publication Democratic Left praised Sweden and Norway (another country that does not fit the bill) as having developed “the world’s most just economic model to date,” while Sen. Bernie Sanders has repeatedly pointed to Sweden and its Nordic neighbors as examples of countries from which the United States could learn. More recently, Darializa Avila Chevalier, a Democratic congressional candidate and member of the DSA, cited Sweden and Norway when asked to name a successful model of socialism outside the United States. In other words, Sweden has long served as a promised land for the American left.
"One country offers a way out, Sweden," Zakaria said, comparing the Scandinavian country of just 10 million with European nations struggling with stagnant growth, tidal waves of debt and increasingly expensive welfare systems. "Often still remembered fondly by progressives everywhere as the poster child for democratic socialism, the country, in fact, has made a remarkable pivot toward an entrepreneurial, free-market economy," he said. "Its real edge, though, is a cultural willingness to keep changing when the old model stops working."
For much of the 20th century, Sweden was an expansive welfare state known as folkhammar, or "the people's home." Zakaria described the social contract as one in which "everyone works, everyone pays in, and in return, everyone is cared for."
The model eventually became extremely expensive. Zakaria pointed to the example of Swedish author Astrid Lindgren, who faced a 102 percent marginal tax rate in the 1970s. "But that era belongs in the past," Zakaria said.
Following deregulation in the late 1980s, Sweden experienced a severe economic crisis, with banks requiring government intervention while unemployment and debt climbed. Conservative Prime Minister Carl Bildt then led reforms that included spending cuts, privatization and major tax reductions. "The government slashed public spending, privatized state monopolies, and carried out what was known as the tax reform of the century," Zakaria said. The top income tax rate subsequently fell from nearly 90 percent in the 1980s to around 50 percent today, while public social spending has fallen to roughly 24 percent of GDP. Sweden's government debt is now about 36 percent of GDP, according to figures shown by Zakaria, while the US is above 120 percent.
The country has also developed a significant technology sector despite having fewer than 11 million residents, producing companies including Spotify, Skype and Klarna.
Former Bildt economic adviser Lars Jönsson summarized the transformation by saying, "We have put a capitalist revolution into a former, very strongly socialist-oriented society." Sweden's shift has extended to immigration. After accepting more than 160,000 asylum seekers in 2015, the country moved toward one of Europe's most restrictive immigration systems. "The country's new model of a leaner state and tighter borders now has broad support across both right and left," Zakaria said. He stated that Sweden's broader lesson is its willingness to change course when existing policies stop working. "When we encounter a problem, the question is not what is right, but what works," Zakaria said.
American socialists have beaten a dead horse claiming Sweden as evidence that their uneconomic model can work. DSA's own publication Democratic Left praised Sweden and Norway (another country that does not fit the bill) as having developed “the world’s most just economic model to date,” while Sen. Bernie Sanders has repeatedly pointed to Sweden and its Nordic neighbors as examples of countries from which the United States could learn. More recently, Darializa Avila Chevalier, a Democratic congressional candidate and member of the DSA, cited Sweden and Norway when asked to name a successful model of socialism outside the United States. In other words, Sweden has long served as a promised land for the American left.
"One country offers a way out, Sweden," Zakaria said, comparing the Scandinavian country of just 10 million with European nations struggling with stagnant growth, tidal waves of debt and increasingly expensive welfare systems. "Often still remembered fondly by progressives everywhere as the poster child for democratic socialism, the country, in fact, has made a remarkable pivot toward an entrepreneurial, free-market economy," he said. "Its real edge, though, is a cultural willingness to keep changing when the old model stops working."
For much of the 20th century, Sweden was an expansive welfare state known as folkhammar, or "the people's home." Zakaria described the social contract as one in which "everyone works, everyone pays in, and in return, everyone is cared for."
The model eventually became extremely expensive. Zakaria pointed to the example of Swedish author Astrid Lindgren, who faced a 102 percent marginal tax rate in the 1970s. "But that era belongs in the past," Zakaria said.
Following deregulation in the late 1980s, Sweden experienced a severe economic crisis, with banks requiring government intervention while unemployment and debt climbed. Conservative Prime Minister Carl Bildt then led reforms that included spending cuts, privatization and major tax reductions. "The government slashed public spending, privatized state monopolies, and carried out what was known as the tax reform of the century," Zakaria said. The top income tax rate subsequently fell from nearly 90 percent in the 1980s to around 50 percent today, while public social spending has fallen to roughly 24 percent of GDP. Sweden's government debt is now about 36 percent of GDP, according to figures shown by Zakaria, while the US is above 120 percent.
The country has also developed a significant technology sector despite having fewer than 11 million residents, producing companies including Spotify, Skype and Klarna.
Former Bildt economic adviser Lars Jönsson summarized the transformation by saying, "We have put a capitalist revolution into a former, very strongly socialist-oriented society." Sweden's shift has extended to immigration. After accepting more than 160,000 asylum seekers in 2015, the country moved toward one of Europe's most restrictive immigration systems. "The country's new model of a leaner state and tighter borders now has broad support across both right and left," Zakaria said. He stated that Sweden's broader lesson is its willingness to change course when existing policies stop working. "When we encounter a problem, the question is not what is right, but what works," Zakaria said.
