Defending Sweden

The Globe and Mail’s Neil Reynolds does a hatchet job on Sweden. Alas, conservatives have called for the end of the Swedish welfare state for a long time, and this smear job may postpone the day that Canadians start looking at Sweden as a model we may want to emulate.

Truth be told, I have never been to Sweden (though I have been to Denmark, and I’ve eaten the Swedish meatballs at the Ikea restaurant on a number of occasions). Still, it seems to me that we can learn a lot from Sweden and the other Scandinavian states (see post on Sachs and Scandinavia). I do not think that Reynolds has been there either, and, it should be noted, he cites precisely one article in support of his take.

This article in question is from Johan Norberg, who wrote a 2003 book called “In Defence of Global Capitalism” and has a blog where he describes himself as “a Swedish writer devoted to globalisation and individual liberty. This is my GlobLog, where I share my latest thoughts and explain what I am doing to promote global capitalism.” The article was published in the conservative National Interest magazine, which cites praise from Margaret Thatcher (“The National Interest is essential reading for all those who follow international affairs. It is cogent, authoritative and stimulating: full of ideas and arguments which challenge, as well as inform, the reader. I commend it most highly.”) and Newt Gingrich (“Conservative Realism at its Best.”) on its website.

So not exacty a neutral analysis of Sweden. The article cites a litany of flaws, including slow income growth, lazy bureaucrats, and welfare state entitlements. In other words, the usual accusations from the right.

But, as economic historian Peter Lindert points out in his 2004 book, Growing Public, the demise of the Swedish welfare state has been reported consistently in the press since the late 1970s, and yet continues to do just fine, thank you very much. Lindert devotes a whole chapter to Sweden that is well worth the price of the book. While Sweden has tinkered with its welfare state over time, it continues to have a welfare state consisting of pro-growth social expenditures (including child care, for example, leading to greater labour force participation by women) financed by high overall taxes but with a tax mix that is not particularly harmful to growth.

Another perspective is provided by comparison of Canada, the US and Sweden was done in 2002 by Andrew Jackson, then with the Canadian Council for Social Development. He finds that:

Canada beats the U.S. hands down on most social indicators, but we still fall well short of the Swedes. So there’s reason for pride, but not for complacency.

Our 25-indicator scorecard looks at income and poverty; jobs; employment security; social supports for families; health; crime; education; and civic participation.

…
Using a common definition of poverty (having less than half the income of the average family), one in ten Canadians are poor compared to one in six Americans and just one in sixteen Swedes. One in six Canadian kids is poor, compared to almost one in four American children.

When it comes to jobs, the U.S. wins in terms of low unemployment, but there is little difference between the three countries in the proportion of people who have jobs. The U.S. does worse than Canada, however, when it comes to the quality of jobs, and here we both compare badly to the Swedes.

A common definition for being “low paid” is being paid one-third less than the national average. If we use this definition to compare the workforces of the three countries, 21% of Canadian workers are low paid, compared to 25% in the U.S. and just 5% in Sweden. More Americans than Canadians and Swedes work in jobs with very long hours. And Americans are much less likely to be in a union, to have access to unemployment insurance, and to qualify for government paid retraining programs.

One of the biggest differences is in terms of social supports, where Canada again stands between the U.S. and Sweden. American families have to pay much more out of their own pockets for health care and education, which wipes out a lot of the benefits of those vaunted lower taxes.

Governments pick up 70% of the cost of health care and 60% of the cost of higher education in Canada, compared to 45% and 51% in the U.S. Overall, American families spend 9% of GDP on social protection – everything from health care to pensions – out of their own pockets, compared to only 4% in Canada and 3% in Sweden.

Greater income equality and more citizenship entitlement programs make Canada and Sweden clear winners over the U.S. when it comes to health outcomes, crime rates, and educational attainment. And we get to enjoy it longer — Canadians live more than two years longer than Americans: 75 years compared to 72 years for men, and 81 years compared to 79 years for women.

We in Canada are much, much less likely to be victims of violent crime than Americans. The murder rate in the U.S. is a staggering three times higher. And, for every 100,000 people, the U.S. has 546 prisoners, compared to 118 in Canada and just 71 in Sweden.

Based on the results of the International Adult Literacy Survey, 50% of Americans have low literacy skills, compared to 43% of Canadians and just 25% of Swedes. At the other end of the skills scale, 39% of Canadian adults have completed post secondary education, compared to 35% of Americans and 28% of Swedes.

Finally, Canadians are more likely to be politically involved than Americans, though both of us compare badly to the Swedes: 56% of Canadians vote in Parliamentary elections, compared to 49% of Americans and 83% of Swedes.