Sweden is not a socialist country. They are more of a free market economy than the US.
They pay very high taxes to provide each other with healthcare, public benefits and an unemployment safety net. (However, the provided healthcare also comes with long wait times that American’s would find disconcerting. )
Still, this system worked in Sweden because it was one of the wealthiest countries in the mid 20th century and had a very small, homogenized population. Sweden’s population was 7 million in the 50’s.
Since their country’s wealth creation slowed and their demographics changed from immigration they have been rolling back the socialized benefits.
When you compare the size Sweden’s population, currently around 10 million, with the US population of around 325 million, it’s hard to imagine how people believe we can simply create a system like Sweden’s in the US.
Is Sweden Socialist? No, but…
Jon Henschen March 05, 2018
…The glory days for Sweden economically took place prior to the 1960s, when they had a free economy, low regulation and lots of wealth. Between 1870 and 1950, Sweden had the highest per capita income growth in the world and became one of the richest countries, behind only Switzerland, the U.S., and Denmark.
In the 1960s, Sweden started to redistribute wealth, which brought wealth creation to a halt. By the mid-1990s, the country had growing economic problems because it continued to redistribute wealth it wasn’t creating. It was at this juncture that many of the wealthy (ABBA band members included) and entrepreneurs were leaving Sweden. In 1994, Sweden began implementing the following measures designed to reverse this trend:
- Reduce Regulation
- Reduce Government Spending
- Reform their Welfare Programs
- Shrink their Government
Sweden has continued on this path for the last 24 years, which has brought them a modest rate of growth, but not nearly as robust as pre-60s levels due to government taxation remaining high.
Many view Sweden as socialist. However, the country is, in fact, very pro-capitalism, but does it with redistribution through taxes. Personal income is taxed at a rate of 61.85 percent, plus a 7 percent social security tax rate for employees. On top of these taxes, Sweden also has a 25 percent consumption tax. For these sacrifices of financial freedom, this is what Sweden offers their citizens in benefits:
- Health care
- Unemployment Insurance
- Education through Ph.D. Level
- Child Day Care
- Very generous leaves of absence from work with benefits including: education up to 6 months, starting your own company up to 6 months off, parental leave up to 16 months with 80 percent of your pay during time off
- 16 public holidays (10 of these holidays are Christian-based, even though just five percent of the population are regular church attendees).
Sweden: The Rorschach Nation
…Johan Norberg says. “Sweden was the place where the government tried out on a large scale the most generous welfare-state socialism imaginable. But this was a parenthesis, one episode in Sweden’s history. Sweden was already rich when this happened. It was one of the richest countries on the planet, and it had an open economy, with about the U.S. level of taxes. And that is the precise moment in time when Sweden began to lag behind, the period when Sweden began to fail. It needed a terrible crisis in the 1990s. Since then, Sweden has begun to reform: pension reform, school vouchers, tax cuts, abolishing taxes on inheritances and gifts, and more. That’s the thing that people on the left misunderstand.”
There’s a different rightward perspective on Sweden: “Give us some of that.” Conservatives may not be excited about Sweden’s tax burden or the scale of its welfare state, but they are rightly impressed with the effectiveness and transparency of Sweden’s institutions, with its sober attitude toward public debt, its free trade, its flexible labor markets, its lack of corruption, the security of its people’s property rights, and much more. They conclude that the variable isn’t that Sweden has a larger public sector but that it has a more honest and effective one, that it thrives not because it has high taxes but because it spends them more wisely and more honestly. The conservatives at the Heritage Foundation rate Sweden’s economy as very free — more free than the American economy on some measures — and suggest that its path of reform since its economic crisis in the Nineties contains lessons for our own less sprawling but at least equally dysfunctional welfare state.
Sweden’s Reputation As A Welfare State Is In Trouble
Sweden has a reputation as the prototypical cradle-to-grave socialist European nation, and the political left has long yearned for America to be more like the Scandinavian nation.
But it’s looking through a smudged window. With little notice, Sweden has changed.
The turnaround has been driven in no small part by the election of Fredrik Reinfeldt as prime minister in 2006. He took office in October of that year and by January of 2007, tax-cutting had begun. The Reinfeldt government also cut welfare spending — a form of austerity — and began to deregulate the economy.
That doesn’t sound like the Sweden that American Democrats hold up as the standard.
But as Finance Minister Anders Borg told the Spectator, the Reinfeldt government was simply continuing the last 20 years of reform.
Far from hurting Sweden’s economy, the changes have improved it. And they’ll likely help to protect it from the 0.3% economic decline now forecast for the euro zone in 2012.
Sweden fell into recession in 2008 and 2009, as did many developed nations. But it’s pulled strongly out of the decline, posting GDP gains of 6.1% in 2010 and 3.9% last year, when it ranked at the top in Europe’s list of fastest-growing economies.
U.S. growth over those same two years under Barack Obama’s Keynesian stewardship? It was less than half of Sweden’s — 3% in 2010 and an anemic 1.7% in 2011.
While the U.S. continues to struggle with its jobs problem — unemployment is at 8.1% here — Sweden’s jobless rate has fallen to 7.5%.
Not perfect, but 7.5% is far below the euro zone average of 10.2% and significantly lower than the rates in Spain (21.7%), Portugal (12.9%) and the United Kingdom (8%), countries that Borg noted were “were arguing for large temporary stimulus.”
Under Borg, Sweden handled the downturn in the most un-European way. “While most countries in Europe borrowed massively, Borg did not. Since becoming Sweden’s finance minister, his mission has been to pare back government. His ‘stimulus’ was a permanent tax cut,” Fraser Nelson wrote last month in the Spectator.