I know you’ve been there — you’re tabling on campus when suddenly a flannel-draped wide-brimmed-glasses-wearing condescending liberal hipster walks up to your group and asks this exact question (or some variation):
“If Sweden can have such a successful welfare state, then why can’t we do the same thing in the United States?”
Often times young libertarians are not entirely sure how to respond to these questions simply because — let’s face it — most of us are a little rusty on our knowledge of Sweden. So here’s five basic things to know about Sweden before having such a conversation. (Away from your table, of course).
#1 Sweden is much, much smaller than the United States
Sweden’s population in 2012 was 9.5 million — roughly the same as North Carolina’s — and roughly a tenth of its people live in or around Stockholm. This population is dispersed over an area that is less than one-twentieth the size of the United States (and that’s generously assuming that the Swedes aren’t largely concentrated in the country’s southern half).
I definitely consider a more centralized government to be a bad thing, but the reality is that the smaller a state is in population and size, the more effective central planning can be.
#2 Sweden’s population is much more homogenous than the United States’
The Finns, who are by far the largest minority group, make up only 5 percent of Sweden’s population. Minorities as a whole make up just 5.6 percent of the nation’s people.
This isn’t to say that minorities are a good thing or a bad thing, it’s just to say that Sweden is extremely different from the United States, where minority groups make up well over 30 percent of the population.
#3 Sweden is not simply “further left” than the United States
The relative positions of the United States and Sweden on the political spectrum are more nuanced than “Right” and “Left.” For example, Sweden’s regulatory state is much smaller than its American counterpart, and the country also has no inheritance tax.
While it’s true that Sweden’s income tax rates are generally higher than those in the United States, the difference is not as big as you might think. The highest tax bracket in Sweden is 31 percent plus an extra 25 percent on everything above $88k (USD).
So a Swede making $200k would pay out around $90k in income tax, while an American living in Virginia making the same amount would pay around $77k — only 15 percent less. Obviously this is an oversimplification, but the point is that while income taxes are higher in Sweden, it’s hardly a revolutionary distinction.
#4 Sweden spends much, much, MUCH less of its GDP on defense than the United States
The United States spends about four percent of its GDP on defense. Meanwhile, Sweden spends about 1.2 percent of a MUCH smaller GDP on its military. How much bigger is 4 than 1.2? In this context, the answer is much, much bigger.
To put this in perspective, if we were to lower our defense spending to Swedish levels, we would be saving roughly $1,600 per American citizen. That’s enough to cover almost five months a year of health insurance for every single American. Unfortunately, there are very few politicians currently arguing for such a dramatic reduction in defense spending.
#5 Surprise: Sweden’s welfare state isn’t really that successful
The good folks at the Mises Institute have done extensive research on the myth of utopian Scandinavian welfare, revealing that:
- While Sweden has high rates of taxation, its saving grace is its relatively low amount of regulation.
- The idea that the United States and other Western nations are anything close to truly free markets is false, and therefore leads to false comparisons between the US as “free” and Sweden as “socialist.”
- Sweden and other Scandinavian states have avoided the military disasters and defense spending hikes of other Western powers.
Also, Sweden has struggled in recent years with youth unemployment. Some blame the problem on the ease of access to a university-level education that teaches very few marketable skills. (Sound familiar?)
However, there is certainly some link to the wider problem of youth unemployment across Europe. The European Commission reports that the youth unemployment rate across Europe averages about 23 percent.
That in and of itself is a high number, but if the European Commission uses an unemployment calculation that is anywhere near as ridiculous as that of the US Department of Labor, then you can bet that number is actually a lot higher.
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