Even Scandanavia Forced To Cut Size Of Welfare State

[Sancho Panza]

Yahoo/AFP 21/1/14

'The Nordic model, known for high taxes and its cradle-to-grave welfare system, is getting a radical makeover as nations find themselves cash-strapped.During the post-war period, the Scandinavian economies became famous for a "softer" version of capitalism that placed more importance on social equality than other western nations, such as Britain and the United States, did.

But globalisation, economic necessity and an ideological shift to the right has led to a scaling back of the public sector.

In Sweden, visitors are sometimes surprised to learn about year-long waiting times for cancer patients, rioting in low-income suburbs and train derailments amid lagging infrastructure investment.

"The generosity of the system has declined," said Jonas Hinnfors, a professor of political science at the University of Gothenburg.

"Much of this already started changing in the 1980s and especially in the 1990s," he added.

In the wake of a banking crisis in the early nineties, Stockholm scrapped housing subsidies, reformed the pension system and slashed the healthcare budget.

A voucher-based system that allows for-profit schools to compete with state schools was introduced, and has drawn attention from right-wing politicians elsewhere, including Britain's Conservative Party.

In 2006, conservative Prime Minister Fredrik Reinfeldt's government accelerated the pace of reform, tightening the criteria for unemployment benefits and sick pay while lowering taxes.

Income tax in Sweden is now lower than in France, Belgium and Denmark, and public spending as a share of GDP has declined from a record 71.0 percent in 1993 to 53.3 percent last year.

Once the darling of progressives, Sweden has become a model for free-market-leaning thinkers including British weekly The Economist, which last year hailed the scaled-down Nordic (SES: MR7.SI - news) model as "the next supermodel."

"They offer a blueprint of how to reform the public sector, making the state far more efficient," it wrote.

This month, the Wall Street Journal praised tax cuts and entitlement reforms in Sweden and Denmark that "are now discomfiting their big-government admirers overseas."

Although polls show strong support among Swedes for the income tax cuts of the past few years, the leftist opposition looks set to win this year's general election.

The Social Democrats, in power for much of last century, have been boosted by a string of scandals in private elderly care homes involving degrading treatment of their residents, and by plummeting school results in international rankings.

However, it's unclear how they will finance an improvement of public services, having already pledged to keep the popular income tax cuts.

If Sweden is the Nordic country to have gone the furthest in shrinking its welfare state, Denmark has moved the fastest.

When her Social Democratic government took power in 2011, there was little to suggest Prime Minister Helle Thorning-Schmidt would make any dramatic changes to the country's cherished welfare state -- funded by the world's highest tax burden.

After a centre-right government had raised the retirement age and reduced the unemployment benefits period from four to two years, "Gucci Helle" -- as she is known among her detractors -- went on to cut corporate taxes to 22 percent from 25 percent.

Other reforms have included requiring young people on benefits to undertake training, and withdrawing student aid to those taking too long to finish their studies.

It has left her deeply unpopular in some quarters. At last year's May Day speeches she was met by jeers as audience members sprayed her with a water pistol, threw tomatoes at her, and even flashed their buttocks.

For some of Thorning-Schmidt's allies -- notably the leftist Red Green Alliance -- the reforms have been too much to stomach, and in November her minority government had to seek support from the main opposition parties to pass this year's budget.

Denmark has been spurred into action by a persistently sluggish economy since a housing bubble imploded in 2007, leading to anaemic household spending.

But among Danes there is also a sense that the welfare state was ballooning out of control.

In 2011, a TV report aiming to show what life was like for the poor in Denmark visited the home of a single mother on benefits, whose disposable income turned out to be 15,728 kroner (2,107 euros, $2,860) per month.

"Poor Carina", as she was later nicknamed, sparked a national debate on the level of unemployment benefits, with one pollster crediting her with fuelling a rise in the number of people who felt benefits were too high.

The next Nordic country to reform its welfare state is likely to be Finland, battered by a downturn in the two pillars of its economy: the forest industry and information technology.

Helsinki responded to the crisis by announcing in August a slew of measures to put more Finns to work.

Under the controversial plan, the retirement age is to go up, time spent at university will go down, and incentives to enter the job market will be boosted for the unemployed and young mothers.

Only Norway looks unlikely to reform entitlements anytime soon, bolstered by its oil wealth.

The country is home to the world's largest sovereign wealth fund. Worth some 5,116 billion kroner (610 billion euros, $830 billion), each of the country's 5,096,000 inhabitants is -- at least on paper -- a millionaire.

New centre-right Prime Minister Erna Solberg has pledged to preserve the welfare state.'

[cashinmattress]

Only Norway looks unlikely to reform entitlements anytime soon, bolstered by its oil wealth.

May 17

[Snafu]

My facebook feed is filled with Swedish people I grew up with whinging about the state of affairs in Sweden. Very political. I'm almost glad I've become more nihilistic in the UK, as no one else gives a shit about anything.

[Pindar]

The myth that scandinavian countries are inflexible socialist dinosaurs is put to rest here

The rioting in Sweden has more to do with mass immigration than cutting back in the welfare state.

[cashinmattress]

My facebook feed is filled with Swedish people I grew up with whinging about the state of affairs in Sweden. Very political. I'm almost glad I've become more nihilistic in the UK, as no one else gives a shit about anything.

I've been there and have friends I visit from time to time. Most Swedes I know there haven't a clue about what their politicians do or Sweden's role in Europe, or indeed the world. The young are extremely ignorant of reality but will start waking up collectively at some point. Too many holidays and too much state mollycoddling and a general theme of underachievement. The state is too powerful and has blinkered them to much of what goes on. The riots were unheard of by most who lived there. Shocker. Whitewashed or completely edited out of media.

Edited January 21, 2014 by cashinmattress

[Snafu]

The myth that scandinavian countries are inflexible socialist dinosaurs is put to rest here

The rioting in Sweden has more to do with mass immigration than cutting back in the welfare state.

Sweden and the UK are probably going through the same thing. Immigration is big topic in Sweden but it's still very much along the lines of "if you are against immigration, you're probably a racist pig". The one party pushing against immigration is full of nutters so that doesn't help.

Top three topics:

Public sector spend diminishing

Feminism

Immigration

[Snafu]

I've been there and have friends I visit from time to time. Most Swedes I know there haven't a clue about what their politicians do or Sweden's role in Europe, or indeed the world. The young are extremely ignorant of reality but will start waking up collectively at some point. Too many holidays and too much state mollycoddling and a general theme of underachievement. The state is too powerful and has blinkered them to much of what goes on. The riots were unheard of by most who lived there. Shocker. Whitewashed or completely edited out of media.

Swedes are much more clued up and or active politically than the majority of people in the UK (without a doubt). Swedish people don't quite realize just how small Sweden is in the real world. Swedes like to think of themselves as an honest upstanding solidarity focused people - immigration seems to be (or perhaps was) one of the corner stones of the solidarity "with the world". Which riots do you mean, Swedish or UK?

[Sancho Panza]

The myth that scandinavian countries are inflexible socialist dinosaurs is put to rest here

The rioting in Sweden has more to do with mass immigration than cutting back in the welfare state.

I always enjoy Stefan Molyneux.Very thougth provoking piece.

[Sancho Panza]

Swedes are much more clued up and or active politically than the majority of people in the UK (without a doubt). Swedish people don't quite realize just how small Sweden is in the real world. Swedes like to think of themselves as an honest upstanding solidarity focused people - immigration seems to be (or perhaps was) one of the corner stones of the solidarity "with the world". Which riots do you mean, Swedish or UK?

I think he means these ones in May 2013.They don't sound that large scale.

http://www.theguardian.com/commentisfree/2013/may/27/swedish-riots-inequality-stockholm

'More than 20 cars torched in one night. School classrooms gutted by fire. Fifty far-right extremists chasing immigrants around a suburb.You probably haven't seen much about it in the papers, but for the past week Sweden has been racked by rioting. The violence began in a suburb of Stockholm, Husby, and spread around the capital's edge before other cities went up in flames. Police have been pelted with stones; neighbourhoods have turned into no-go areas, even for ambulances. Such prolonged unrest is remarkable for Stockholm, as those few reporters sent to cover it have observed.

[darwin]

Yahoo/AFP 21/1/14

Only Norway looks unlikely to reform entitlements anytime soon, bolstered by its oil wealth.

The country is home to the world's largest sovereign wealth fund. Worth some 5,116 billion kroner (610 billion euros, $830 billion), each of the country's 5,096,000 inhabitants is -- at least on paper -- a millionaire.

New centre-right Prime Minister Erna Solberg has pledged to preserve the welfare state.'

[Pindar]

Sweden and the UK are probably going through the same thing. Immigration is big topic in Sweden but it's still very much along the lines of "if you are against immigration, you're probably a racist pig". The one party pushing against immigration is full of nutters so that doesn't help.

Top three topics:

Public sector spend diminishing

Feminism

Immigration

Feminism is ironic, considering the islamification that's rife in some parts of Sweden. Spending on elderly care was drastically curbed in recent years and the state is, like the UK, completely out of touch with reality and thinks it'll all "come out in the wash". Mass immigration is, IMHO a deliberate strategy to dilute the quite strong sense of solidarity. It's the same in the UK and it also serves to depress wages.

[Oliver Sutton]

The myth that scandinavian countries are inflexible socialist dinosaurs is put to rest here

The rioting in Sweden has more to do with mass immigration than cutting back in the welfare state.

That bloke is clueless.

Since when has Switzerland been in Scandinavia?

His GDP per head graph stops in 2006 since when Sweden has overtaken USA according to the World Bank . (of course he won't have included Norway in there but he does mention Norway when it suits him)

[Pindar]

That bloke is clueless.

Since when has Switzerland been in Scandinavia?

His GDP per head graph stops in 2006 since when Sweden has overtaken USA according to the World Bank . (of course he won't have included Norway in there but he does mention Norway when it suits him)

Hardly clueless - mentioning Switzerland doesn't actually mean he thinks Switzerland is in Scandinavia - as far as I can tell he's using it for comparative purposes. You can hardly argue with the figures he shows, particularly things like corporation tax of which the US has higher figures than all the Scandinavian countries. There's a great myth that the US and its satellite countries in Europe are capitalist when nothing could be further from the truth. They're collectivist with close coupling between government and business. Some might argue that this makes them fascist.

[Snafu]

Hardly clueless - mentioning Switzerland doesn't actually mean he thinks Switzerland is in Scandinavia - as far as I can tell he's using it for comparative purposes. You can hardly argue with the figures he shows, particularly things like corporation tax of which the US has higher figures than all the Scandinavian countries. There's a great myth that the US and its satellite countries in Europe are capitalist when nothing could be further from the truth. They're collectivist with close coupling between government and business. Some might argue that this makes them fascist.

Corporatism is indeed strong in Sweden or at least was. Sweden is very different now to the land of "folkhemmet".

[Snafu]

Feminism is ironic, considering the islamification that's rife in some parts of Sweden. Spending on elderly care was drastically curbed in recent years and the state is, like the UK, completely out of touch with reality and thinks it'll all "come out in the wash". Mass immigration is, IMHO a deliberate strategy to dilute the quite strong sense of solidarity. It's the same in the UK and it also serves to depress wages.

My cousin is a staunch social democratic feminist pro anything lefty and sees no issue with islamification/import of middle eastern and african culture. How that tallies with her feminism i have no idea

[Oliver Sutton]

You can hardly argue with the figures he shows

Why does the GDP per head graph end in 2006?

[Pindar]

Corporatism is indeed strong in Sweden or at least was. Sweden is very different now to the land of "folkhemmet".

The same in Norway which also has its fair share of nihilistic leftists who think that cultural genocide is cool. The problem with that kind of indoctrinated belief is that it's very difficult to undo.

[Pindar]

Why does the GDP per head graph end in 2006?

Why don't you ask the author of the video?

[Oliver Sutton]

Why don't you ask the author of the video?

You're the one who says you can't argue with his figures.

Don't you think that's bit strange?

[Pindar]

You're the one who says you can't argue with his figures.

Don't you think that's bit strange?

Not really. Maybe he didn't have figures beyond 2006. I'd be more inclined to scrutinise some of the bizarre figures that the government comes up with, like for inflation etc.

[Oliver Sutton]

Not really. Maybe he didn't have figures beyond 2006.

Of course he didnt !! Keep believing.

This video is BS.

He produces a graph for public spending vs wealth growth then says "so of course it makes a huge difference in your standard of living" and then uses figures for "economic freedom", a totally different metric, to justify this.

[Pindar]

Of course he didnt !! Keep believing.

This video is BS.

He produces a graph for public spending vs wealth growth then says "so of course it makes a huge difference in your standard of living" and then uses figures for "economic freedom", a totally different metric, to justify this.

It's not a matter of believing, the figures speak for themselves, no matter what your personal interpretation is. Economic freedom does produce wealth. When the government/state grows too big and micromanages everything, the host dies back. Looking at the figures from this video as a whole tend to reinforce this fact, despite your protestation.

[Olebrum]

Swedes are preparing to punish the government for cutting their taxes.

[Oliver Sutton]

It's not a matter of believing, the figures speak for themselves, no matter what your personal interpretation is. Economic freedom does produce wealth. When the government/state grows too big and micromanages everything, the host dies back. Looking at the figures from this video as a whole tend to reinforce this fact, despite your protestation.

You're conflating economic freedom and size of government.

Apparently you can have big government and high economic freedom.

Scanny countries all in the top 20 for economic freedom.

Gist of the video is Scanny countries have high economic freedom and that's why they are rich.

and

Scanny countries are socialist and that's why they aren't rich.

That bloke sounds confused to me.

Edited January 22, 2014 by Oliver Sutton

[Pindar]

You're conflating economic freedom and size of government.

Apparently you can have big government and high economic freedom.

Scanny countries all in the top 20 for economic freedom.

Gist of the video is Scanny countries have high economic freedom and that's why they are rich.

and

Scanny countries are socialist and that's why they aren't rich.

That bloke sounds confused to me.

Not sure it's as black and white as that. I think what he's getting at is more of a kick in the face for the ideological misnomer that is socialism. A hangover from the 1980s when the media constantly drip fed the idea that Thatcherite neo-liberalism was good and socialism was bad. Like there was nothing in between and that the only acceptable range of opinions or political systems had to fit into a very narrow set of pigeon holes.