Home > Uncategorized > The Swedish model is dying

The Swedish model is dying

from Lars Syll

The 2017 OECD Economic Survey of Sweden — presented today in Stockholm by OECD Secretary-General Angel Gurría and Sweden’s Minister of Finance Magdalena Andersson — points out that income inequality in Sweden has been rising since the 1990s.

sweden-2017-oecd-economic-survey-growing-moreequal-12-638

inequalities-have-widened

I would say that what we see happen in Sweden is deeply disturbing. The rising inequality is outrageous – not the least since it has to a large extent to do with income and wealth increasingly being concentrated in the hands of a very small and privileged elite.

gini sweden 1980to2012
Source: Statistics Sweden and own calculations

A society where we allow the inequality of incomes and wealth to increase without bounds, sooner or later implodes. The cement that keeps us together erodes.

The development in Sweden is going in the wrong direction. The main difference compared to UK and US is really that the increasing inequality in Sweden (going on continuously for 30 years now) started from a lower starting point.

The OECD survey confirms that Sweden is no longer the model country it once was, in the heydays of the 60s and 70s. It’s no longer the country of Olof Palme. Just as in so many other OECD countries, neoliberal ideologies, economists and politicians have crushed the Swedish dream that once was.

It’s sad. But it’s a fact.

  1. patrick newman
    February 11, 2017 at 11:20 am

    The problem is that the forces protecting the process of increasing inequality are formidible. The taxation and welfare policies of social democratic parties only modulate the trend to inequality but should not be discount quickly. However the way forward must be a combination of deliberate full employment (i.e. 2 – 3% unemployment where vacancies exceed job seeker numbers greatly) QE for the people – e.g. helicopter money, a minimum hourly rate growing faster than inflation and UBI. This must be complemented by non monetary citizeen value through investing in public services, especially education, health and housing. None of this demands a 21st century version of the Soviet Union.

    • February 11, 2017 at 6:09 pm

      Very sane comments! I think of “non monetary citizen value” as community wealth, as opposed to individual wealth.

  2. Jorge Buzaglo
    February 11, 2017 at 3:31 pm

    After the US, India and Australia, Sweden is the country where the income share of “the one percent” increased the most since the 1980s (source: Facundo Alvaredo et al., “World Wealth and Income Database,” World Inequality Lab, http://wid.world, accessed October 2016; see Chart 2 in: Michael D. Yates, “Measuring global inequality,” Monthly Review, Volume 68, Issue 06, November 2016).

  3. February 11, 2017 at 6:21 pm

    The inability of legal expertise to tackle creeping inequalitty (locally and globally) is part of the problem. Legal requirements affecting several aspects of economic policy must be put in place and constantly renewed. New legal thinking is needed.

  4. February 11, 2017 at 11:47 pm

    Troubling post. The late Tony Judt saw it coming. To Patrick Newman’s good list of remedies, for the US, I support the “Right to a Job” and a green CCC and WPA to make up for the ground under that full employment when the private sector cannot get it done; to make the CCC and WPA not just the measures adopted when the economic world collapses, but standard policy. In many ways for the target populations I have in mind, they have depression level rates of unemployment.

    I have no problem personally with the Universal Basic Income, but I can’t see it for the US cultural mores as being better than a CCC and WPA. The American Right still holds very punitive attitudes towards gov’t assistance programs, and the fact that someone is working to obtain them and doing something constructive can work to combat this attitude.

    If the formal statistics on the unemployment rate are correct, it is hard to explain the mood of the voters in 2016; a significant disjuncture.

    • February 13, 2017 at 2:37 am

      The problem with a UBI is that it is utterly impossible. No country will ever, can ever have a real UBI. It is as unrealistic – and for the same reasons – as Marie Antoinette’s “Let them eat cake.” The impossibility is perfectly obvious to ordinary people & to sane economists (e.g. MMTers, or Austrians even). But even some otherwise sane or intelligent people & economists support it. But why not just ask an ordinary working person (sansculottes, Trump voters perhaps) what they think? The pro-UBIers may be more “educated”, but the response they would get from an ordinary person will make logical sense, unlike the “reasoning” of pro-UBIers.

      It’s not a matter of preference, cultural mores or personal problems. It just ain’t possible. It is a struggle to get UBI/BIGers to even understand that plain statement. Comparing capitalist societies (with “wage-slavery”) to slave ones can be enlightening if done carefully, in pursuit of understanding rather than emotion. The analog of a UBI would be a slave society – where everyone is a master, nobody a slave. Do I really have to explain why this is absurd? Or take a look at a monetary society with just one person, or just two people. Can a UBI work then? Obviously not. The arguments scale up.

      Today’s Switzerland is a small, rich, exporting country with a historically strong “reserve” currency in high demand, surrounded by a continent that is in a depression & completely innumerate and economically ignorant. So it is the country in the world where the incredibly stupid idea could “work” the longest – but Switzerland, neither innumerate nor ignorant, it appears, voted it down 77%-23%.

      As for positive suggestions – WPA/CCC/JG full employment policy- as standard policy forever – is far more important and powerful than the other suggestions put together. The American right has no real problem with government assistance programs – as long as they are welfare for the rich. But most of the struggle again is getting people to see the obvious – to see that the main economic policy of the government is massive welfare for the rich.

  5. February 12, 2017 at 6:01 am

    The increase in inequality is a cultural artifact. It is the result of cultural, not economic or technological changes. Two cultural changes seem to stand out. First, there is the notion of ownership. Owning has become fixed and inviolate. What one person owns, no matter it’s impacts on other persons or society cannot be taken from that person, under any circumstances. Second, society (community) has been de-legitimated. It’s been made into a notion that endangers “personal” freedom by limiting and regulating it for the benefit of something that’s at best a fantasy. These changes call morality into question, since morality is concerned with proper interactions. Human to human and human to nature. With morality attacked and sidelined, civility is difficult to establish and enforce. We’re set adrift on an uncharted and unchartable ocean. Per Amitai Etzioni, “People must temper individual rights with mutual responsibility.” Right now such temperance is MIA.

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