In praise of Sweden


We're all familiar with the idea that Sweden is a social democratic hellhole where you cannot keep even an extra penny or krone for yourself but it gets taxed off you and used for the benefit of "society". But as our Danish correspondent has been pointing out here those Nordic social democracies are not quite as they seem. High tax rates, yes, high levels of redistribution, yes, but underneath that social democratic bonnet there's (to use the phrase of one commentator here) a surprisingly liberal capitalist economy purring along.

As is shown by the Swedish Government's reaction to Saab:

The “orderly wind-down" of Saab, one of Europe’s best-known car makers, began on Friday after talks to sell the business to Dutch car maker Spyker broke down.

The Swedish enterprise minister said the closure was “dismal news" and that GM “could have done much more for Saab over the years". However, the centre-right government has refused to bail out the business.

Recall the decades long mess that was British Leyland, the scurrying Ministers trying to "protect" the carcass of Rover, the screams that the White Van manufacturer must be "saved". Our reaction, or rather our Government's reaction, in the UK was that if no one wanted to buy the vehilces and no one wanted to buy the company that made the vehicles then we must support it with money pilfered from the pockets of those who didn't want to buy the vehicles.

The Swedish reaction is *shrug*, OK then, no one wants what the factory produces, close down the factory then. The land, the labour, the capital, will go off and do something else, produce something that people do want to buy.

Which is the more capitalist reaction, which is the more liberal and which is going to contribute most to future prosperity? Quite, it's the Swedish.

It isn't just their education system that we can learn lessons from you know.