Sweden's social welfare popularity


Among the intellectual feast that was this summer's Stockholm meeting of the Mont Pelerin Society was a challenging and controversial paper on the popularity of Sweden's social welfare system [pdf here]. As Sweden has progressed from its outrider position on social democracy into a fairly mainstream OECD economy, the popularity of their generous and far-reaching welfare system has not diminished. Indeed, opinion poll evidence suggests it has increased.

The explanation was provocative. It is that Sweden is not a community paradise in which everyone accepts the state provision as fair and equal. Rather it is that changes to Swedish welfare have allowed people to tailor it to suit their own individual circumstances. The school reforms allow them to choose with state money the schools they would have chosen if they had had to pay fees direct to the school instead of via taxation. Similarly in areas like sickness and unemployment cover, people now routinely use private cover to top up the level of state provision to the degree of cover they prefer.

The rule is that it is easier for people to top up a modest state coverage than it is for them to sell off any surplus if the state coverage is more than they need. So topping up is now normal, allowing people to augment state cover to the level of welfare coverage they feel they need. The popularity of Sweden's system rests, it is suggested, on the fact that it provides through taxation something fairly close to what people would have chosen had they been spending their money directly.

The key to that is the scope for individual variation. In place of a one-size-fits-all blanket state coverage, there is opportunity throughout for it to be tailored to individual circumstances. It is a remarkable thesis, with lessons for the UK if it is borne out. Maybe we should be looking at ways that allow UK citizens to tweak and tailor our state services and welfare to suit their own individual needs?

Check out Dr Madsen Pirie's new book, "101 Great Philosophers."