It's been all too common for pro-socialist politicians here and elsewhere to talk up Sweden, to offer up it's "pro-socialist" policies and welfarate-state programmes as examples for us all to emulate. "Look," they say, "they have socialism and prosperity!" Problem is, as Swedish writer Johan Norberg explains in this guest post, that Sweden was most pro-socialist way back in the Seventies, when it was squandering the riches of a century, and it's only become prosperous as it's abandoned that notion, and embraced instead "a new period of liberalisation and of economic reform” ...

Johan Norberg: Bernie Sanders’ Vision of Sweden Is a 1970s ‘Pipedream’

When Senator Bernie Sanders and others like him talk about Sweden as a socialist paradise, they are promoting a tax‐​the‐​rich “pipedream” from the 1970s that never really existed, said Johan Norberg, a Swedish author, historian of ideas. Sweden today is a “much better and much freer place” than it was in the 1970s, says Norberg from his home in Stockholm.

“So today, if Bernie Sanders wants to imitate Sweden, he would have to reform Social Security, partially privatize it,” said Norberg in an interview with ReasonTV, a division of Rea​son​.com. “He would have to … abolish property taxes and inheritance taxes, and stuff like that, implementing national school voucher systems…. So, Sweden today is not what he remembers from the 1970s. It’s a much better and freer place than it was back then.”

Norberg, also a documentary filmmaker, earned his M.A. in the History of Ideas at Stockholm University. His latest book is The Capitalist Manifesto, which was praised by Elon Musk on X. During the ReasonTV interview above, Norberg was asked to respond to some of Sanders’ glowing comments about Sweden, which the self‐​described socialist had made during his 2015 presidential campaign.

In an inserted news clip, Sanders said, “In countries in Scandinavia, like Denmark, Norway, Sweden, they are very democratic countries obviously. Their voter turnout is a lot higher than it is in the United States. In those countries, health care is a right of all people. In those countries, college education, graduate school is free. In those countries, retirement benefits, child care are stronger than in the United States of America. And in those countries, by and large, government works for ordinary people and the middle class rather than, as is the case right now, in our country, for the billionaire class.”

Bernie Sanders: "Look, ah, Sweden!"

When news host George Stephanopoulos then said that Republicans would run an attack ad accusing Sanders of wanting to make America more like Scandinavia, the senator replied, “That’s right, that’s right.”

ReasonTV host Zach Weissmuller then asked Norberg to comment on Sanders’ remarks. Norberg replied,

"This is why Sweden is not a libertarian paradise. We might have free markets, but we do have a very generous welfare state. It’s true that many of these things are handed out by the government – it’s funded by the government at least through private providers. But the thing is we pay for these things ourselves. That’s an incredibly important point to make. Because there is this pipedream of Bernie Sanders and others that this will somehow be paid for somehow by the rich.”

Norberg continued:

“But Sweden learned in the 1970s. You can pick one: a big generous welfare state or you can make the rich pay for it all. You can’t have both. If you have a universal generous welfare state, and make the rich pay for it all, they will stop being rich. They will move. They will stop starting those businesses, the Ikeas of the future, and will move. Instead, you have to get most of the taxes from low‐ and middle‐​income households. That’s the dirty little secret of the Swedish welfare state.

“The socialists love the poor taxpayers because they are reliable, loyal taxpayers. They don’t dodge. They don’t move to Monaco. They don’t have tax attorneys. So we have the bulk of our government revenue coming from regional and local income taxes, which are flat. Income taxes are not progressive…. Also, things like a value‐​added tax at 25%, in general, on most goods. It’s obviously regressive. The poor pay as much as the rich when they buy food, in taxes.

“This means that when the OECD club of mostly rich countries look at different tax systems around the world, they say that the Swedish system is one of the least progressive tax systems of all. Much less progressive than the United States because America’s welfare state is so small, so you can rely more on the rich. Whereas here, we all have to pay for it.

“The Swedish welfare state mostly just redistributes over an individual’s life cycle. We get lots of stuff when we’re young, in preschool and school, and then we work hard and pay for it all, and then we get much of it back in health care and retirement benefits. Which mostly means, yes, we get lots of stuff but we pay for it all….

“It’s so interesting that socialists keep coming back to Sweden and I think that’s because all their favorite countries constantly fail. Every Cuba and Venezuela ends up with bread lines, millions trying to escape from that horror show. But they always have Sweden. It seems so friendly and successful and yet socialist.

“We have been socialist in Sweden and we have been successful but never at the same time. That’s what Sanders and the others fail to realize. We had that period in the 1970s and 1980s when Sweden was doubling the size of public consumption, raising taxes, regulating everything – price controls, what have you. This is the moment when Bernie Sanders and all those who are sort of stuck in the 1970s, this is what they still remember: ‘Look at Sweden! They’re socialist! But they’re also one of the richest countries on the planet! It seems to be working in Sweden.’

“The problem, of course, is that it’s like that old joke, how do you end up with a small fortune? Well, you start with a large fortune and then you waste most of it. That’s what Sweden did in the 70s and 80s. We were one of the richest countries on the planet before this experiment. And this was based on a 100‐​year period of limited government, free markets, free trade, as late as 1960. We had lower taxes than the United States and most European countries. This brought us all the wealth and all those successful international companies, the Ikeas and stuff, that brought us so much wealth that politicians thought they could just redistribute everything and begin to just jack up spending and taxes.

“Well, they couldn’t. Because the 70s and 80s, that’s the one period in modern Swedish economic history when we lagged behind other countries. This is the moment when we didn’t create a single net job in the private sector, and when entrepreneurs and businesses left Sweden. Ikea left Sweden. Tetra Pak left Sweden. Most successful entrepreneurs left because it was impossible to do business in Sweden. This all ended in a terrible financial crash in the early 1990s.

“So that was a brief period of time and it’s one that we don’t want to go back to in Sweden. Not even Swedish socialists – even they say, okay, we went too far. The Social Democrat finance minister at the time said it was actually absurd and perverse in many ways, what we were trying to do. Since then, Sweden has again become successful. But that’s based on a new period of liberalization and of economic reform.”

Perhaps that is the Swedish model policymakers should try to emulate.

* * * * * 

This post first appeared at the Cato Institute blog.

We have to talk about Sweden

 

There have been more modern fairy tales peddled about Sweden than even Hans Christian Andersen could dream up – and I don’t just mean whatever the American president thought he was talking about the other night.

The far-off place has become a convenient political talisman for the misinformed of both sides of the statist coin: both left and alt-right. The former insist that Sweden is that exception, a welfare state that doesn’t eat itself. The latter tell stories about “no-go zones” and “rapefugees.” Neither has much basis in fact.

The first myth is intended to tell the story that welfare-state socialism works better than markets. But, as Johan Norberg thoroughly and repeatedly demonstrates, Sweden's history in fact points to the opposite conclusion: that it was laissez-faire that delivered the riches, on which the looters are now feeding.

The second myth is supposed to tell us that immigrants and refugees are bad news, and Sweden’s crime statistics are supposed to show that. Politicians, commentators and internet trolls of the alt-right variety tell stories of crime exploding under a refugees engulf the country’s towns and cities, citing alleged crime statistics from fake think tanks showing, they say, that Sweden’s once-lovely places are now so teeming with these nasty people that rape has rocketed and violent crime has exploded.

Trouble is, that’s that not what actual Swedish criminologists citing actual Swedish crime statistics actually tell us. Is “the country's welcoming approach to refugees and its alleged effects on crime rates a warning sign”?

“Absolutely not,” said Felipe Estrada, a criminology professor at Stockholm University. His response was echoed Monday by multiple other experts who are familiar with Swedish crime statistics.
    Overall, Sweden's average crime rate has fallen in recent years, Estrada said. That drop has been observed for cases of lethal violence and for assaults, two of the most serious categories of crime.
    Moreover, an analysis by Swedish newspaper Dagens Nyheter, conducted between October 2015 and January 2016, came to the conclusion that refugees were responsible for only 1 percent of all incidents.

Clear enough.

Support also comes from “Germany, the other European country that took in similar numbers of refugees per capita in 2015.” Here also claims that the influx led to an increase in crime are unsupported by actual evidence.

“Immigrants are not more criminal than Germans,” an interior ministry spokesman said in June. Overall, crime levels in Germany declined over the first quarter of 2016, officials said last year.

So why, apart from the obvious reasons that rabid anti-immigration types might dream up rabid claims, does the myth persist? Say criminologists:

Reports about alleged police coverups of refugee crimes might have contributed to distrust in official statistics. Criminologists also say that a handful of cases have received disproportionate public attention, creating a distorted perception among Swedes.
    “What we’re hearing is a very, very extreme exaggeration based on a few isolated events,” Jerzy Sarnecki, a criminologist at Stockholm University, told the ‘Globe and Mail’ newspaper in May, when coverage of refugee-related crimes reached a peak.

Read that line again: “Very extreme exaggeration based on a few isolated events.” Just part of the logical fallacy subsumed under the principle understood by the phrase “a picture is not an argument.”

There is however “one statistic in which Sweden does indeed lead international crime statistics, though: reported cases of rape.” So does this support the alt-right myth, then? No, say criminologists, only if you don’t understand (or don’t care to understand) how the statistics are gathered.

“The [definitions] of rape differ between countries,” Estrada said. “In Sweden, several changes in legislation have been made to include more cases of sexual crimes as rape cases.” Sweden's definition of what constitutes rape is now one of the world's most expansive. Varying figures, as well as other Swedish measures to facilitate rape complaints, might have affected statistics, as well.

This has been pointed out several times in the comments to my regular alt-rights trolls, so I have no expectation of any increase in understanding this time. But just understand when you do hear the claim that this would be just another form of the fake news the alt-right keyboard warriors claim to revile.

So what about these alleged no-go zones like Malmo? What about that then? Sorry, say criminologists, that too is another fairy tale.

Swedish crime experts also do not agree that immigrants have created so-called no-go areas in Sweden — areas that allegedly are too dangerous for native Swedes to enter and are effectively run by criminals. “This perception is fabricated,” Estrada said. But he and others pointed out that the refugee influx poses challenges to Sweden, just not in the way it is being portrayed by some.
    “Even [though] there are no 'no-go zones' as alleged in the propaganda, there are problems around crimes and disturbances in several suburbs of Swedish cities, where immigrant groups tend to be over-represented,” said Henrik Selin, director of intercultural dialogue at the Swedish Institute.

Just as you’d expect. We’re not talking utopias here, we’re talking about real places with real human problems – problems made harder, not better, by gross exaggeration.

Fascinatingly, an Alt-right editor has challenges journalists to visit Sweden to discover for themselves the facts he alleges about the place. Paul Joseph Watson (he’s the alt-right Brit conspiracy theorist who isn’t an apologist for paedophilia) has offered to personally stump up the fare for them to Malmo– an offer already taken up by one enthusiastic punter, and responded to by Malmo’s deputy mayor, who promises any and all visiting journalists a warm welcome and to go with them on any jaunts to the zones to which Mr Watson alleges they can’t go.

Sure, all is not well in Malmo, but neither is it the war zone alleged by the fetid fringe. “Seeing Scandinavia’s largest country, with its reputation for high living standards, good governance, and low crime, thrust into a sort of police line-up of multicultural Europe’s failures felt,” says Irishman Feargus O’Sullivan who’s already visited and researched the place for himself, “a bit like seeing your neighbour’s lovable pet guinea pig being ducked as a witch.”

Is there any truth in the accusations? The short answer is no. Malmö is actually a likable, easy-going kind of place. Facing Denmark and Copenhagen across the Oresund Strait (a distance spanned by a bridge since 2000), it’s a historic, faintly gruff port city of 342,000 residents—think Liverpool to Copenhagen’s Paris. Or to make an American comparison, an Oakland to the Danish capital’s San Francisco. By Scandinavian standards, it’s ethnically diverse, bustling, and ever so slightly unkempt. By the standards of just about anywhere lying southwards, however, its streets come across as trim, orderly, and, peaceful.
    Certainly, Malmö is a city whose urban (but not greater metropolitan) population has been substantially reshaped by immigration. A third of its population was born outside Sweden, with the largest groups coming from (in order) Iraq, Serbia, Denmark, and Poland. Rates of arrival have gone up in recent years. What hasn’t risen, however, is crime.
    In fact, Malmö’s violent crime figures would make the mayor of an average American big city weep with longing. With 12 murders in 2015 among a population of 342,000, Malmö’s murder rate is two thirds that of Western Europe’s real murder capital of Glasgow, and half that of Los Angeles. By contrast, Washington, D.C., has a murder rate almost seven times higher, while the rate in St. Louis, Missouri is just under 17 times higher. In relatively safe Sweden, those 12 murders are still cause for rightful alarm, but as this piece makes clear, Malmö’s crime figures aren’t just low compared to most American cities—they’re not even the highest in Sweden.

Read that sentence again, please: “Malmö’s crime figures aren’t just low compared to most American cities—they’re not even the highest in Sweden.”

So all is not utopic in the Scandinavian paradise, and journalists and the commentariat will continue to use its occasional incidents to cherrypick, but if this really is the best place anti-immigrationists can dredge up to support their argument, then they ain’t got one. And as far as intelligent debate about immigration goes, let’s (please) look at actual evidence, not the manufactured stuff of Machiavellian commentators and think tanks.

“Sweden definitely, like other countries, [faces] challenges when it comes to integration of immigrants into Swedish society, with lower levels of employment, tendencies of exclusion and also crime-related problems,” [Henrik Selin at the Swedish Institute concluded]. There is little evidence, however, that Sweden has turned into the lawless country it is at times being described as abroad.

[Quotes and pics from Washington Post, BBC News and City Lab]

.

No, Sweden Doesn't Have it Figured Out (with Johan Norberg)

Guest post: Tom Woods interviews Johan Norberg

Bernie Sanders,” Tom Woods writes, “United States senator from Vermont and self-described socialist, has surprised everyone with the vigour of his 2016 presidential campaign, both in terms of size of his crowds and the strength of his fundraising.
    “His message, on the other hand, is garden-variety leftism, particularly in economics, where he speaks as if the private sector can be ceaselessly burdened with no ill effects on anyone, except a bunch of greedy fat cats who deserve what they get.”
     One of the garden-variety myths the moron is peddling is about Sweden and the alleged success of their brand of welfare-state socialism. As Scott Sumner points out:

The heart of the Democratic Party is now with Bernie Sanders, whatever the polls show. And let’s not have anyone accuse me of McCarthyism, he calls himself a “socialist.” When asked, the head of the Democratic Party couldn’t think of a single difference between socialists and Democrats. And please don’t insult my intelligence by talking about Sweden. Sweden is not a socialist country. Venezuela is socialist. When Sanders starts advocating free trade and investment, liberal immigration rules, privatization, zero inheritance tax, 100% nationwide school vouchers, a $0/hour minimum wage rate, then come back to me with your Sweden talk. For now, he just wants the bad parts of Sweden.

In the first chapter of his latest book Bernie Sanders is Wrong, [which he’s made available for free download]Tom Woods asks Swedish author, lecturer and documentary film-maker Johan Norberg about the truth behind what everyone hears about Sweden …

WOODS: Sweden comes up with surprising regularity in the United States, and it comes up not because people have some interest in Swedish history and culture, I’m sorry to say.

It’s because they want to use Sweden as an ideological bludgeon with which to beat people who are skeptical of state power. So I want to talk to you, as somebody who was born in Sweden, who is speaking to us from Sweden right now, and who is very knowledgeable about Sweden, to help clear this up for an American audience.

Are Swedes aware that their society is held up as a model for how political organization and the economy ought to be arranged?

NORBERG: I think we are aware of that. We have noticed throughout the years that people actually tend to like Sweden for some reason, perhaps because we’re kind of small and insignificant, and we’re not very threatening. So people tend to think of Sweden as a nice, decent place, peaceful. We don’t bother people.

And then they tend to like different aspects of what they see. I think of Sweden as a kind of Rorschach test, a kind of psychological test where you have some ink which doesn’t portray a particular picture or anything, but you see what you like to see.

You see what you think about in the back of your mind and in your subconscious. So some people see this as a nice, open economy – a globalized, free-trade economy. Others look at the government and think, oh, it’s the perfect, big government, socialist country. And others see other things. It could be free love or the pop music. People tend to like Sweden. That’s something we’re very aware of.

WOODS: You have an article alleging that Sweden actually succeeded economically not because of welfare state spending and government intervention, but both in spite of those things and prior to those things. So can we go back and look at the history of Sweden?

When do we begin to see robust economic growth, and what was the role of the state at that time?

NORBERG: When you start to think of when Sweden was really a successful economy that the rest of the world looked at, you begin to notice Sweden in the 1950s, ’60s. In 1970, Sweden is one of the richest countries on the planet. I think the per-capita income is the fourth most prosperous on the planet, and that’s after a 100-year period of rapid economic growth – one of the fastest in the world.

Probably only Japan beat us during those years. So you would have to say that this starts sometime in the 1870s, which is interesting, because at that time Sweden had gone through a liberalisation and deregulation process.

Between 1840 and 1870, we had a major political movement of classical liberalism, of a laissez-faire liberal attitude where they wanted to reduce government to open up to free trade, deregulating industry and so on.

And it’s sort of a funny anecdote: the minister of finance, who was one of the pioneers of these reforms, left in the mid-1860s after having really liberalised and opened Sweden up, and his opponents said, oh, now you’re leaving because you don’t want to see the failures that you brought upon us and the problems that Sweden will experience after these reforms.

But what happened was that growth really took hold. If you want to look at one particular set of numbers, between 1860 and 1910, right before the First World War, real wages in Sweden increased by 25 percent per decade in manufacturing. That’s much faster than before and much faster than afterwards -- which is interesting, because that’s 20 years before the Social Democrats ever got power in Sweden.

So the real boom happened during this laissez-faire period. Public spending was still below 10 percent, and Sweden was one of the most open economies in the world.

WOODS: This seems to be a common feature of a lot of left-wing commentary. They’ll look at a snapshot of a society in a particular year without looking at the video, so to speak, of that society. What had been going on prior to that snapshot?

We see this in the debates over the regulatory state in the U.S., for example. We’ll look at a regulatory agency, and we’ll see that after they created it, the result was that – for example – there were fewer workplace fatalities. What they don’t ask is: what was the already existing trend in workplace fatalities before we got this agency? And it turns out that workplace fatalities were already falling dramatically! Likewise, in the story of Sweden, we don’t get what you just told us about the growth in wage rates before all the interventions came, but that’s three-quarters of the story!

NORBERG: Exactly. That’s an incredibly important point. A lot of people look at Sweden and say – and especially, they used to do that when we were at the peak of the big government and the welfare state in the 1980s – look, Sweden is very prosperous, and at the same time, taxes and spends heavily. It’s a very almost socialist economy, and yet they are rich. Why is that? Well, it reminds you of the old joke: how do you get a small fortune?

Well, you start with a big one, and then you make a couple of mistakes, and then you end up with a small fortune. We had this tremendous growth during the years when Sweden had the most open economy and the smallest government. Even when the Social Democrats began to get power in the 1930s, they understood this economic model, and they didn’t want to interfere too much. They were actually heavily influenced by a couple of famous classical liberal economists.

[TW note: “Classical liberalism” refers to 19th-century liberalism, which was much closer to modern libertarianism than it was to modern American liberalism.]

So most of the time, they were open for business and chose free trade. As late as the early 1950s, Sweden had lower taxes and less public spending than in the United States and the rest of Europe, and that gives you a perspective on why this happened. You built this big fortune under these circumstances.

In early 1970, Sweden was one of the richest countries, and then the Social Democrats began to hike public spending, increase taxes, and so on, but they could do that only because we already had that wealth because of this free-market period -- and also, obviously, because Sweden had stayed out of two world wars. That meant that our industry was intact, we exported to both sides, and the young men of the country were still alive and able.

WOODS: I think a skeptic might come back at you and say, if Sweden really had been doing that well, then how could the arguments for the welfare state have gotten any traction?

NORBERG: Yeah, and that is a good question. It’s one that both historians and economists think about quite a lot when that happens, but actually, it follows a fairly normal pattern in most countries around the world.

You get rich, and then you begin to take that wealth for granted. He who has satisfied his thirst turns his back on the well in a way. You begin to take it for granted. You don’t think of the preconditions for creating more wealth, building these new businesses, and the kind of fierce competition and openness that it takes.

So instead, you begin to demand all of it at once. You begin to build these pressure groups who want more access to this wealth and more evenly distributed wealth. And that’s, I think, what began to happen in the 1970s. We were so rich so that we thought that we couldn’t make any mistakes anymore.

We could throw out the economics textbooks, and we could begin to think of other things, like a fairer distribution of wealth, how to make sure that everybody got a piece of the action.

WOODS: And that is one of the arguments that is made by American progressives today. They will say: whatever else you can say about Sweden, it has more economic equality than we see in the United States.

NORBERG: And that is true, partly because of more redistribution. But also, even here you need some historical perspective to understand where we’re coming from. Sweden had a fairly equal distribution compared to many other countries during this openness period as well, partly because it’s a very small country -- even today just 10 million inhabitants -- and a homogenous country, which meant that there weren’t these huge diversities when it came to wealth. Sweden didn’t even have a feudal period like the other European countries.

So we were all, in a way, property-owning farmers when we started out. So we had a history of more equality, more trust, societal trust, between people. This social trust, though, also made it easier for people to accept bigger government. Because when that happened in other places, people were very suspicious: what happens when they take our money away? Will they just divert it to their own use?

Will it be inefficient? Will it be bureaucratic? Well, Sweden has always had in a way a fairly efficient and non-corrupt public sector and civil servants. And a lot of trust: you don’t think of the government historically as someone who is there to loot and take it all away from you. They’re more like your neighbours, in a way.

So you trust them, and then you trust them a bit too much. And of course, all power corrupts in some way. And that’s what happened during these years, when the government grew rapidly in the 1970s and the 1980s and public spending actually doubled in just two decades, from 30 percent to 60 percent. That was really the start of the welfare state in Sweden.

Click here to download your FREE copy and keep reading…

---

Johan Norberg -- a native of Sweden, a classical liberal and a globalist -- is an author, lecturer, and documentary filmmaker.  Visit his website at www.JohanNorberg.net. 
This post first appeared at Laissez Faire Books.

The Economics of Bernie Sanders

Bernie Sanders is not a new Mao or Marx. He’s really just a modern New Dealer recycling old New Deal plans and rhetoric. And, just like the original, Sanders’s New Deal would do nothing to end the current economic malaise, and much to prolong it, says guest poster William L. Anderson.

---

As the political campaign of Hillary Clinton continues to run aground, Democrats are flocking to the campaign of Bernie Sanders, the self-described “socialist” US senator from Vermont who has been a fixture in that state for more than three decades. Not unlike the presidential campaign of Ron Paul, Sanders is drawing large, enthusiastic crowds, though to a very different message—one of increased state control of the US economy.

Obviously, when a person running a campaign based upon socialist principles is drawing attention and big crowds, we might ask just what does Sanders mean by “socialist,” and what would he do if he were elected president of the United States? To better answer those questions, I am taking a closer look at what we would call the “economics” of Bernie Sanders.

What Do We Mean by “Socialism”?

Before looking at Sanders’s platform, however, I believe it is important to note that when socialists speak of “victories” in the economy, they are not talking about actual results, but rather political achievements in the forms of laws being passed that mandate certain policies. Whether or not these policies actually achieve what socialists claim will be accomplished is another story altogether, but results themselves are irrelevant to socialists. Power is.

This should surprise no one because, after all, socialism is based upon political control of the economy. From each according to his ability, said Marx, to each according to his need.  True (or at least original) socialists believe that state agents via the “magic” of their authority should assess the takings from those of ability, and allocate all resources to where there is the greatest need. Political representatives, not surprisingly, determine what constitutes the greatest need—and what products of ability should be taken. The state would take ownership of all factors of production, and then wisely determine the needs and how production of goods would fulfil them.

Ludwig von Mises in 1920 in his short work, Socialism (three years later expanded into a book), exploded the socialist myth by pointing out that in a world of scarce resources, economies needed private ownership, prices, profits and losses to determine where resources should be directed. The early years of the “experiment” of the Soviet Union proved Mises correct, and socialists then sought to redefine what socialism actually meant.

In the USSR, and later in China and North Korea, the state took ownership of factors of production, but tried to create a parallel economy by using shadow prices and production functions via the mechanisms championed by Polish communist Oskar Lange, who admitted that Mises had pointed out serious flaws in the original plans of socialists. We also know how that “experiment” turned out, which is why there no longer is a USSR, China has abandoned much of the economics of Mao, and North Korea is a failed state where most people live in grinding poverty.

But people like Bernie Sanders, while maybe not rejecting the old socialism spiritually, nonetheless have embraced a “socialism” in which government takes ownership of large portions of what has been produced by private enterprise and transfers wealth from one group of people to another. A look at the Sanders website spells out his brand of “socialism” that he says is based upon what Nordic countries like Sweden, Denmark, and Norway have done, levying high taxes with governments using that funding for social programs like medical care and other public welfare initiatives.

Secondary Socialism

A number of people have pointed out that the Sanders “programme” is not socialism per se, but rather is something based upon socialising the results of private enterprise, or what one might call secondary socialism. The Bernie Sanders regime would take control of some of the produce of private enterprise, as opposed to taking outright control of factors of production, which would remain in private hands. If this reminds one of the fascism of the 1930s, that is because Sanders is promoting a version of the governing models of Germany under Adolph Hitler and Italy under Benito Mussolini.

Of the two, Sanders certainly is closer to Mussolini. Like Sanders, Mussolini called himself a socialist and was a leader in the Italian Socialist Party. Like Sanders, Mussolini decried “profiteers” and the wealthy, and spoke out against political corruption. Like Sanders, Mussolini spoke of a larger “national purpose” and sought to harness nationalism as a political force. Like Sanders, Mussolini sought to impose more and more controls on Italian businesses in order to direct production in a way to satisfy political purposes. Like Sanders, Mussolini built political power by appealing to Italian voters by saying that other Italians were well-off because they had gained their wealth on the backs of the poor.

Having similar economic proposals to Hitler and Mussolini does not make Sanders either of those two men, and it is important to emphasise that while Sanders regularly employs the powerful political tool of appealing to voter resentment of others, he is not advocating the kind of genocide that ultimately helped to characterise the fascism of Central Europe in the 1930s and 40s. Bernie Sanders is an economic nationalist, and economic nationalism was at the heart of European fascism, but we do not want to make unwarranted accusations against Sanders, either.

At the same time, I do not want to let Sanders totally off the hook. He promotes economic nationalism and has built his campaign upon resentment, the kind of which Henry Hazlitt wrote in 1966 in his famous, “Marxism in One Minute.” Hazlitt wrote:

The whole gospel of Karl Marx can be summed up in a single sentence: Hate the man who is better off than you are. Never under any circumstances admit that his success may be due to his own efforts, to the productive contribution he has made to the whole community. Always attribute his success to the exploitation, the cheating, the more or less open robbery of others. (Emphasis mine)

Fostering resentment breeds consequences that cannot really be called unexpected. As one moves through the website for the Sanders campaign, there is plenty of resentment for others. First, there is the ubiquitous “One-Percent” that is the main focus of the typical Sanders stump speech:

This campaign is sending a message to the billionaire class: “you can’t have it all.” You can’t get huge tax breaks while children in this country go hungry. You can’t continue sending our jobs to China while millions are looking for work. You can’t hide your profits in the Cayman Islands and other tax havens, while there are massive unmet needs on every corner of this nation. Your greed has got to end. You cannot take advantage of all the benefits of America, if you refuse to accept your responsibilities as Americans.

While I would agree wholeheartedly that the US economy is in serious trouble, it is not because of the “greed” of billionaires. It is because the US government, through the Federal Reserve System, has created what David Stockman has called the “casino economy” that has substituted trading of sovereign debt and monetary manipulation for a real economy with interest rates that reflect actual economic fundamentals. Like the Bush and Clinton administrations before it, the Obama administration has promoted political entrepreneurship and demonised market entrepreneurship.

Sanders’s List of Recycled Twentieth-Century “Solutions”

Americans are not jobless because some people are not paying “their fair share” of taxes; they are jobless because the US government insists on directing resources from higher-valued uses to lower-valued uses, as determined by consumer choice. They are jobless because Washington insists on remaking the economy in its own image. There is nothing in the entire Sanders campaign that would change any of the things that vex the US economy the most.

So, what does Sanders propose to “revitalise” the US economy? Here are some things listed on his website:

• Raise taxes on US corporations (ironically, corporate tax rates in the Nordic countries are substantially lower than current corporate taxes in the USA, something that has escaped Sanders’s notice);
• Raise the minimum wage to $15 an hour;
• Expand the reach of labour unions and vastly expand their membership;
• Make it illegal for US corporations to manufacture goods abroad, and then sell those goods in the USA;
• Impose new taxes on financial transactions;
• Spend at least a trillion dollars on building and repairing roads, bridges, and utilities;
• Create a “youth jobs programme” in which unemployed young people are given government-sponsored jobs (Sanders sees no connection between high minimum wages and youth unemployment);
• Enact “equity pay” that will “guarantee” that women are paid the same as men for comparable work;
• Break up banks and financial institutions;
• Enact a Canada-style single-payer healthcare system;
• Provide free tuition for all public colleges and universities;
• Expand Social Security benefits;
• Require businesses to provide 12 weeks of paid family and medical leave, at least 10 days of paid vacation a year, and seven days per year of paid guaranteed sick leave.

Notice that there is nothing in the Sanders platform that calls for “nationalisation” of the means of production, nor does he propose to do away with the price system. In other words, Sanders’s vision of socialism is not what Mao or Trotsky or Lenin proposed, yet there is not one thing in the entire platform that would reverse the dangerous economic trends of the past decade.

Instead, Sanders proposes to direct huge amounts of resources in the direction of constructing something akin to a European welfare state. To put it another way, Sanders wishes to “turn back the clock” to create or promote social and economic structures that already have been undermined by the modern “sharing” economy.

If one reads Sanders’s platform from another perspective, it would be the New Deal. Indeed, there is nothing Sanders has written or said from the stump that would not be reminiscent of a New Deal rally (with the possible exception in appealing to black Americans, which was not part of the Democratic Party agenda in the 1930s, as well as Sanders’s appeal to furthering the Sexual Revolution). Bernie Sanders pushes an economic agenda that is frozen in time.

The problem, economically speaking, is that Bernie Sanders proposes nothing that actually would enable entrepreneurs to help bring about a true economic recovery. In Sanders’s world, entrepreneurs are parasites and employers are oppressors who seek to harm their employees, and wealth is defined by how much governments have in their treasuries.

If I could put the economics of Bernie Sanders into a nutshell, it would be this: Burden private enterprise with one directive after another, and then demonise it when it ultimately falls down under the awful weight of taxes, higher costs, and mandates. While many people believe that instituting the Sanders economic agenda would help turn the USA into another Sweden or Denmark, the more likely outcome would be turning this country into another Venezuela.

---

Bill Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland. His Ph.D. in economics is from Auburn University, and he serves as an associate scholar with the Mises Institute. He has published numerous articles and papers on economics and political economy, including articles in The Independent Review, Reason Magazine, The Free Market, The Freeman,Public Choice, The American Journal of Economics and Sociology,Quarterly Journal of Austrian Economics, and others.
This post first appeared at the Mises Daily.

RELATED POSTS:

• Scandinavia not such a socialist paradise – KIWIBLOG
• How Laissez-Faire Made Sweden Rich – Johan Noberg, LIBERTARIANISM.ORG
• Johan Norberg - Swedish Myths and Realities – YOUTUBE
• Venezuela proves Hayek right again – NOT PC

Off the ‘Spirit Level’ [update 4]

The authors of the British book The Spirit Level have a political agenda, and they’ve got it talked about everywhere. Even here. The NZ Labour MPs’ blog Red Alert for example is so excited it even has a ‘Spirit Level’ “tag”, and breathless comments from the likes of Grant Robertson that “These people’s work can not be dismissed.” And Colin James, the commentator on the tired and the bleeding obvious, wonders if the 300-page tome might not become  “a sort of guidebook for the next Labour ministry,” should there be one.

So what’s their work, and why are Grant Robertson and his comrades so excited about it? It’s a “revolutionary” thesis overturning all previous research: that societies with more “equal” incomes do better than those that don’t.

So how did they do what no other researchers before them have managed to do? Simple, They fudged the figures.

Here, for example, is a graph that is central to their thesis, purporting to show how much better off our life expectancy would be if we all copied “the workers’ paradises of Scandinavia and the egalitarian nirvana of Japan.” See how the culturally egalitarian Japan and Sweden skew the left side up, and the culturally meritorian USA skews it down?

And here it is again, this time with the many elephants in the room they neglected to include because they inconveniently contradict their thesis, charted using figures from that bastion of inequality, the UN. See how the addition of Hong Kong alters the right-hand side, and the additions of the likes of South Korea and the Czech Republic give a more “realistic” level to the left-hand end.

Adding in the countries that contradict their thesis shows that there really is no significant trend at all (maybe one month, or two?), which means their much-hyped thesis is basically bosh.  [Further clarification on the graphs below.]

As the author of The Spirit Level Delusion, Christopher Snowdon, explains at Spiked, (from whom I stole those graphs) this sort of statistical legerdemain exposed here cannot be unintentional. Which means, to put it bluntly, that the authors have lied—and if you have to lie to make your point, that probably means you haven’t got one. Nonetheless, it’s a lie perfectly calculated to get the chattering classes talking; so after tearing apart their “research,” Snowdon draws the only conclusion about their thesis and its widespread acceptance that you could:

The only real difference between ‘less equal’ and ‘more equal’ countries is the size of the government and the amount it takes in tax, rising from less than 15 per cent of gross domestic product in Singapore to almost 50 per cent in Denmark. The fact that Singapore outperforms Denmark under almost every measure of what makes a country ‘do better’ only serves to underline the folly of The Spirit Level and, by association, the futility of its political agenda.
    That this agenda takes the form of zero-growth economics and eco-authoritarianism perhaps explains why journalists at the New Statesman and the Guardian have been so willing to suspend disbelief when confronted with such an improbable explanation for the problems of all mankind. It seems not to have struck them as odd that two left-wing epidemiologists were able suddenly to unearth a ‘theory of everything’ which had eluded the world’s finest minds for generations.
    To The Spirit Level’s legion of admirers, this uncanny turn of events is only proof of Wilkinson and Pickett’s unique genius. A more prosaic explanation is that the grand unifying theory had not been unearthed because it was never there.

As Ayn Rand used to say,

If there were such a thing as a passion for equality (not equality de jure, but de facto), it would be obvious to its exponents that there are only two ways to achieve it: either by raising all men to the mountaintop—or by razing the mountains.

And naturally, the exponents of forced equality always end up advocating the latter. That the talk about this book and its recommendations at the Red Alert blog usually ends with a recommendation to soak the rich is proof once again that this thesis is still fundamentally correct. But don’t expect them to change that one big idea in their policy manual—because it’s the only “big idea” they’ve actually got.

UPDATE 1: Phil Sage has some complementary comments over at the No Minister blog, concluding,

Redistribution … is useful for solving short term problems but ultimately does not make a community more cohesive or happier; it just drags back the wealth creators, to the detriment of all.

Phil links to two excellent reports on the central thesis of The Spirit Level, which I hope he won’t mind me linking here; first, from the UK Taxpayers’ Alliance:

Before policymakers rush to enforce the income equality that the authors suggest is so vital to improve public health and general wellbeing, it is important that we properly scrutinise its claims. 
    The new report published today by the TaxPayers' Alliance does just that.  The Spirit Illusion looks at whether the most important correlations established in the book can be replicated.
The findings are stark.  On almost no measure does the central claim of the Spirit Level, that income inequality decreases life expectancy, stand up to scrutiny…
    [The report’s] main point is that the most important statistical correlation between countries that the authors claim to have established – the connection they point to between life expectancy and income inequality in different industrialised nations – is simply wrong…

I recommend the report. It’s free. And the UK Policy Exchange has produced its own report on the phoney tome, Beware False Prophets, in which “Wilkinson and Pickett’s empirical claims are critically re-examined using (a) their own data on 23 countries, (b) more up-to-date statistics on a larger sample of 44 countries, and (c) data on the US states. Very few of their empirical claims survive intact.”  The hardback costs you £10 + £3p&p—but you can download the PDF free.

UPDATE 2: If you think those “dots” have moved in the two charts above, you’re right.  Chris Snowdon clarifies in the comments:

The two graphs are from exactly the same UN source, but are from different years. The first is from the 2004 UN Human Development Report, the second is from the 2006 report.
The reason I mention this is that, if you own a copy of The Spirit Level, take a look at references 2 and 6. Reference 2 is the 2006 report and is for their graph showing no relationship between life expectancy and GDP. Reference 6 is the 2004 report, and that's used to show there IS a relationship between life expectancy and inequality.
    Why use two different data sets? We can only speculate, but I would speculate that its because, even if you exclude places like the Czech Republic, the 2004 data fits their hypothesis better than the 2006. This, from two researchers who insist they took their data "warts and all."

UPDATE 3: Dinther sums it all up perfectly. At the end of the day, even if the research were true …

I’d rather live a shorter life in freedom … than a longer and no doubt boring life in captivity.

UPDATE 4:  Spirit Level authors Wilkinson and Pickett's responded to the Spirit Level Delusion author’s 20 Questions to them. Hong Kong was excluded because, apparently, it’s not “an older, rich, developed, market economy.” Presumably because it’s a young, poor, undeveloped, communist state like Cuba?  I guess this gives you a taste of Wilkinson & Picket’s acumen.
Snowdon’s response to them is here. It’s good.
Some of the graphs from The Spirit Level Delusion are here. And Snowdon’s Spirit Level Delusion blog is here.

Sweden, Coming Soon to a Country Near You

[Guest Post by Jeff Perren.]

Anyone interested in realistic projections of where the U.S. is heading in education need only look to Europe, in this case Sweden. The government there is proposing to outlaw homeschooling on the grounds that:

"…the education in school should be comprehensive and objective and thereby designed so that all pupils can participate, regardless of what religious or philosophical reasons the pupil or his or her care-takers may have."

As a result, they argue (in a giant non-sequitur): "[T]here is no need for the law to offer the possibility of homeschooling because of religious or philosophical reasons in the family."

It would be hard to find clearer empirical evidence that the socialist State simply has to ceaselessly indoctrinate individuals as young as possible in order to continue to survive, But pass over that for now. Observe instead the subtle, unstated premise: your convictions are not objective, but those of the State educators necessarily are. No argument beyond pointing it out should be needed to show how false and pernicious that idea is. But that view is particularly ironic given how opposed all Dewey's descendants are, in principle, to objectivity. (It's contrary to the most basic principle of Pragmatism, half of the twin offsprings of the father of Progressive education.)

The various States have long forced American parents to jump through hoops to remove their children from the clutches of the Progressive Comprachicos. Yet, homeschooling in America has still been on the rise (and hence under attack) for years. If current social trends continue here, expect something like this legislation to be introduced at the Federal level within the next 10 years, sooner if ObamaCare is enacted.

[From the January 2, 2010 edition of Shaving Leviathan.]

Children's wellbeing: New UN report

Not everything that's important can be measured; and not everything that's measurable is important. And of course, not everything the UN does is worth a damn. (Or indeed, is anything the UN does worth a damn? Discuss that one in the comments section if you like.)

Those opening remarks are made in the context of a UN report on 'children's well-being' released overnight and splashed all over this morning's news. It begins with this highly questionable assertion: "The true measure of a nation's standing is how well it attends to its children." You can discuss that one in the comments section too, if you like.

Already the usual suspects have emerged to make hay from the survey. Director of the Public Health Association Gay Keating, for instance (the text is from a literal transcription of her radio interview this morning):

We really devalue our chooldren... We've forgotten that chooldren are important.. We really aren't looking after our kuds... Too many of our chooldren don't get to adulthood. We kool them off!

What's the "we," white man? I didn't kill those kids. Did you?

But what about the report? There are certainly elements here that are important:

• "Only 82 per cent of Kiwi infants are now immunised against polio by the age of 2, compared with the OECD average of 94 per cent."
• NZ is at "absolute bottom on the proportion of young people who were still in fulltime or part-time education aged 15 to 19 in 2003 - only 67 per cent against 82.1 per cent in Australia and an OECD average of 82.5. Far more young people continued in education in this age group in central and northern Europe - 89 per cent in Germany, 90 in the Czech Republic and 94 per cent in top-ranking Belgium."
• "New Zealand's teenage birth rate has now passed Britain's, moving us up from third to second-highest among developed countries."

But not everything that's important can be measured, so in all such surveys, proxies are used as substitutes for the real thing. Take for example what the report titles "Relationships." NZ children are badly off in this respect, says the report. Why?

Asked "how often do your parents eat the main meal with you around a table?", only 64.4 per cent of Kiwi 15-year-olds answered "several times a week", compared with an OECD average of 79.4 per cent. Only Finnish youngsters eat with their parents less often.

Not everything that's measurable is important. This is not important.

And how about this?

New Zealand scores even worse - worst in the developed world - on the number of children under 19 killed in accidents and injuries, including violence, murder and suicide.

Now that doesn't sound good, does it. Are you sure? Without the report in front of me it's not possible to see how the accidents/injuries/violence/murder/suicide ratio is made up, but I suspect many of these could be considered 'adventure' deaths -- part of the 'cost' associated with living in an outdoors-loving country. New Zealand children are more active than, say, the English; probably spend more time having adventures outdoors than, say, the Dutch or the Beligians; and despite the best efforts of many government agencies, NZ children aren't yet completely wrapped up in a nannying, cotton-wool culture as they are in, say, England, or the States, where warnings and worry about every damn thing abound.

And what the survey wouldn't measure, for example, is the number of children turning themselves braindead by sitting inside fiddling with their Playstation -- which is bound to be higher in places like, say, the States. Or places where you can't go outside all winter, like Canada, or Scandinavia.

And how accurate is the report anyway? Says welfare researcher Lindsay Mitchell, not very.

First, some of the figures are hopelessly out of date, and second, some are quite dubious.

So if Mitchell can be believed -- and I believe her -- it's not very accurate at all. As an example, Mitchell takes issue with this assertion:

On average, 95 per cent of the children in developed countries live in homes where at least one parent is in paid work. New Zealand fell slightly below the average when these figures were gathered in 2000, with only 93 per cent of children living with a parent in paid work. Only six countries, including Australia and Britain, scored lower.

Get that? "Only 93 per cent of [New Zealand] children living with a parent in paid work." But these figures were produced using estimates, notes Mitchell, and using census figures -- and UN reports calling for more government meddling are just the sort of thing census advocates advocate such figures should be used for -- she suggests that the figure could just as easily be 79 percent. Or even 71 percent.

And does this report really call for more government meddling then? You don't think the conclusion is a coincidence?

The Netherlands topped the report issued by UNICEF, followed by other European countries with strong social welfare systems - Sweden, Denmark and Finland.

So despite some interesting reading, perhaps this report should be filed with the failed report on the cost of building materials released yesterday by Councillor Richard Northey -- which neglected to take into account the different exchange rates for different currencies [Duh!] -- and with most stuff produced by the NZ Qualifications Authority -- whose latest confession is that they might have neglected to mark some of last years exams.

Just file them all under "Not Achieved," I say.

UPDATE: Everyone loves bad news. Looks like the glass is half-full in British and American newspapers as well. See:
Is Britain the worst place to grow up? - The Scotsman
British kids bottom of UN welfare league table - Daily Record (Scotland)
British children unhappiest in the Western world - The Times
UNICEF: US, British children worst off - Miami Herald (AP)

LINKS: A great place for kids. Oh really? -- NZ Herald
Dubious UNICEF statistics - Lindsay Mitchell
Annan UN disgrace - Not PC (Dec, 2006)
What's with the 'we'? - Not PC
Excusing the bash - Not PC (July, 2006)
Bad maths put house contrast way out - NZ Herald
Non-marking of NCEA papers seen as one-off incident by NZQA - Radio NZ

RELATED: New Zealand, Politics-NZ, Health, Education, Building, Housing

Nightclubbing, we're nightclubbing...

Buying beer in a Swedish nightclub is amongst the most expensive purchases on the planet, whereas a Newcastle Brown at a nightclub in Newcastle is dirt cheap. However, Swedish nightclubs do have other significant advantages...

Compare nightclubs in Sweden here, and Newcastle here. [Powerpoint needed.] Where would you rather spend the night, and with whom?

Related: Beer & Elsewhere, Humour